A notice of default (ingebrekestelling) is a written demand that gives a contracting party who has failed to perform one final, reasonable period to put things right. Under Article 6:82 of the Dutch Civil Code (BW), the other party is in default only once that period has passed without performance, unless one of the exceptions in Article 6:83 BW applies, such as a fixed deadline that has already expired.
Default matters because it opens the door to your remedies. Without default, you normally cannot claim damages for late performance or dissolve the contract. A creditor who goes straight to court, or who terminates without first sending a proper notice, can lose on that point alone, however clear the breach was.
What must a notice of default contain?
A notice of default must be in writing and must give the other party a reasonable period to perform. In practice, a good notice covers four elements.
- The agreement and the specific obligation concerned.
- Exactly what has not been performed, or not performed properly.
- A reasonable period within which performance must still take place.
- A statement that the other party will be in default if that period passes without performance.
Article 6:82 paragraph 1 BW describes the notice as a written demand in which the debtor is given a reasonable period for performance. Default then arises when performance does not follow within that period.
An illustrative example of a notice of default
The text below is an illustrative example, not a standard form. Always adapt it to your contract and your facts.
Dear Sir or Madam,
On 3 March we entered into an agreement with you for the delivery and installation of a cooling system at our premises, to be completed by 1 June. To date, the installation has not been completed. The system has been delivered but has not been connected or tested.
We hereby give you notice of default. We request that you complete the installation and testing in full within 14 days of the date of this letter. If you fail to do so within that period, you will be in default by operation of law. We reserve all our rights, including the right to claim damages and to dissolve the agreement in whole or in part.
Yours faithfully,
Note what the example does. It names the agreement, describes the shortfall precisely, sets a concrete period and states the consequence. A vague demand (“please sort this out soon”) makes it harder to prove that default has arisen.
What is a reasonable period?
That depends on the nature of the obligation. A few days may be enough for a payment; a construction defect that needs materials and scheduling will need longer.
If the period you set is too short, the notice is not automatically worthless, but it creates uncertainty about when default actually began. You avoid that discussion by choosing a period that is clearly long enough for the work involved.
How should you send the notice?
Send it in a way that lets you prove receipt. Registered post, or email with a confirmation of receipt, are the usual options. If the other party disputes that the notice arrived, you as the creditor will have to prove it.
Keep a copy of the letter and of the proof of delivery with your file. If the matter later goes to court, these documents will be among the first things your lawyer needs.
When is a notice of default not required?
Article 6:83 BW lists three situations in which default arises without a notice.
- A fixed deadline has passed. If a period for performance was agreed and it expires without performance, default follows automatically, unless it appears that the period had a different purpose. Not every date in a contract is such a fatal deadline, so read the clause carefully.
- Unlawful act or damages. If the obligation is to pay compensation for an unlawful act, or is otherwise an obligation to pay damages, and it is not performed immediately.
- The other party says it will not perform. If you can infer from a statement by the debtor that it will fail to perform.
Article 6:82 paragraph 2 BW adds a variant. If the debtor is temporarily unable to perform, or it is clear from its attitude that a demand would be pointless, a written notice holding the debtor liable for the failure is enough. No period for performance needs to be given.
Relying on an exception is a calculated risk. If a court later disagrees, your claim or your dissolution may fail for want of default. Where there is doubt, sending a notice is the safer course.
What can you do once the other party is in default?
Once the period has expired without performance, you can claim damages for the delay, including statutory interest on money debts. Where the failure justifies it, you can also dissolve the contract in whole or in part, by written declaration or through the courts.
You can still demand performance as well. Dissolution is a choice, not an obligation. It also has consequences of its own: the parties must undo what has already been performed, which is not always practical or desirable. In many commercial situations, a properly served notice simply achieves what it was meant to achieve, which is performance.
In summary
- A notice of default is a written demand that gives the other party a reasonable final period to perform (Article 6:82 BW).
- Default, and with it the right to damages and dissolution, generally arises only once that period has passed.
- Article 6:83 BW lists the exceptions: an expired fixed deadline, an obligation from an unlawful act or to pay damages, and a statement that the debtor will not perform.
- Be specific about the shortfall, set a period that is clearly reasonable and make sure you can prove receipt.
- Where there is doubt about an exception, sending a notice is the safer course.
Frequently asked questions
Does a notice of default have to be in writing?
Yes. Article 6:82 BW requires a written demand. In practice you also need to be able to prove what you demanded and when it was received.
What if the other party responds but still does not perform?
A response alone does not stop the period running. If the period expires without proper performance, default has arisen, unless you agreed to extend the period in the meantime.
Can I claim interest from the due date of the invoice?
Between businesses, often yes. For a commercial agreement, Article 6:119a BW makes statutory commercial interest payable from the day after the agreed payment date. If no payment date was agreed, it runs by operation of law after 30 days, for example from receipt of the invoice. In other cases, interest generally runs from the moment of default, either after an expired fixed deadline or after a notice.
Can a notice of default come too late?
It can. Claims are subject to limitation periods, and in a sale the buyer must also complain within a reasonable time after discovering a defect. Waiting too long can cost you the claim entirely.
I have received a notice of default. What should I do?
Check whether the demand is justified and whether the period is realistic. If it is not, respond in writing, explain why and, where appropriate, propose a workable timetable. Do not simply ignore it: once the period expires, the other party may claim damages or dissolve the contract.
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