Exemption clauses - in the Netherlands
Exclusion of liability - under Dutch contract law
An exemption clause is an agreement in a contract that purports to exclude or limit liability for the occurrence of certain events. In principle, parties are free to exclude or limit their potential liability, within the limits of the law.
Example exclusion clause under Dutch law
Notwithstanding any other provision of this Agreement, neither party shall have any liability to the other for, and neither party shall be entitled to recover from the other, any consequential, special, multiple or exemplary damages as a result of a breach of this Agreement.
Example limitation clause
The Consultant’s liability to the Client for any breaches of this Agreement or for any other harm suffered by the Client shall at all times be limited to the amount in fees already paid to the Client pursuant to this Agreement. This does not apply to any damages resulting from intent or gross negligence (opzet of bewuste roekeloosheid) on the part of the Consultant.
Types of exemption clauses under Dutch law
- Exclusion clause: a total exclusion of liability
- Limitation clause: a partial exclusion of liability
- Indemnity clause: one party agrees to indemnify the losses caused by that party, hold harmless, and/or defend the other party
Enforceability and moderation under Dutch law
Exemption clauses can be effective in protecting a party to a contract, however not all exemption clauses will be effective at law. Under Dutch law, the courts can test exemption clauses against the standards of reasonableness and fairness. In the event that reliance on an exemption clause would lead to an outcome which is unacceptable according to the standards of reasonableness and fairness, the court can refuse to enforce the clause. When this will be the case depends largely on the facts and circumstances of the individual situation, however the classic example of an unenforceable exemption clause is an attempt to exclude or limit liability for loss which is caused intentionally or in a grossly negligent way.
Exemption clauses may also be vulnerable where they are not individually negotiated, but instead form part of general terms and conditions, as such clauses may be deemed to be unreasonably onerous.
