What to check before you sign a contract

Sign A Contract: Avoid Hidden Legal Issues

A contract under Dutch law is formed by offer and acceptance, with no particular form required: an agreement reached by email, or even orally, binds you. What matters is not whether it carries a signature, but whether the other party could reasonably infer your assent from your words or conduct. The moment to be careful is therefore well before the signature block.

Is the person you are dealing with authorised to sign?

Start here: everything else is worthless if the answer is no. Check the Dutch commercial register (KVK) for who may represent the company, and whether that authority is limited to a certain amount or requires a second signature. If the signatory lacks authority, the company is in principle not bound – unless it created the appearance that authority existed, which is a fact-specific argument you would rather not have to run.

Whose general terms and conditions apply?

If both parties refer to their own conditions, Dutch law gives priority to the set referred to first, unless the second party expressly rejects the first (the “battle of forms”, article 6:225(3) of the Dutch Civil Code). A clause buried in an email footer stating that your conditions apply is not an express rejection. Settle this point in the contract itself rather than leaving it to the correspondence.

Check what the applicable conditions say about liability, delivery periods and termination, and confirm they were actually provided before the contract was concluded: conditions that were not made available to the other party can be annulled.

Which clauses tend to decide a dispute?

Five come up again and again: the description of what is to be delivered, specific enough that an outsider could tell whether it was done; the price, and whether it can be adjusted; duration and termination, including automatic renewal and notice periods, where long-term commitments often hide; the limitation of liability, including whether it excludes consequential loss and whether the cap is realistic against the value at risk; and the dispute clause, naming the competent court or arbitral tribunal and the governing law.

A penalty clause deserves separate thought. It turns a loss that would be hard to prove into a fixed sum, often the only practical remedy for a breach of confidentiality or a non-compete. A Dutch court can moderate a penalty that is manifestly excessive (article 6:94 of the Dutch Civil Code), so a proportionate figure serves you better than a punitive one.

What if something was agreed but never written down?

Dutch contracts are interpreted not only by their wording but by what the parties could reasonably expect of one another in the circumstances; reasonableness and fairness (redelijkheid en billijkheid, article 6:248 of the Dutch Civil Code) can supplement or limit what was agreed. Pre-contractual statements, brochures and emails therefore matter, which cuts both ways: keep them, and be careful what you promise in them.

What should you check right before you sign?

Confirm that the version you are signing is the version you negotiated, that every annex referred to is attached, that the parties are correctly named with their registration numbers, and that anything agreed verbally has been written in. Keep a complete signed copy with its annexes: a dispute two years later is decided on the document, not on recollection.

In summary

  • A contract can bind you before it is signed, so check authority, terms and key clauses in good time.
  • Confirm who may represent the other party and whether their authority is limited.
  • Settle whose general terms apply in the contract itself, and check they were actually provided to you.
  • Give the description, price, duration, liability and dispute clause specific attention: these decide most disputes.
  • Before signing, check the version, the annexes and the named parties, and keep a signed copy.

Unsure where you stand? Tell us about your situation. We will let you know your options within one working day.

How Law & More can help you with this is explained on our corporate lawyer page.

Ruby van Kersbergen
Ruby van Kersbergen is an attorney-at-law at Law & More in Eindhoven and Amsterdam. She specialises in contract law, corporate law and corporate legal services, and also works in migration law.

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This article provides general information and is not a substitute for advice on your specific situation.

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