CORONA VIRUS VS DUTCH CONTRACTS

Now that the world and The Netherlands are suffering under the Corona virus and the counter measures, problems occur with obligations originating from contracts.
When these obligations are not fulfilled (not entirely or only partly or too late), the creditor can ask the debtor to perform and or sue for damages.

If a debtor cannot perform because of the impact of the Corona virus measures, an appeal to force majeure will be invoked.

If an agreement contains a Force Majeure clause (Dutch: “overmacht”), the question is whether the Corona virus fits the definition of force majeure therein. Also, it can be that the parties on entering into the agreement referred to standard terms which usually contain a force majeure clause. 

Article 6:75 of the Dutch Civil Code defines force majeure. To successfully invoke force majeure, the shortcoming in the fulfillment is not due to the debtor’s fault or at his risk. Although Dutch law does not stipulate as a condition that performance has become impossible, an appeal to force majeure will only be permitted in exceptional cases in the event performance is still possible and or the impossibility was foreseeable at the time of contract conclusion.

The specific clauses and standard terms describing in which situation force majeure can occur, need to be taken into account too.

However, article 6:2 of the Dutch Civil Code provides that the creditor and the debtor should behave towards each other in conformity with the demands of ”reasonableness and fairness”(Dutch: “redelijkheid en billijkheid”). A rule in force between them by law, custom or legal act shall not apply, to the extent that it would be unacceptable under the circumstances based on standards of reasonableness and fairness as determined by the courts. 

Reasonableness and fairness standards were defined by the Dutch Supreme Court (HR 13 maart 1981, NJ 1981/635): “The question as to how the relationship of the parties is regulated in a written contract and whether this contract leaves a gap that needs to be filled, cannot be answered on the basis of a purely linguistic interpretation of the provisions of that contract. After all, the answer to that question is based on the meaning which parties could reasonably grant to these provisions in the given circumstances and what they could reasonably expect from each other in this respect. It may also be important to which social circles the parties belong and what legal knowledge can be expected from such parties.” (translated). This rule also applies to oral contracts.

Article 6: 258 of the Dutch Civil Code provides that at the request of one of the parties, the Court may even amend the consequences of an agreement, dissolve it in whole or in part, on the basis of unforeseen circumstances of such a nature that the other party cannot expect unaltered maintenance of the contract in accordance with standards of reasonableness and fairness. The amendment or dissolution can even be given retroactive effect. 

With these tools it may be possible to combat ugly consequences of the Corona virus measures for parties who chose Dutch law in their contracts, or to whom Dutch law is applicable. Since the Dutch Courts were only open for urgent measures until 7 March 2020, case law with regard to the Corona virus measures is not available yet.

The above tools should however be invoked out of Court first, preferably in a lawyers’s letter, before starting legal proceedings.

If you are worried about Dutch law or other contract(s) and need to send out a legal letter, please contact our Dutch Partner Office :

Mr. Arnold Hoegen Dijkhof 
Email – ac@hd-dutchlawyers.com
Tel – +31 20 462 40 70
Website – www.hd-dutchlawyers.com

Stay healthy!

With kind regards, yours sincerely, 

Mr. Arnold C. Hoegen Dijkhof, LL.M., Advocaat (Author)