General terms and conditions (‘algemene voorwaarden’) are very often applied to commercial transactions in the Netherlands. We hereby give you an overview of the main rules with regard to the use of general terms and conditions under Dutch law. Please note that national legislations of other countries may contain different rules on this subject.
Main rule: terms and conditions must be provided
Under Dutch law the applicability of general terms and conditions must be agreed upon prior to or at the moment of entering into an agreement.
The principal rule is that a copy of the general terms and conditions must be made available (actually handed over) to the other party at that time.
The general terms and conditions can be declared applicable and provided to the other party by:
- attaching the general terms and conditions to the agreement with a clear reference to the general terms and conditions in the agreement itself;
- attaching the general terms and conditions to a quotation/order confirmation with a clear reference to the general terms and conditions in the quotation/order confirmation (it is possible to do this by e-mail); or
- sending the general terms and conditions to all existing customers and all future customers and inform the customers in the letter about the fact that the included general terms and conditions apply to all (future) orders and deliveries.
Once the general terms and conditions have been made available, for future orders and deliveries a reference to the general terms and conditions will be sufficient. In that case it is sufficient if it is mentioned prior to or at the moment of entering into an agreement that the general terms and conditions are applicable and will be sent to the customer upon its first request.
The requirement of making the general terms and conditions available does not apply to international agreements, i.e. agreements between a Dutch company and a non-Dutch supplier or customer. However, in those situations the terms must be accepted by the non-Dutch contract party; such party must understand that when entering into the agreement the general terms and conditions will apply. For being able to prove this, it is advisable to always provide the terms prior to or at the moment of entering into the agreement.
If the general terms and conditions have been referred to, but have not been provided to the other party, the other party may annul these conditions. If the terms will be annulled for this reason, the user of the general terms and conditions will be unable to rely on the conditions.
Battle of forms
What does the Dutch law provide if both parties referred to their own general terms and conditions? This issue is referred to as the ‘battle of forms’.
Under Dutch law the main rule is that the general conditions first referred to prevail on those later referred to by the other party; the first reference is decisive (the so-called first shot theory).
This is only different if in a later reference the applicability of the general terms and conditions in the first reference is explicitly rejected. In that case the terms and conditions mentioned first are not applicable. To assume explicit rejection of the first terms and conditions it is not sufficient if the own (second) general terms and conditions will only be referred to. Explicit rejection is involved if the other party clearly states that he rejects the terms and conditions of the other party and will only accept the offer if his own terms and conditions apply.
If then the second terms and conditions are accepted explicitly or implicitly (for example by starting with the execution of the agreement) these terms and conditions will apply. However, if the second terms and conditions are also rejected, an impasse may occur. Therefore, in case of a battle of forms situation it is important that the parties clearly agree on the applicability of any general terms and conditions.
Please note that if the other party is domiciled outside the Netherlands, a different outcome may be possible.
Should you have any questions about (the use of) general terms and conditions or doing business in the Netherlands in general, please do not hesitate to contact one of our Commercial contract lawyers or the members of our International Desk.