What is assignment of a claim under the laws of the Netherlands?
Assignment of a claim under Dutch law (cessie) is the transfer of a chose in action from one person (the assignor) to another (the assignee). A chose in action is a property right which can only be enforced by legal action, not by taking possession. Examples include a debt, a right to compensation, or a claim.
If person C owes a debt to person A, person A may assign the chose in action (the legal right to receive the money) to person B. Person C will then be required to pay the debt to person B rather than person A. Once the debt has been validly assigned, B will be able to enforce payment of the debt and only payment to B will extinguish the debt.
How can a debt be assigned under Dutch law?
Under Dutch law, the general rule is that a chose in action (such as a claim) can be assigned unless assignment is precluded by law or the nature of the right (art 3:83(1) of the Dutch Civil Code).
Contracting parties are free to exclude assignment in their overeenkomst (agreement) under art 3:83(2) of the Dutch Civil Code. For example, a contracting party to a distribution agreement may wish to prevent the distributor from assigning the right to distribute to a third party:
Neither Party may assign or transfer to a third party any right under this Agreement without the prior written consent of the other Party. This restriction is to be effective according to article 3:83(2) of the Dutch Civil Code.
How do you transfer title to a claim?
Assignment also requires "delivery" (levering) of the chose in action. There are two possible ways to "deliver" a contractual claim.
Article 3:94(1) of the Dutch Civil Code provides that a chose in action is delivered by means of a deed and subsequent notice to the debtor (or person against whom the right can be exercised). Either the assignor or the assignee can give notice. In this situation, the assignment is not complete until the debtor has notice.
A chose in action can also be assigned through a Notarial Deed or deed that is registered with the Tax and Customs Administration (art 3:94(2) of the Dutch Civil Code). In these cases, there is no need to give notice to the debtor (or person against whom the right can be exercised) for the assignment to be complete. However, the chose cannot be enforced against this person until they have notice from the assignor or assignee. One rationale for this provision is that if the assignor is declared bankrupt before the notice is given, but after the execution or registration of the deed, the assignment will already be complete and the chose in action in question will not be part of the bankrupt estate.
Should you assign ancillary rights under Dutch law?
After assignment, the assignee acquires all rights that are ancillary to the claim (article 6:142 of the Dutch Civil Code).
Ancillary rights could include:
- rights of pledge
- mortgage, or
- the right to enforce judgments relating to the claim.
Ancillary rights may also include a right to contractual interest or to penalty sums under the contract.
The assignment of a claim does not affect the debtor's defences (art 6:145 of the Dutch Civil Code). For example, if the original contract between the assignor and the debtor contained a force majeure clause and an event occurs which can be classified as force majeure, the clause may be able to exempt the debtor as against the assignee.
How do you transfer a contract under Dutch law?
Article 6:159 of the Dutch Civil Code provides that a party to an overeenkomst can, with consent of the other contracting party, transfer its contractual position to a third party through a deed concluded with that third party. All the rights and obligations are transferred to the third party except as otherwise provided in relation to accessory rights or rights that have already become exigible. This means that, in principle, the new contracting party will have exactly the same rights and obligations as the original contracting party. For example, they will have the same performance obligations and the same rights to termination and damages for breach of contract by the other party.
In most other legal systems assignment only concerns the transfer of rights and not obligations. An assignment can therefore not transfer the entirety of a contractual position including both rights and obligations. In some common-law jurisdictions, a transfer of obligations is possible only by "novation". This involves the termination of the original contract between A and B and the creation of a new contract between A and C. In a novation, the rights and obligations under the new contract are not necessarily identical to those in the original contract.
Which contracts can be transferred under Dutch law?
In principle all contracts can be transferred by the procedure detailed in article 6:159 of the Dutch Civil Code. However, as is the case with assignment, it is possible to contractually stipulate that transfers will not be permitted.
The contracts which cannot be transferred under Dutch law are:
- contracts that contain rights and obligations that have already been performed and that are of primary importance for the parties
- agreements containing rights and obligations that are so connected to the parties that by their nature cannot be transferred
- agreements that specifically exclude the right to transfer
- agreements that contain rights and obligations that are insufficiently certain.
What are the formalities to transfer a contract under Dutch law?
In order to transfer a contract under Dutch law, there needs to be a deed signed between the original contracting party and the party who takes over the contract. There is no requirement of form for the consent of the other contracting party, that is, the party who remains party to the contract. The consent may be given orally, in writing or may even be implied in certain circumstances.
How does good faith differ between Dutch law and English law in contract negotiations?
Dutch law imposes duties of reasonableness and good faith from the moment negotiations begin, under Article 6:2 of the Dutch Civil Code. English law recognises no equivalent general duty, and this difference has direct consequences for international contracts.
In Dutch law, the pre-contractual phase is governed by the standards of reasonableness and good faith. This approach is broadly shared across civil-law systems, including the French and German legal traditions. English law, however, has historically rejected any overriding principle of good faith in contract formation. English courts have developed specific doctrines to address particular instances of unfairness, but they do so case by case rather than through a general rule.
The English position on pre-contractual negotiations is especially strict. Courts have held that negotiating parties are each entitled to pursue their own interests, provided they avoid misrepresentation. A duty to negotiate in good faith is considered incompatible with the adversarial nature of commercial bargaining. This position has been maintained consistently in English case law, notwithstanding academic criticism.
For parties assigning claims or transferring contracts under Dutch law, this distinction matters. If a dispute arises about the circumstances surrounding the assignment, Dutch courts will assess the conduct of both parties against the standard of reasonableness and good faith. An assignor who withheld material information during negotiations may face liability under Dutch law that would not arise under English law. Consulting a Dutch lawyer is advisable when structuring an assignment in a cross-border context where the applicable law is contested.
How do Dutch courts interpret contractual terms compared to English courts?
Dutch courts apply a contextual interpretation standard that takes into account the parties' intentions and their conduct. English courts, by contrast, adopt a strictly objective approach focused on the text and its factual background, excluding pre-contractual negotiations as evidence.
Under Dutch law, the meaning of a contractual clause is determined by what the parties could reasonably have expected from each other, given all the circumstances. The text of the contract is important, but it does not automatically prevail over evidence of what the parties actually intended. This approach gives courts some flexibility to fill gaps and resolve ambiguity by reference to the broader contractual relationship.
English law proceeds differently. The court asks what a reasonable person, with knowledge of the relevant background, would have understood the words to mean. Pre-contractual negotiations are excluded from that background under the so-called exclusionary rule. The rationale is that only the final signed document records the parties' agreement, and admitting earlier drafts or exchanges would undermine certainty. Parties may in limited cases invoke rectification or estoppel by convention to escape a literal reading, but these are narrow exceptions.
This contrast becomes particularly relevant when an international contract assigns rights or transfers obligations under Dutch law but uses English-language terms. A Dutch court will interpret those terms in context, considering the reasonable expectations of the parties at the time of contracting. The fact that a term originates in Anglo-American contract practice may inform that contextual analysis, but it does not automatically import English interpretive rules into the Dutch proceedings.