Article 6:231 of the Dutch Civil Code defines general terms and conditions as one or more stipulations drafted for inclusion in a number of contracts with the exception of stipulations that represent the essence of the performance.
General terms and conditions ('algemene voorwaarden') are frequently applied to commercial transactions in the Netherlands. The Dutch Civil Code not only regulates the contents of general terms and conditions but also how the other party is to be informed on their existence.
When are you bound by general terms and conditions under Dutch law?
Under Dutch contract law, a party who has accepted the applicability of a set of general terms and conditions, without reading them, is bound by these terms and cannot employ the excuse that he was not aware of their contents. Upon acceptance, the terms and conditions become part of the agreement.
Dutch law provides that acceptance can take place by signing a document or in any other way. This means, that by not rejecting the terms and conditions, acceptance may be assumed. Although there are no formal requirements, it is advisable to have a written document signed in order to be able to prove the applicability of the terms and conditions should this later be disputed.
If a party wishes to reject the general terms and conditions proposed by the other party, it should do so by indicating in his acceptance that he will only accept the offer if his own terms and conditions apply and by clearly stating that he rejects the terms and conditions of the other party.
Under Dutch law, how should you make your general terms and conditions available to the other party?
As a general rule under Dutch law, a party using the terms and conditions is under a duty to provide the general terms and conditions to the other party before or at the moment when the agreement is concluded. If they do not do so, the other party may annul them. Alternatively, the party intending to use its general terms and conditions, may inform the other party, before formation of contract, that the terms and conditions are available for inspection or that they have been lodged with a Chamber of Commerce or the office of the clerk of a court and that they will be sent to the other party upon request.
Under what circumstances can you annul general terms and conditions under Dutch law?
A term contained in general terms and conditions may be annulled if, taking all circumstances into account, it is unreasonably onerous to the other party.
What are the 'grey' and 'black' lists of stipulations for consumer contracts under Dutch law?
Under Dutch law, certain stipulations contained in an agreement between a business and a consumer are considered unreasonably onerous from the outset. Therefore, it is important to pay close attention to article 6:236 of the Dutch Civil Code, the so-called 'black' list, and article 6:237 of the Dutch Civil Code, the 'grey' list.
Stipulations falling under the black list are stipulations that are invariably unreasonably onerous.
On the other hand, stipulations falling under the grey list are presumed to be unreasonably onerous.
The difference is that, if the matter falls within the scope of the grey list, a party can rebut the presumption that the stipulation is unreasonably onerous. This is not possible with matters falling under the black list.
What stipulations in general conditions of consumer contracts under Dutch law are deemed to be unreasonably onerous (and forbidden)?
In an agreement between a user and an other party, a natural person not acting in the course of a profession or business, the following stipulations in general terms and conditions shall always be deemed to be unreasonably onerous (and are blacklisted in article 6:236 of the Dutch Civil Code):
- a. a stipulation which entirely and unconditionally deprives the other party of the right to demand the performance promised by the user;
- b. a stipulation which excludes or limits the other party's right to dissolve the agreement, as laid down in which excludes or limits the other party's authority to dissolve as laid down in section 5 of title 5 of the Dutch Civil Code;
- c. a stipulation which excludes or limits the other party's authority to suspend performance as defined by law or grants the user a more far-reaching authority to suspend performance than is vested in him by law;
- d. a stipulation which excludes or limits the assessment of the question whether the other party's which leaves the assessment of the question whether the user has failed in the fulfilment of one or more of his obligations to him, or which makes the exercise of the rights to which the other party is entitled by law with regard to such failure dependent on the condition that he has first brought legal action against a third party;
- e. a stipulation pursuant to which the other party grants permission in advance to the user to transfer its obligations arising from the contract to a third party in one of the ways referred to in section 3 of title 2 of the Dutch Civil Code, unless the other party is at all times entitled to dissolve the contract, or the user is liable to the other party for the performance by the third party, or the transfer takes place in connection with the transfer of an undertaking to which both those obligations and the rights stipulated in respect of them belong;
- f. a stipulation that, in the event that the user's rights arising from the agreement are transferred to a third party, this will serve to exclude or limit powers or means of defence that the other party could assert against this third party by law;
- g. a stipulation that a statutory period of limitation or expiry within which the other party must assert any right, is reduced to a period of limitation or expiry of less than one year;
- h. a stipulation that in the event that during the execution of the agreement damage is caused to a third party by the user or by a person or object for which the user is liable, the other party is obliged either to compensate this damage to the third party or to bear a larger part of it in its relationship to the user than it would be obliged to by law;
- i. a stipulation that the user shall be entitled to increase the price stipulated by it within three months of the conclusion of the agreement, unless the other party is entitled to dissolve the agreement in that case;
- j. a stipulation that in the event of an agreement for the regular delivery of goods, including electricity, heat and cold and not including daily or weekly newspapers and magazines, or for the regular performance of transactions, this shall lead to a tacit extension or renewal in an agreement for a definite period of time, or to a tacit continuation in an agreement for an indefinite period of time, without the other party being entitled to terminate the continued agreement at any time with a period of notice not exceeding one month;
- k. a stipulation which excludes or limits the other party's authority to furnish proof, or which alters the distribution of the burden of proof arising from the law to the disadvantage of the other party, either because it contains a statement by the other party with regard to the soundness of the performance due to it, or because it burdens the other party with the proof that a shortcoming on the part of the user can be attributed to it;
- l. a stipulation which deviates from Article 37 of Book 3 of the Dutch Civil Code to the detriment of the other party, unless it relates to the form of statements to be made by the other party or provides that the user may continue to regard the address given to him by the other party as such until a new address has been communicated to him;
- m. a stipulation which provides that the other party, who at the time of entering into the contract has his actual place of residence in a municipality in the Netherlands, shall elect domicile in that municipality other than in the event that he shall at any time have no known actual place of residence in that municipality, unless the contract relates to registered property and domicile is elected at the offices of a civil-law notary;
- n. a stipulation which provides for the settlement of a dispute by a court other than the one which is competent by law, unless it grants the other party a period of at least one month after the user has invoked the clause in writing against it, to opt for settlement of the dispute by the court which is competent by law;
- o. a stipulation which excludes or limits the other party's power to terminate the agreement concluded verbally, in writing or by electronic means in a similar manner;
- p. a stipulation which, in the case of a contract for the regular supply of daily or weekly newspapers and magazines, shall lead to the tacit extension or renewal of the contract for a period of more than three months or to the tacit extension or renewal of the contract for a period of no more than three months, without the other party having the power to terminate the contract by giving notice of up to one month before the end of each extension or renewal period;
- q. a stipulation which, in the event of a contract for the regular delivery of daily or weekly newspapers and magazines, shall lead to the tacit continuation of that contract into a contract for an indefinite period of time without the other party having the right to terminate the continued contract at any time with a period of notice not exceeding one month or, if the regular delivery takes place less than once a month, with a period of notice not exceeding three months;
- r. a stipulation that the other party shall be obliged to give notice of termination of an agreement as referred to under j or p or q, respectively, at a specific moment;
- s. a stipulation that in the event of a contract for a limited period of time for the regular supply, by way of acquaintance, of daily or weekly newspapers and periodicals, the continuation of the contract shall be effected.
Drawing up - and using general terms and conditions under Dutch law
Drawing up general terms and conditions can be handy for a business. However, the legal requirements for the usage of general terms and conditions under Dutch law are often underestimated.