What Does Article 7:764 of the Dutch Civil Code Say?
Article 7:764 of the Dutch Civil Code gives the principal under a contract for work the right to terminate the contract at any time, in whole or in part, without needing a reason. The price of that freedom is financial: the principal must pay the price for the whole work, less what the contractor saves because of the termination, and receives the work completed so far.
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What Is the Text of Article 7:764?
English translation (unofficial, by the Dutch Law Institute):
1 The principal is entitled at any time to terminate the contract in whole or in part.
2 In the event of such termination, the principal must pay the price applicable to the entire work, reduced by the savings resulting for the contractor from the termination, against delivery by the contractor of the work already completed. If the price was made dependent on the costs actually to be incurred by the contractor, the price owed by the principal is calculated on the basis of the costs incurred, the work performed and the profit the contractor would have made on the entire work.
Dutch text (Burgerlijk Wetboek Book 7, article 764):
1 De opdrachtgever is te allen tijde bevoegd de overeenkomst geheel of gedeeltelijk op te zeggen.
2 In geval van zulke opzegging zal hij de voor het gehele werk geldende prijs moeten betalen, verminderd met de besparingen die voor de aannemer uit de opzegging voortvloeien, tegen aflevering door de aannemer van het reeds voltooide werk. Indien de prijs afhankelijk was gesteld van de werkelijk door de aannemer te maken kosten, wordt de door de opdrachtgever verschuldigde prijs berekend op grondslag van de gemaakte kosten, de verrichte arbeid en de winst die de aannemer over het gehele werk zou hebben gemaakt.
Dutch text as in force from 1 July 2026, taken from wetten.overheid.nl, the official source of Dutch legislation. The English translation is not official; in case of doubt the Dutch text prevails.
What Does Article 7:764 Mean?
Under a contract for work (aanneming van werk), the principal (opdrachtgever) may end the contract at any moment, wholly or partly (paragraph 1). No ground is required and the contractor (aannemer) does not have to have failed in any way. The right belongs to the principal only; the article gives the contractor no corresponding right.
The rule reflects the idea that a principal should not be forced to have a work completed that it no longer wants. The contractor is protected instead by the payment rule in paragraph 2.
What Does the Principal Have to Pay after Terminating?
The starting point is the full price of the entire work. From that, the savings that the termination produces for the contractor are deducted, such as materials that no longer need to be bought or labour that no longer needs to be deployed. In exchange, the contractor delivers the part of the work already completed (paragraph 2, first sentence).
In effect, the contractor keeps its expected result on the whole contract. What the savings amount to is a question of fact, and in practice it is often the main point of dispute.
If the price depended on the costs the contractor would actually incur, the calculation is different: the principal pays the costs incurred, the work performed and the profit the contractor would have made on the whole work (paragraph 2, second sentence).
How Is This Different from Dissolution for Breach?
Termination under Article 7:764 does not depend on any failure by the contractor, and that is why the principal pays for the contractor's lost profit. Where the contractor has failed to perform, the principal may instead have a right to dissolve the contract for breach under Article 6:265 of the Dutch Civil Code, which follows different rules and does not carry the obligation to pay the full price less savings. Which route is used matters a great deal for the amount the principal owes, so the basis for ending the contract should be chosen and stated deliberately.
What Should Parties Consider in Practice?
Because the statute sets a default rule, the contract itself is the first place to look: it may contain its own arrangement for early termination. Where it does not, a principal who wants to stop a project should record the termination clearly, state whether it is total or partial, and ask the contractor to specify its savings. A contractor faced with termination should document the work completed and the costs it avoids, since those figures determine the final account.
For the wider framework, see the guide to contracts for work under Dutch law.
Can the Principal Terminate Only Part of the Work?
Yes. Paragraph 1 allows termination in whole or in part. For a partial termination, the same logic applies to the part that is cancelled: the price for that part remains owed, less the savings the contractor makes by not performing it. The rest of the contract continues on its terms.
How Is the Amount Calculated? An Example
A fixed-price contract to build an extension is agreed at EUR 100,000. Halfway through, the principal terminates. The contractor shows that it no longer has to spend EUR 45,000 on materials and labour for the remaining work. The principal then owes EUR 100,000 minus EUR 45,000, that is EUR 55,000, in total for the contract, and receives the half-finished extension. Payments already made count towards that total. The figures are illustrative; in a real case the size of the savings is usually the point in dispute.
Under a cost-based contract the calculation starts from the other end: the costs actually incurred, the work performed, plus the profit the contractor would have made on the whole work.
Which Provisions Are Related to Article 7:764?
- Article 7:750: what a contract for work is, namely an undertaking by a contractor, outside employment, to create and deliver a work of a physical nature for a price.
- Article 7:758: acceptance and delivery of the work, the passing of risk and liability for defects after delivery.
- Article 7:761: the limitation periods for claims about defects in the delivered work.
- Article 6:265 of the Dutch Civil Code: dissolution of a contract for a failure in performance, the route for a principal whose contractor is in breach.
Related Provisions and Guides
Related articles in this library:
- Article 7:758 of the Dutch Civil Code: Acceptance and delivery of works
- Article 6:265 of the Dutch Civil Code: Rescission for non-performance
- Article 6:74 of the Dutch Civil Code: Liability for non-performance
Further reading on dutch-law.com:
All articles: the Dutch Civil Code in English.