How to do business in The Netherlands – How to use general terms and conditions

General terms and conditions (‘algemene voorwaarden’) are applied regularly to commercial transactions in the Netherlands. It may therefore be useful to have a summary of the main rules for the use of such general terms and conditions under Dutch law. Below you will find such a summary. Please note though that national legislations of other countries may include 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 exact 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 said general terms and conditions in the agreement itself; or
  • attaching the general terms and conditions to a quotation or order confirmation with a clear reference to said general terms and conditions in the quotation or 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 informing the customers a cover letter about the fact that the included general terms and conditions apply or will apply to all (future) orders and deliveries.

Once the general terms and conditions have been made available, a reference to said general terms and conditions will suffice for future orders and deliveries. In that case mentioning that the general terms and conditions are applicable and will be sent to the customer upon its first request is sufficient if such is mentioned prior to or at the moment of entering into an agreement.

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. Simply making such general terms and conditions available will not suffice. In such 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. In order to be 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 nullify such conditions. If the terms are annulled for this reason, the user of the general terms and conditions will be unable to rely on them.

Battle of forms
What does the Dutch law stipulate if, upon concluding an agreement, both parties refer 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. The first reference is therefore decisive (the so-called first shot theory).

The above is only different if, in a later reference to the general terms and conditions, the applicability of such 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 are only referred to. Explicit rejection only occurs if the other party clearly states that it rejects the terms and conditions of the other party and will only accept the offer if its 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.

Contact information
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 contracts lawyers or the members of our International Desk.

 

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