Verbal agreement in business: is it binding and how do you prove it?

A verbal agreement in commercial transactions is binding under Dutch law. A contract is formed by offer and acceptance (article 6:217 of the Dutch Civil Code), and a declaration may be made in any form, so a spoken yes creates the same obligations as a signed document. The main exception: where the law prescribes a written form for a particular contract, a purely verbal deal has no effect. For everything else, the weakness of a handshake deal is not its validity but its provability. The party invoking the agreement carries the burden of proof, and without a record it has to reconstruct the deal from emails, invoices and conduct.

Is a verbal agreement binding in commercial transactions?

Yes. A spoken agreement between businesses binds both sides, unless the law requires writing for that type of contract.

Dutch contract law rests on agreement, not paperwork. Article 3:37 of the Civil Code states that, unless the law says otherwise, a declaration may be made in any form and may even be implied by conduct. There is no general requirement of writing or signature, and no requirement of “consideration” as in common-law systems.

Much Dutch commercial activity runs on contracts nobody signed: a purchase order confirmed by telephone, a delivery term extended in a corridor, a price change settled in a video call. Under article 6:217 of the Civil Code each of these is a contract or an amendment, and a court will enforce it.

Even a fully proved spoken deal often leaves open the points that later cause the dispute: delivery date, late payment, general terms, the competent court. Dutch law fills such gaps with default rules and with reasonableness and fairness (article 6:248 of the Civil Code), but the result is rarely the deal either party had in mind.

When is the contract concluded, and who can bind the company?

A contract comes into being at the moment an offer is accepted. Two questions decide whether that moment has arrived: was there an offer at all, and did the acceptance reach the other side?

What counts as an offer and an acceptance?

An offer is a proposal that is complete enough for a simple yes to turn it into a contract. A statement that a party might be interested, or that it will look into the possibility, is an invitation to negotiate rather than an offer. Accepting it produces nothing. The dividing line is what the other party could reasonably infer from the words used and the circumstances. That is the test Dutch law applies to declarations generally: you are bound by the meaning the other side could justifiably attach to what you said.

An acceptance takes effect when it reaches the person who made the offer, not when it is spoken or sent. A message left unread on a voicemail can therefore still conclude a contract, because it has arrived. An acceptance that departs from the offer on any point counts as a rejection combined with a new offer. The exception is a minor deviation to which the original offeror does not object without delay. Until acceptance the offer can normally be revoked, but not if it states that it is irrevocable or sets a period for acceptance.

Silence is generally not acceptance. In an ongoing commercial relationship, however, the position can be different. A party that receives a written confirmation of a telephone conversation and lets it pass without protest may find that it has accepted the terms in it. In that setting, the other party was entitled to expect a reaction. This is why the confirmation email is such a powerful instrument, and why you should correct an incorrect confirmation quickly.

Could the person you spoke to bind the company?

A verbal deal is only worth as much as the authority of the person who made it. Companies act through their directors and through people holding a power of attorney.

For a private limited company (BV) and a public limited company (NV), the Civil Code gives the management board the power of representation. The articles of association may determine whether directors act alone or jointly. Those arrangements, and any registered powers of attorney, are recorded in the trade register (Handelsregister) kept by the Chamber of Commerce (Kamer van Koophandel, KVK). An extract from that register shows who may represent the company, and checking it takes little time compared with the size of most deals.

Where the person had no authority, the contract does not bind the company, unless the company created the appearance that the person did have it. This doctrine of apparent authority protects a counterparty acting in good faith. It does, however, require circumstances attributable to the company itself, such as a job title, a previous course of dealing or an email signature that presents the person as authorised. A purchaser who negotiates a substantial verbal deal with a junior employee, without checking anything, has a weak case.

Which agreements does Dutch law still require in writing?

A limited number of contracts must be in writing, such as a home purchase by a private buyer, a non-compete clause and a franchise agreement. For those contracts, a spoken agreement is not merely hard to prove but legally ineffective.

The purchase of a home by a private buyer must be entered into in writing under article 7:2 of the Civil Code. The buyer then has a three-day cooling-off period in which the purchase can be undone without giving reasons. That provision protects consumers, so it does not apply where a company buys business premises. A verbal agreement on a commercial property can therefore bind, although the transfer of ownership itself always requires a notarial deed and registration.

A non-compete clause is valid only if it has been agreed in writing with an adult employee, under article 7:653 of the Civil Code. In a fixed-term employment contract it also needs a written statement of the compelling business interests that justify it. A clause discussed at the job interview and never written down has no effect at all.

Under the franchise rules in Book 7 of the Civil Code, in force since 1 January 2021, a franchise agreement is entered into in writing. An arbitration agreement must be proved by a written document under article 1021 of the Code of Civil Procedure (Rv). The assignment of a claim needs a deed under article 3:94 of the Civil Code. And a private individual who stands surety for a business debt can only be held to that undertaking on the basis of a written document.

Where is writing required, and what happens without it?

For cross-border trade the rule is, if anything, even more liberal. The Vienna Sales Convention (CISG) applies by default to international sales of goods between businesses in contracting states, including the Netherlands. It expressly provides that a contract of sale need not be concluded in or evidenced by writing and may be proved by any means. If you want the security of a written contract in international dealings, you have to create it yourself, or exclude the Convention and choose a national law that demands more.

How do you prove a verbal agreement?

You prove a verbal agreement with any evidence the court finds convincing, and contemporaneous documents carry the most weight. The burden of proof lies with the party that relies on the agreement.

The burden of proof rests on the party that relies on the legal consequences of the facts it alleges. That is the rule in article 150 of the Code of Civil Procedure. In a dispute about a verbal agreement this is almost always the claimant: the supplier chasing payment, the contractor claiming extra work, the intermediary claiming its commission.

The good news is that Dutch procedure does not restrict how that proof may be delivered. Article 152 of the Code of Civil Procedure allows evidence by all means and leaves the weight of the evidence to the court. No rule excludes oral evidence about oral contracts, and no written note is needed to start with. What the court wants is a coherent account, supported by material that was not created for the litigation.

What actually convinces a court?

Contemporaneous documents beat recollection. A confirmation email sent the same afternoon, a calendar entry, a quotation with a handwritten adjustment, a chat message about the delivery week, a project plan circulated after the meeting: each of these fixes a detail at a moment when nobody was in dispute. Ranked roughly by strength, the material that decides these cases is:

• written confirmations of the conversation that the other party received and did not contradict;
• invoices matching the alleged terms, particularly where they were paid in whole or in part;
• performance by both sides that only makes sense if the alleged agreement existed;
• internal documents of the other party, such as an order entry or a budget, which can be demanded in proceedings where they are specifically identified;
• witness evidence from people who were present, heard under oath if the court orders a witness examination.

May you record the conversation?

Recording a conversation is lawful in the Netherlands when you take part in it yourself, and a recording made that way can be used as evidence. It is not a neutral step, though. It damages trust if it comes out, it may conflict with contractual confidentiality, and processing the recording afterwards still has to comply with data protection rules. As a routine practice it is a poor substitute for simply writing down what was agreed.

How does a court decide what was actually agreed?

A Dutch court looks at what the parties could reasonably expect from each other, not only at the words used. General terms apply only if they were validly agreed and made available.

What is the Haviltex standard?

Since the Haviltex judgment of the Hoge Raad (the Dutch Supreme Court) in 1981 (ECLI:NL:HR:1981:AG4158), the meaning of a contract is not determined by the words alone. It depends on the meaning the parties could reasonably attribute to the terms in the circumstances, and on what they could reasonably expect from each other. The court looks at the negotiations, the position and expertise of the parties, market practice and the way the parties behaved after the deal.

For a verbal agreement this cuts both ways. There are no words to fall back on, so conduct and correspondence become the primary material. A party whose behaviour was consistently at odds with the deal it now claims has a difficult time.

Two default rules do a lot of work where the parties never discussed a point. First, reasonableness and fairness supplement the contract and can, in exceptional cases, set aside a term whose application would be unacceptable. Second, a buyer or client who discovers a defect must complain within a reasonable time after discovering it, or loses the right to rely on it. In commercial dealings that period is short. Letting an unsatisfactory delivery pass in silence for months is a familiar way of losing an otherwise good claim.

Whose general terms apply?

Most commercial parties intend their own general terms and conditions to apply, and most verbal deals are struck without either side mentioning them. Dutch law resolves the resulting collision with a first-shot rule in article 6:225 of the Civil Code. Where an offer and an acceptance each refer to different sets of general terms, the second reference has no effect, unless it expressly rejects the terms referred to in the offer. A rejection buried in the small print of the second set is not enough; it has to be explicit.

Applicability is only the first hurdle. General terms bind the other party only if that party was given a genuine opportunity to take note of them before or at the time of contracting. In practice that means handing them over or sending them. A reference to a website is not automatically sufficient in a business-to-business setting. A verbal agreement in which nobody mentioned general terms, followed by an invoice with the terms printed on the back, usually results in terms that do not apply at all. Our page on the work of a contract lawyer explains how these documents are put in order before, rather than after, a dispute.

Can the other side walk away before there is a deal?

As a rule, yes: freedom of contract includes the freedom not to conclude one. Only in exceptional circumstances is breaking off negotiations unacceptable.

Under the case law of the Hoge Raad, breaking off negotiations is only unacceptable in exceptional circumstances: where the other party could justifiably expect that some contract would come about, or where other circumstances make the break-off unacceptable.

Where that threshold is crossed, the usual remedy is compensation for costs incurred, and only rarely for the profit the failed contract would have produced. The practical lesson mirrors the one about handshakes. If you are asked to invest in a deal that is not yet closed, record what has been agreed so far, record explicitly what has not, and put the cost of preparatory work in writing before you incur it.

What should you do when a verbal agreement is broken?

Start with a written notice of default, not with litigation. If the other party does not perform within the period set, it is in default, and your version of the deal is now on record in writing.

The notice of default (ingebrekestelling) is governed by article 6:82 of the Civil Code. It is a letter or email that states what was agreed and what has not been performed, and gives a reasonable period to put it right. Without that notice the debtor is generally not in default, and without default there is no claim to damages and no right to dissolve the contract. The notice also does something valuable in a verbal-agreement dispute: it forces the other party to respond to a written version of the deal. Its answer, or its silence, becomes evidence.

A notice is not needed in every case. Default arises by operation of law where a deadline agreed between the parties has passed, where the debtor has already stated that it will not perform, or where performance has become permanently impossible. If in doubt, send the notice anyway. Sending it costs little, while skipping it can cost you your claim.

Damages, dissolution or performance: what can you claim?

Once the debtor is in default, article 6:74 of the Civil Code entitles you as creditor to compensation for the loss caused by the breach. That loss can include lost profit, but only to the extent it can be attributed to the breach and substantiated with figures. In a verbal-agreement case this is where claims are usually trimmed, because the agreed volume or margin was never fixed on paper. Reasonable costs of establishing the loss and of obtaining payment out of court can be claimed alongside it.

The alternative to enforcing the deal is ending it. Article 6:265 of the Civil Code allows dissolution for any failure to perform, unless the failure is too minor to justify it. Dissolution creates obligations to reverse what has already been performed. Whether to claim performance, damages or dissolution is a strategic choice. It depends on what you still want from the other side and on what you can prove.

Which deadlines apply?

Deadlines are unforgiving. A claim to performance of a contractual obligation is time-barred five years after the day on which the claim became due, under article 3:307 of the Civil Code. A written reminder that unambiguously reserves the right to performance interrupts that period, under article 3:317. Long-running commercial relationships in which invoices are disputed and then left alone are the classic way to lose a claim by simply waiting.

Which court hears the case?

Where the amount at stake is below the statutory ceiling for the subdistrict court (kantonrechter), you can bring proceedings without a lawyer, and they are relatively quick. Our overview of small claims in the Netherlands explains that route. Above the ceiling the case goes to the district court (rechtbank), where representation by a lawyer is compulsory. Mediation is worth considering where the commercial relationship still has value, and arbitration only where the parties validly agreed to it in writing.

Is a verbal change to a written contract valid?

In principle, yes: a verbal amendment is as valid as the written contract it changes. A clause requiring written amendments makes such a change harder to prove and easier to resist, but does not always rule it out.

Because Dutch law is free of form requirements, a verbal amendment to a written contract is in principle as valid as the contract itself. Many commercial contracts try to close that door with a clause stating that amendments are only valid if agreed in writing and signed by both parties. Such a clause is useful and it shifts the argument, but it is not an absolute barrier. Whether a party may invoke it depends on the circumstances. A party that acted on the verbal change for a long period, accepted its benefit and never once referred to the clause may find that reliance on it is unacceptable.

Additional work is the same problem in a different guise. In construction and in professional services, extra work agreed on site is a standing source of litigation. The contractor that carried it out without written instruction has to prove both that it was requested and that a price or pricing basis was agreed. A short email before starting the extra work, rather than an invoice after finishing it, is the difference between a claim and an argument.

The same discipline applies to termination. A contract can be validly ended verbally, but the party that says it gave notice has to prove that it did, that the notice reached the other side, and when. Where a notice period runs from receipt, an unrecorded telephone call is exactly the kind of evidence that fails when it is needed most.

What should you check as the supplier or contractor relying on the deal?

You carry the burden of proof under article 150 Rv, so your task is to create evidence while the relationship is still good. Check these points on every verbal deal:

• Send a confirmation email the same day with scope, price, delivery date and payment term, and ask for a one-line reply.
• Attach your general terms to that email, so the other side had a real chance to read them (article 6:233 of the Civil Code).
• Check in the KVK trade register that the person you dealt with may represent the company.
• Confirm extra work in writing before you start it, not on the invoice afterwards.
• Describe the work on each invoice and chase unpaid invoices in writing, which also interrupts the five-year limitation period (article 3:317 of the Civil Code).

What should you check as the buyer or client receiving a confirmation?

In an ongoing relationship, silence after a written confirmation can count as acceptance. Check these points as soon as a confirmation or invoice arrives:

• Compare the confirmation with what you actually agreed and correct any error in writing straight away.
• Object explicitly to the supplier’s general terms if your own terms should apply (article 6:225 of the Civil Code).
• Complain about a defective delivery within a short, reasonable time, or you may lose the right to rely on the defect.
• Do not sign or pay invoices for extra work you never ordered without a written reservation.
• Remember that a non-compete clause, franchise agreement or arbitration clause agreed only verbally has no effect.

What can we do for you with a verbal agreement?

Our contract lawyers and corporate lawyers help businesses on both sides of a disputed deal:

• We reconstruct the agreement from your emails, chats, invoices and conduct and assess what you can prove.
• We draft a confirmation or amendment letter that records a verbal deal or change in writing.
• We draft the notice of default (ingebrekestelling) under article 6:82 of the Civil Code and set a reasonable deadline.
• We check whether your general terms apply and whether a written-form requirement was met.
• We send a letter that interrupts the five-year limitation period under article 3:317 of the Civil Code.
• We conduct proceedings before the subdistrict court or the district court, including a witness examination.

Summary

• A verbal agreement between businesses is binding under Dutch law (articles 3:37 and 6:217 of the Civil Code), unless the law requires writing for that type of contract.
• Writing is required for, among others, a home purchase by a private buyer, a non-compete clause, a franchise agreement, an arbitration agreement and the assignment of a claim.
• The party relying on the agreement must prove it (article 150 Rv); contemporaneous emails, invoices and conduct carry more weight than witnesses.
• When a verbal deal is broken, a written notice of default is usually the first step, and a claim to performance becomes time-barred after five years unless interrupted.
• Confirming every deal and every change in writing on the same day keeps the speed of a handshake without its risk.

Frequently asked questions