Limitation of liability: how far can you go under Dutch law?

An exclusion or limitation of liability is in principle valid under Dutch law, and between businesses a cap at the contract price or an exclusion of consequential loss is usually upheld. The main exceptions are loss caused by intent or conscious recklessness, clauses in consumer contracts, and product liability, which cannot be excluded at all.

The limits come from three directions: reasonableness and fairness under Article 6:248(2) of the Dutch Civil Code (BW), the rules on general terms and conditions in Articles 6:231 to 6:247 BW, and mandatory law. The strength of a clause therefore depends less on how absolutely it is worded than on how defensibly it is calibrated.

When does a limitation clause hold?

A clause holds unless relying on it would be unacceptable by the standards of reasonableness and fairness (Article 6:248(2) BW). That is a high threshold: the court will not set a clause aside simply because the result is harsh.

Since the Supreme Court’s Saladin/HBU judgment of 1967, Dutch courts weigh all circumstances. These include the seriousness of the fault, the nature and extent of the loss, the way the clause was agreed, the relative positions and expertise of the parties, and whether the risk was or could have been insured.

Reliance on a clause is in practice excluded where the loss was caused by intent (opzet) or conscious recklessness (bewuste roekeloosheid) of the debtor or its senior management. For ordinary negligence, a clause between professional parties usually holds.

What types of clauses are common?

Most contracts combine several limits. Each type has its own risk of failure, so draft each one separately and clearly.

• A cap on the amount: for example the contract price, the fees paid in the last 12 months, or the amount the insurer pays out.
• An exclusion of indirect or consequential loss, such as lost profit, lost data or reputational damage. Define what you mean, because Dutch law has no fixed definition of “indirect loss”.
• A shortened period for complaints or claims, for example notice of a defect within 14 days and a claim within one year.
• An exclusion of liability for auxiliary persons and subcontractors, which Article 6:76 BW otherwise attributes to the debtor.

A cap that bears a sensible relationship to the contract value and to the insured amount usually survives scrutiny. A blanket exclusion of all liability frequently does not, especially if the supplier was insured for the loss.

What extra rules apply to general terms and conditions?

A limitation clause in general terms binds the other party only if the terms were made available before or when the contract was concluded. Otherwise the other party can annul the clause under Articles 6:233(b) and 6:234 BW.

Towards a consumer, a clause that wholly or partly relieves the user of a statutory obligation to pay damages is on the grey list of Article 6:237(f) BW. It is presumed unreasonably onerous, and the business must prove otherwise. A small business can sometimes rely on the same reasoning before the court, even though the lists formally protect consumers only.

In a consumer sale, the seller also cannot limit the buyer’s statutory rights on non-conformity, such as repair, replacement or price reduction (Article 7:6 BW).

What can never be excluded?

Liability for defective products under Articles 6:185 to 6:193 BW cannot be excluded or limited towards the injured person (Article 6:192 BW). The producer is liable regardless of fault for personal injury and for damage to private property above a deductible of €500 (Article 6:190 BW).

Other mandatory rules also apply regardless of the contract. An employer cannot contract out of its liability for workplace accidents under Article 7:658 BW, and in carriage and transport contracts statutory or treaty limits apply instead of the agreed ones.

What should you check as the supplier using the clause?

• Have you provided your general terms to every customer before the contract is concluded?
• Is the cap linked to the contract value or your insured amount?
• Is “indirect loss” defined in the clause?
• Does the clause cover your subcontractors and auxiliary persons?
• For consumers: does the clause respect the grey list and the mandatory rules on consumer sales?

What should you check as the customer facing the clause?

• Were the general terms made available to you in time? If not, you may annul the clause.
• Was the loss caused by intent or conscious recklessness of the supplier’s management?
• Was the supplier insured for this loss?
• Does the clause cut deeply into the core obligation of the contract?
• Does a shortened complaint or claim period apply, and have you met it?

What can we do for you with limitation of liability?

Our corporate lawyers advise both suppliers and customers on liability risks and claims for damages:

• We draft or review your limitation clauses and general terms and conditions.
• We check whether your terms were validly made available and are enforceable.
• We assess whether a counterparty can rely on its limitation clause in your case.
• We calculate your claim and send the notice of default.
• We conduct proceedings before the subdistrict court or district court.

Summary

• A limitation of liability is in principle valid, especially between businesses.
• A court sets a clause aside only if reliance on it is unacceptable under Article 6:248(2) BW; intent and conscious recklessness are never covered.
• General terms must be made available in time, and towards consumers an exoneration clause is presumed unreasonably onerous (Article 6:237(f) BW).
• Product liability cannot be excluded towards the injured person (Article 6:192 BW).
• Calibrate the cap to the contract value and insurance, and define indirect loss.

Frequently asked questions