A notice of default, the ingebrekestelling, is a written demand giving a contracting party who has failed to perform a final reasonable period in which to put things right. Its purpose is not politeness but law: under Article 6:82 of the Dutch Civil Code the debtor is generally not in default until such a notice has been given and the period stated in it has expired, and without default there is normally no right to dissolve the contract or to claim damages.
That is why the letter matters more than its length suggests. A creditor who goes straight to court, or who terminates a contract without ever having sent a proper notice, regularly loses on that point alone, however plainly the other party was in breach.
What must a notice of default contain?
Four elements. It should identify the agreement and the obligation concerned; state specifically what has not been performed, or not properly performed; give a reasonable period within which performance must still take place; and state that the debtor will be in default if that period passes without performance.
What counts as a reasonable period depends on the nature of the obligation. A few days may suffice for a payment; a construction defect that requires materials and scheduling will need longer. A period that is plainly too short does not invalidate the notice, but it is treated as extended to a period that is reasonable, which leaves the creditor uncertain about when default actually began – an uncertainty easily avoided by being generous.
Send the notice in a way that lets you prove receipt: registered post, or email with confirmation of receipt. The burden of proving that the notice arrived rests on the creditor.
When is a notice of default not required?
Article 6:83 of the Civil Code sets out situations in which default arises without notice. The most important is a fixed deadline: where the contract sets a period for performance and that period passes without performance, default follows automatically. It also applies where the obligation arises from an unlawful act or from an obligation to pay damages, and where the debtor has made clear – expressly or by conduct – that it will not perform.
The list is not exhaustive, and reasonableness and fairness can produce the same result in other circumstances. But relying on one of these exceptions is a calculated risk: if a court later disagrees, the dissolution or the claim fails for want of default. Where there is any doubt, sending a notice costs nothing.
What comes after the notice?
If the period expires without performance, the debtor is in default. From that moment the creditor can claim damages for the delay, including statutory interest on money debts, and can dissolve the contract in whole or in part – by written declaration or through the courts – where the failure justifies it. Performance can still be demanded as well; dissolution is a choice, not an obligation.
Dissolution 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 of default achieves what it was meant to achieve, which is performance.
Frequently asked questions
Does a notice of default have to be in writing?
Yes. The law requires a written demand, and 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 does not interrupt the period. Once it has expired without proper performance, default has arisen, whatever was said in the meantime.
Can I claim interest from the date of the invoice?
Where the contract sets a payment term, that term is a fixed deadline and default follows automatically on its expiry, so interest runs from then. Without an agreed term, interest runs from default following a notice.
Can a notice of default be too late?
It can. Claims are subject to limitation periods, and in sales the buyer must also complain within a reasonable time of discovering a defect. Waiting can cost the claim entirely.
Advice on a notice of default
Whether you are drafting a notice or have received one, the value is in the detail: what exactly is being demanded, whether the period is reasonable, and whether default has in fact arisen. Our lawyers draft notices, assess those received, and act in the proceedings that sometimes follow. Please contact Law & More if you would like your situation reviewed.
