Battle of forms under Dutch law: whose general terms prevail

In a battle of forms under Dutch law the first set of general terms wins. Article 6:225 paragraph 3 of the Dutch Civil Code (Burgerlijk Wetboek, BW) provides that where an offer and an acceptance each refer to different general terms and conditions, the second reference has no effect unless it also expressly rejects the applicability of the terms referred to first. The Netherlands therefore applies the first shot rule, not the last shot rule familiar from English and American practice, and not a knock-out rule.

That single sentence decides most disputes about small print between businesses, but it is only the first of three hurdles. Your terms must also have been made available in time, and you must be a party who is allowed to rely on the incorporation rules at all. This article works through each of those hurdles, explains how a Dutch court reads the exchange of documents, sets out what changes in a cross-border sale, and ends with what to put in your quotation tomorrow morning.

What a battle of forms is

A battle of forms arises when both parties do business on their own standard terms. A supplier sends a quotation referring to its general terms and conditions (algemene voorwaarden); the buyer replies with a purchase order referring to its own. Both documents describe the same transaction and both allocate risk differently, typically on liability caps, warranty periods, retention of title, payment terms, penalties, applicable law and the competent court. The commercial agreement is not in doubt; the question is which set of clauses governs it.

The exchange matters because each document is an offer or an acceptance within the meaning of article 6:217 BW. An acceptance that deviates from the offer counts as a rejection of that offer and as a new offer under article 6:225 paragraph 1 BW. Where the deviation concerns only points of minor importance, article 6:225 paragraph 2 BW provides that the contract is nevertheless concluded in accordance with the acceptance, unless the offeror objects to the difference without delay. Paragraph 3 then adds the specific rule for competing sets of general terms.

No battle occurs where the parties negotiate one bespoke contract, or where one of them signs the other set without reservation. It also does not arise between a business and a consumer in the same way, because a consumer contract is governed by additional mandatory protections.

The statutory rule: article 6:225 paragraph 3 BW

The rule is mechanical, which is what makes it useful. If the supplier refers to its terms in the quotation and the buyer merely refers to its own in the order, the buyer’s reference has no effect and the supplier’s terms apply. The buyer only breaks that result by expressly rejecting the supplier’s terms, which in Dutch practice is done with a standard sentence to the effect that the applicability of any general terms used by the other party is expressly rejected (uitdrukkelijk van de hand gewezen).

If the buyer does include such a rejection, the position changes but does not simply reverse. The buyer’s counter-offer is then a genuine new offer, and the supplier must decide whether to accept it. A supplier who delivers without comment risks being taken to have accepted, so the practical answer is to reject the rejection in the order confirmation and to keep doing so until the point is settled. Where both sets contain a rejection clause, neither set is incorporated and the contract is governed by the general law of the Civil Code, which for most commercial risks is considerably less favourable to a supplier than its own terms would have been.

Two consequences follow for your own documents. Put the reference to your terms in your first document, not in the invoice, and include a clause rejecting the other party’s terms in advance. A clause of that kind costs nothing and, under article 6:225 paragraph 3 BW, does more work than any other sentence in your paperwork.

Getting your terms incorporated: articles 6:233 and 6:234 BW

Winning the sequence is pointless if the terms were never properly made available. Article 6:232 BW confirms that a party is bound by general terms even if it was unaware of their content, but article 6:233 BW allows that party to annul a clause on two grounds: because the clause is unreasonably onerous having regard to all the circumstances, or because the user did not give the other party a reasonable opportunity to take note of the terms.

Article 6:234 BW sets out how that opportunity is given. The primary route is to hand over the terms before or at the time the contract is concluded, which for an electronic contract means sending them in a form the recipient can store and reproduce, for example as an attachment. Only where handing them over is not reasonably possible may the user instead state before conclusion where the terms can be consulted, having deposited them with the Chamber of Commerce or a court registry and undertaking to send them on request. A hyperlink in an email footer, a reference to a website without more, or terms printed on the back of an invoice sent after delivery will regularly fail this test.

Language is part of the same assessment. Terms drafted only in Dutch supplied to a foreign counterparty who negotiated the deal in English can be challenged as not reasonably accessible, so maintain a version in the language of the negotiations. The burden of proving timely provision rests on the party invoking the terms, which is why the practical defence is documentary: dated quotations, sent items, delivery receipts and, for a webshop, a log of the acceptance.

Who may rely on the incorporation rules

The protection of articles 6:233 and 6:234 BW is not available to everyone, and this exception surprises large companies more often than any other point in this area. Under article 6:235 BW a party cannot invoke those articles if it is a legal entity that publishes its annual accounts under Dutch company law, or if it employs fifty or more persons at the time the contract is concluded. A substantial company that receives terms it never actually read is therefore bound by them, however inaccessible they were, and its only remaining argument is that a specific clause is unacceptable by standards of reasonableness and fairness under article 6:248 paragraph 2 BW.

The second limitation is territorial. Article 6:247 paragraph 2 BW provides that the section on general terms and conditions does not apply to a contract between parties acting in the course of a business or profession who are not both established in the Netherlands, whatever law governs the contract. In a sale between a Dutch supplier and a German or Belgian buyer, therefore, the incorporation rules of articles 6:233 and 6:234 BW simply drop away, even where Dutch law has been chosen. What remains is article 6:225 paragraph 3 BW, ordinary contract interpretation and the general standard of reasonableness and fairness.

The black and grey lists of articles 6:236 and 6:237 BW, which declare certain clauses unreasonably onerous outright or presumptively, apply only to consumers. Dutch courts do allow those lists a certain reflex effect in favour of very small businesses whose position resembles that of a consumer, but that is a matter of argument in the individual case rather than a rule you can rely on.

How a Dutch court reads the exchange

Article 6:225 paragraph 3 BW answers the question only where the sequence is clear. In practice the documents overlap, terms are referred to in some messages and not in others, and the parties have traded before. The court then interprets the exchange according to the Haviltex standard: what the parties could reasonably attribute to each other’s statements and conduct in the given circumstances, and what they could reasonably expect from each other. Four elements carry most of the weight.

• The wording of each document, and in particular whether a reference to general terms is present and whether the other set is expressly rejected.
• The conduct of the parties before, during and after conclusion, including whether an objection was made and how quickly.
• The course of dealing between the same parties, since terms consistently used and never disputed in earlier transactions are more readily taken to apply.
• Established usage in the relevant trade, which can point to a sector-wide set of conditions.

Where the exchange is genuinely inconclusive, the court can still hold that a particular clause is unacceptable in the circumstances under article 6:248 paragraph 2 BW, or that no agreement was reached on the disputed point at all, in which case the default rules of the Civil Code fill the gap. A liability cap that falls away in this manner exposes the supplier to full damages under article 6:74 BW, which is why suppliers have more to lose from an unresolved battle than buyers do.

If your counterparty is a public authority and the dispute concerns a decision rather than a contract, none of this applies and the route is a formal objection procedure under administrative law, with its own six-week deadline.

Cross-border sales: the CISG, Rome I and jurisdiction

Three separate regimes can apply to the same international sale, and they answer different questions. Rome I determines which national law governs the contract: the parties may choose, and in the absence of a choice a contract for the sale of goods is governed by the law of the country where the seller has its habitual residence. A choice of Dutch law in your terms only helps if your terms were incorporated, which is precisely what is in dispute, so put the choice of law in the body of the contract as well.

The United Nations Convention on Contracts for the International Sale of Goods (CISG, in Dutch the Weens Koopverdrag) applies of its own force to commercial sales of goods between parties established in different contracting states, and the Netherlands is one of them. It is easy to forget that a choice of Dutch law includes the CISG, because the Convention is part of Dutch law; excluding it requires an express provision. Under article 19 CISG a reply containing additions or modifications that materially alter the offer, including terms on liability, payment, quality, quantity, delivery and the settlement of disputes, counts as a counter-offer. That points towards a last shot outcome, although courts in several contracting states apply a knock-out approach instead and the question is not settled uniformly. The practical lesson is that the comfortable Dutch first shot rule cannot be assumed in an international sale of goods.

Jurisdiction is a third and separate question. Within the European Union a choice of court agreement is governed by the Brussels I bis Regulation and must satisfy its formal requirements; if the clause is valid, the chosen court has exclusive jurisdiction and other courts must decline. An arbitration agreement operates differently again, outside that Regulation, and is assessed under the arbitration law of the seat. A dispute clause hidden in general terms that were never incorporated is worth nothing, so mirror the choice of law, forum and language in the signed document.

How to make sure your terms prevail

The battle is won in the sales process rather than in court, and the measures that work are administrative rather than clever. Because the first reference prevails, everything depends on your terms travelling with the earliest document and on your people noticing when someone else fires back.

• Refer to your general terms in the quotation and attach them, in the language of the negotiations, so that the reference and the text arrive together.
• Include a clause rejecting in advance the applicability of any general terms used by the other party, and repeat it in the order confirmation.
• Read incoming purchase orders and confirmations for a rejection clause, and respond in writing before performance begins, because silence followed by delivery is the classic way to lose a position you had already won.
• Deposit your terms with the Chamber of Commerce or a court registry as a fallback, and keep a dated record of every version, so that you can prove which text applied at the time of the contract.
• Use a signed framework agreement for a continuing relationship and state in it that it prevails over any terms referred to in individual orders.
• For international sales, state the choice of law, whether the CISG applies, the forum and the language in the signed document itself, not only in the terms.

Reviewing your standard terms is worth doing at the same time. Clauses that reverse the burden of proof, exclude liability entirely or impose an unrealistically short complaint period tend to be the first casualties in litigation, and a cap that is defensible is worth more than an exclusion that is not. Before you sign anything a counterparty has drafted, our article on how to sign a contract without hidden legal issues sets out what to check.

If the dispute has already arisen

Reconstruct the file before taking a position. Put the documents in chronological order, mark for each one whether it refers to general terms and whether it rejects the other set, and establish exactly when each was sent and received. That reconstruction usually decides the case, because article 6:225 paragraph 3 BW turns on sequence and wording rather than on what the parties believed.

Then check the two limitations before you rely on the incorporation rules: whether your own organisation falls within article 6:235 BW because of its size or its published accounts, and whether both parties are established in the Netherlands for the purposes of article 6:247 BW. Only after that does it make sense to consider the substantive clauses in play, the remedies available under articles 6:74 and 6:265 BW, and whether interim relief in summary proceedings is needed to keep the supply running while the point is resolved. Court fees are fixed by statute and revised each year, and a successful party recovers only a standardised part of its legal costs, so the cost of the argument should be weighed against the value of the clause in dispute.

Law & More reviews and drafts general terms and conditions, advises on the incorporation and enforceability of standard clauses in Dutch and cross-border contracts, and represents suppliers and buyers when a battle of forms ends up in court or in arbitration. If a purchase order has arrived with unfamiliar small print, contact the team at Law & More before you deliver.