Non-imputable failure to perform under Dutch law
Force majeure (overmacht) refers to a situation where the performance of a contractual obligation has become impossible for a party due to an event beyond their control. Force majeure is sometimes used synonymously with "act of God", common examples include earthquakes, floods, hurricanes or tsunamis.
Contracts commonly include so-called force majeure clauses. A Dutch contract attorney can advise you on force majeure under Dutch law and the benefits of including a more specific force majeure clause.
Force majeure clauses can be appropriate in contracts for the sale of goods, contracts for the provision of services, distribution agreements (distributieovereenkomsten), agency contracts, and similar arrangements.
Acts of God under Dutch law, non-attributable non-performance
Under Dutch law, the general rule is that a contracting party is liable for all damages resulting from their breach of contract (tekortkoming) unless the breach cannot be attributed to them (art. 6:74 Dutch Civil Code). A successful force majeure defence means that the debtor is not in default, removing the need for a notice of default (ingebrekestelling). According to Article 6:75 of the Dutch Civil Code, a breach cannot be attributed if the contracting party is not to blame for the breach according to law, legal act or generally accepted principles (common opinion).
It follows from Article 6:75 of the Dutch Civil Code that non-performance (tekortkoming in de nakoming) cannot be attributed to the debtor if he is a) not at fault and b) if the non-performance does not fall within his sphere of risk.
When is the party to blame? The first question is whether the debtor can be blamed for the non-performance. He cannot be blamed if he could not have reasonably prevented the event that led to non-performance and could not have avoided its consequences.
The next question is whether the non-performance can be attributed to him, i.e. whether he was bearing the risk for it.
Grounds for attribution of non-performance under Dutch law
Article 6:75 of the Dutch Civil Code lays down three grounds on which attribution can be based.
First, a specific statutory provision can create liability (e.g. liability for third persons or things).
Second, a legal act, e.g. contractual agreements, can amount to attribution. Parties can stipulate in their contract who will bear the consequences of the failure to perform (tekortkoming). Liability can be extended by contract by guaranteeing performance (nakoming) or it can be limited or even entirely excluded by a limitation-of-liability clause (exoneratiebeding).
Third, there are circumstances in which the debtor is held responsible on account of common opinion (verkeersopvattingen), such as in the case of financial incapacity, incompetency or inexperience.
Force majeure (overmacht) will only apply if liability for the breach cannot be attributed to the contracting party.
What purposes do contractual warranties serve in Dutch law?
Under Dutch law, contractual warranties serve two distinct purposes: they give the buyer access to information held by the seller, and they shift the contractual risk of defects or inaccuracies from the buyer to the seller.
These two functions are worth separating. The information function means that the seller, by giving warranties, discloses facts about the subject matter of the contract. The risk-allocation function means that the seller accepts liability if those facts prove incorrect, regardless of fault.
Dutch legal doctrine notes that both purposes carry less weight under Dutch law than they do in Anglo-American legal systems. Dutch law already imposes a statutory duty of disclosure on the seller. In addition, Article 7:17 of the Dutch Civil Code requires that goods conform to what a buyer may reasonably expect. Because these rules exist by operation of law, a Dutch buyer already enjoys a degree of protection that a common-law buyer must negotiate contractually.
In practice, however, parties to commercial transactions in the Netherlands routinely include detailed warranty provisions. They do so to create certainty about the exact scope of the seller's obligations and to avoid disputes over what the statutory conformity standard requires in a specific context.
Effect of force majeure under Dutch law
If one party is hindered from performance due to force majeure, the other party is nevertheless entitled to set aside the contract (ontbinding) or to suspend its own performance (opschorting). The other party is however not entitled to demand specific performance (nakoming) or damages unless the defaulting party would enjoy an advantage from their breach that they would not have enjoyed if the contract had been properly performed.
Force majeure clause under Dutch law
Under some common-law jurisdictions, parties to a contract who wish to have force majeure relief must spell out the terms in the contract. Under Dutch law the statutory force majeure provisions apply automatically to all contracts. Parties can nevertheless include an express provision on force majeure if they wish to override or deviate from the statutory provisions. However, liability for non-performance attributable to a party's own fault or gross negligence can never be excluded.
Is a limitation-of-liability clause in standard terms enforceable under Dutch law?
A limitation-of-liability clause in standard terms is enforceable under Dutch law, provided it is not unreasonably onerous, is sufficiently transparent, and does not come as a genuine surprise to the other party.
Dutch law recognises the concept of the "surprising clause" (verrassend beding). A clause is surprising when, given the circumstances, it is unusual and the other party could not reasonably have anticipated it. This principle has a long history in Dutch case law and reflects a similar rule in German law and in the UNIDROIT Principles of International Commercial Contracts.
However, the threshold for surprise is considerably higher between professional parties. A business that knowingly accepts standard terms without reading them takes on the risk that those terms contain provisions it dislikes. Dutch courts will not readily set aside a clause merely because the accepting party did not bother to read it. The protection against surprising clauses applies only when the clause was genuinely unforeseeable, not merely inconvenient.
Transparency is a separate requirement. The less clearly a limitation clause is worded, the more readily a court may find it unacceptable. Dutch case law, in line with rulings of the Court of Justice of the European Union, confirms that a lack of clarity and intelligibility in a clause is itself a factor weighing in favour of invalidity. The other party must be able to assess the contractual risks it is taking on.
How do contractual warranty periods and complaint obligations work in the Netherlands?
In commercial contracts governed by Dutch law, parties frequently agree on a contractual warranty period and a corresponding obligation to complain promptly about any breach. Both elements interact with Article 7:23 of the Dutch Civil Code, which sets the statutory framework for complaints by a buyer.
Article 7:23 of the Dutch Civil Code requires a buyer to notify the seller of a non-conformity within a reasonable time of discovering it. Parties to commercial contracts often replace or supplement this rule with a bespoke contractual regime. When the parties exclude the purchase title of the Dutch Civil Code altogether, it is good practice to state expressly that the agreed periods for submitting warranty claims deviate from Article 7:23 of the Dutch Civil Code, rather than leaving this implicit.
Equally important is clarity about the consequence of late notification. Dutch courts do not automatically treat a failure to comply with a contractual complaint deadline as a forfeiture of all rights. Case law confirms that if the parties intend late notification to result in the complete loss of the buyer's claim, they must say so explicitly. Where the contract is silent, a court may instead reduce the seller's liability to the extent that the late complaint caused the seller additional loss, treating the delay as contributory negligence under Article 6:101 of the Dutch Civil Code.
In practice, warranty periods in acquisition agreements typically run between one and three years. Case law generally treats the warranty period as also defining the outer limit for complaint, so that a complaint made within the warranty period is timely. There is, however, a line of decisions holding that even within an agreed warranty period the buyer must still complain without undue delay, on pain of losing rights. Parties who want certainty on this point should address it expressly in the contract.
Examples of a force majeure clause in a contract under Dutch law
Below are three model clauses that illustrate different approaches to drafting force majeure provisions in contracts governed by Dutch law.
Example 1: force majeure clause in a contract subject to Dutch law
Force majeure
[-].1 In this Agreement the term force majeure is understood to mean: prevention of fulfilment of the Agreement as a result of fire, explosion, embargo, uprising, riot, war (whether or not declared), natural disasters (including storm) and flood.
[-].2 In the event of force majeure, performance of the Agreement shall be suspended.
[-].3 In case of force majeure the Parties shall inform one another as soon as possible in writing of the nature of the force majeure, the date on which the force majeure situation starts or started and, if possible, the expected duration.
[-].4 If the force majeure has lasted longer than thirty (30) calendar days or may reasonably be expected to last longer than thirty (30) calendar days, either Party shall be entitled to set aside the Agreement by written notice with immediate effect and without recourse to the courts. In this situation, the Party affected by the force majeure shall be obliged to effect compensation to the extent that he has derived benefit from the force majeure which he would not have enjoyed in the normal performance of the Agreement.
Example 2: force majeure clause in a contract subject to Dutch law
1. Under this contract "force majeure" means: any circumstance which is independent of the will of the parties, as a result of which performance of the contract cannot reasonably be required of [Party A], whether temporarily or permanently. Force majeure shall in any event include: (civil) war and the threat of (civil) war, natural disasters, strikes, excessive absenteeism of [Party A's] employees, transport problems, fire, lack of raw materials, government measures by any government whether in the Netherlands or elsewhere, in any event including import and export prohibitions, quota schemes, and breakdowns at [Party A] or at suppliers of [Party A], as well as non-performance or force majeure on the part of suppliers as a result of which [Party A] is not or no longer able to meet its obligations to the Customer.
2. In the event of force majeure [Party A] is entitled to terminate the contract, or suspend performance of the contract until the circumstance that causes the force majeure has ceased to exist, and the Customer shall not be entitled to any compensation or damages for any such loss or damage.
3. Party A is entitled to require payment for any acts carried out in connection with execution of the contract prior to the force majeure having occurred.
Example 3: force majeure clause in a contract subject to Dutch law
Each party will be excused from performance (other than the performance of payment obligations) for any period and to the extent that it is prevented from performing its obligations, in whole or in part, as a result of delays caused by the other party or an act of God, war or civil disturbance and such non-performance will be neither a default hereunder nor a basis for termination hereof.