send mail
  • Dutch contract law
    • Contract law in the Netherlands
      Dutch contract law
      Precontractual liability in the Netherlands
      Acceptance under Dutch contract law
      Battle of forms under Dutch law
      Nullity and annulment of a contract
      Contract error under Dutch law
      Joint liability under Dutch law
      Surety agreements
      Contents of a contract
      Reasonableness and fairness
      General terms under Dutch law
      Penalty clauses under Dutch law
      Assignment of a claim
      Actio Pauliana under Dutch law
      Contract interpretation
      Performance, breach, remedies
      Breach under Dutch contract law
      Force majeure
      Termination for breach
      Exemption clauses
      Limitation of actions
      Corona and contracts
      Types of contract under Dutch law
      Licenses under Dutch law
      Franchise under Dutch law
      Sale of Goods under Dutch law
      Lease under Dutch law
      Commercial Agency under Dutch law
      Distribution contracts
  • Dutch employment law
    • Employment law in the Netherlands
      Dutch employment law - 101
      Employment attorney
      Non-competition
      Non-compete clause
      Employment probation period
      Employment trial period
      Employment contract under Dutch law
      Employment duration
      Fixed-term and permanent
      Employment termination
      Termination of employment
      Ways to terminate employment
      Employment contract termination
      Employee termination
      Termination by mutual consent
      Dismissal of an employee
      Dismissal procedures
      Dismissal of an ill employee
      Summary dismissal under Dutch law
      Dismissal protection under Dutch law
      Dismissal payment in the Netherlands
      Employment law - miscellaneous
      Obligations of employers
      Sick pay
      Dutch employment lawyer
      Dutch works councils
      Business reorganization
      Collective redundancy
      Dutch freelance contracts
      Recruitment agency contracts
  • Litigation
    • Court proceedings in the Netherlands
      Litigation in the Netherlands
      Dutch legal proceedings
      Civil proceedings in the Netherlands
      NCC - Commercial Court proceedings
      Appeals in the Netherlands
      Decisions & rulings
      Preliminary relief in Dutch law
      Freezing orders in the Netherlands
      Remedies in Dutch litigation
      Conservatory arrest of assets
      Limitation periods in Dutch law
      Jurisdiction & scope
      Dispute resolution under Dutch law
      Jurisdiction of the NCC
      Personal jurisdiction of the NCC
      Arbitration in the Netherlands
      Costs & claims
      Debt collection in the Netherlands
      Commercial debt colection
      Debt collection compliance
      Consumer rights in debt recovery
      Cross-border debt recovery
      Claiming damages under Dutch law
      Extrajudicial costs under Dutch Law
      Costs of litigation in the Netherlands
  • Dutch lawyers
    • Best litigation, ICT & IP lawyers
      Best litigation lawyers in the Netherlands
      Best employment litigation lawyers
      Best ICT lawyers in the Netherlands
      Best IP lawyers in the Netherlands
      Best family lawyers in the Netherlands
      Best divorce lawyers in the Netherlands
      Best business and employment lawyers
      Best business lawyers in the Netherlands
      Best corporate lawyers in the Netherlands
      Best contract lawyers in the Netherlands
      Best M&A lawyers in the Netherlands
      Best labour lawyers in the Netherlands
      Best dismissal lawyers in the Netherlands
      Best Dutch immigration lawyers
      Finding & hiring a lawyer in the Netherlands
      Choosing a lawyer in the Netherlands
      Finding a Dutch employment lawyer
      Lists of lawyers in the Netherlands
      Hiring a Dutch attorney
      Resources about Dutch lawyers
      Dutch Bar Association
      Ranking litigation attorneys
      Top ranked civil litigation lawyers
      About lawyers in the Netherlands
  • About us
  • Contact us

Pre-contractual liability - under Dutch law?

  • Dutch law
  • Contract law
  • What is pre-contractual liability?

Negotiating, letters of intent and liability - under Dutch law

Pre-contractual liability in the Netherlands

What are your legal obligations while you are negotiating a contract under Dutch law? What is the legal status of pre-contractual documents? Are you bound by a letter of intent? Can you enforce a “Gentleman’s agreement” under Dutch law?


What role do good faith and reasonableness have in contract negotiations under Dutch Law?

Dutch law adheres to the doctrine of freedom of contract. Freedom of contract means that parties may, within the bounds of the law, freely enter, or not enter, into contracts.

However, a feature of Dutch law is its adherence to an obligation of reasonableness and good faith in contractual dealings. Dutch case law supports that negotiating parties have obligations of good faith and reasonableness. In general terms, good faith and reasonableness require that a negotiating party takes into account the legitimate interests of the other party. The obligation of good faith and reasonableness should always be kept in mind if you are negotiating a contract under Dutch law, for example if you are contemplating breaking off the negotiations.


When is a contract a binding contract under Dutch law?

Under Dutch law, a contract is formed through offer and acceptance: see "Acceptance of an offer under Dutch law". In most cases, a contract does not have to be in writing or contained in a single document and the parties do not need to have reached an agreement on all details of the contract. Therefore, the point in time in the negotiations at which a contract is formed may not always be obvious.


What is the liability under Dutch law during negotiations?

Pre-contractual negotiations are not explicitly regulated in the Dutch Civil Code. However, case law from the Supreme Court (Hoge Raad) demonstrates a well-established approach to determining the parties' obligations during negotiations. Whether a negotiating party is under a legal obligation to continue negotiations or alternatively to pay damages for withdrawing from negotiations will depend on the stage of the negotiations. The more extensively the parties have negotiated and discussed the details of the proposed contractual relationship, the more difficult it will be for a party to break-off the negotiations.

There are three phases of negotiations:

  1. During the initial “free negotiation” phase, the parties are free to break off the negotiations without paying damages to the other party
  2. During the second stage of negotiations the parties are still free to break-off the negotiations but may be required to compensate the expenses of the other party to fulfil their obligation of reasonableness and good faith.
  3. At the third stage of negotiations, the obligation of good faith dictates that the parties cannot break off the negotiations without compensating the other party. If the other party reasonably believed that a contract would come into existence, the damages may be calculated on the basis of what the position of the other party would have been if the contract had indeed been concluded, in other words, a loss of profit.

What is the legal status of Letters of Intent and gentlemen’s agreements under Dutch law?

It is not uncommon for documents to be produced during the negotiation process.

Common names of such documents are:

  1. Letter of Intent (LoI)
  2. Heads of Agreement (HoA), and
  3. Memorandum of Understanding (MoU).

As mentioned above, it is not necessary for the parties to have reached an agreement on all major points for a contract to have come into existence under Dutch law. The Dutch courts will look at 'substance over form'. This means that the name or form of the document is not decisive. It is, therefore, possible under Dutch law that documents produced during the negotiations will individually, or collectively with other communications, have contractual force. A Dutch court may use default provisions of Dutch contract law and the principle of reasonableness and fairness to fill in the gaps of the agreement.


What are common conditions precedent in the Dutch jurisdiction?

Under Dutch contract law, parties are free to choose to stipulate in documents that the documents, or parts thereof, are not to be considered binding. Documents may also include “conditions precedent” that is, conditions that must be fulfilled before a contract will be formed.

Common conditions precedent in the Dutch jurisdiction are subject to contract:

  1. subject to contract,
  2. subject to a written agreement,
  3. subject to signature,
  4. subject to approval from the executive board,
  5. subject to approval from the supervisory board,
  6. subject to approval from the (general meeting of) shareholders.

To ensure maximum effectiveness, these clauses must be drafted in a careful and detailed manner. It is advisable to consult a Dutch lawyer in relation to such clauses. A Dutch lawyer will also be able to advise whether you, or the other negotiating party, are likely to be able to rely on documents produced during the negotiations.


Jan Willem de Groot - lawyer in the Netherlands
June 20th, 2024

About the author

Dutch lawyer in the Netherlands - Jan Willem de Groot

Jan Willem de Groot is a lawyer in the Netherlands, author and speaker. As a Dutch lawyer, his main areas of expertise are contract law and litigation in the Netherlands.

Contract law in Holland
Dutch law of contracts
Pre-contractual liability Acceptance of an offer Battle of forms under Dutch law Mistake in Dutch contract law Nullity of an agreement Joint and several liability Liability of the Surety
Contents of a contract
Reasonableness and fairness General terms under Dutch law Liquidated damages Assignment of a claim Prejudicial Dutch contracts Interpretation of contracts
Performance, breach, remedies
Breach of contract Acts of God under Dutch law Corona and Dutch contracts Contract termination for cause Damage claims under Dutch law Restriction of liability Statute of limitations
Contract law - miscellaneous
Licences under Dutch law Franchises in the Netherlands Contracts of sale under Dutch law Dutch rental agreements Commercial agents in Holland Distribution contracts in Holland

Proceedings in Holland
Legal Proceedings
Legal proceedings Debt collection Dutch limitation periods Preliminary relief Freezing orders Court proceedings Appeal proceedings Remedies under Dutch law
Netherlands Commercial Court
Going to court in The Netherlands Jurisdiction of the NCC Personal jurisdiction Commercial dispute resolution
Arbitration
Arbitration in the Netherlands
Information about this website? Send mail.
Terms of use and privacy policy:

The content provided on www.dutch-law.com is offered by the Dutch Law Institute for general information purposes only.
It cannot deal with the specific details of any particular situation ... [read more]

Address:
Dutch Law Institute
Beethovenstraat 124-3
1077 JR Amsterdam
The Netherlands
Telephone:

+31 65224 2503

Hours:

Monday 9am–5pm
Tuesday 9am–5pm
Wednesday 9am–5pm
Thursday 9am–5pm
Friday 9am–5pm
Saturday Closed
Sunday Closed

Dutch Law Institute
  • About the Dutch Law Institute
  • Dutch Law Intitute on LinkedIn
  • Netherlands employment law
Published by the Dutch Law Institute - edited by Jan Willem de Groot, lawyer in the Netherlands - © 2021 - 2025, Dutch Law Institute | Sitemap [XML]