A supply agreement is a framework contract in which a supplier undertakes to deliver goods or services to a buyer on agreed terms over a period of time. Under Dutch law it comes into being through offer and acceptance (article 6:217 of the Dutch Civil Code), requires no particular form, and is governed by the general law of obligations in Book 6 of the Civil Code and, where goods are sold, by the sales rules in Book 7. Its practical function is to fix the specification, the price, the delivery windows and the consequences of failure while the relationship is still healthy.
What a supply agreement is under Dutch law
Dutch contract law starts from freedom of contract. Parties may agree what they like, in whatever form they like, and a supply agreement concluded by exchange of emails is as binding as one signed in a boardroom. There is no English-style consideration requirement and no general statutory duty to record a commercial contract in writing. What the law does require is that the parties intended to be legally bound and that the essential obligations are determinable.
That freedom is precisely why the written document matters. If the contract is silent, the default rules of the Civil Code fill the gap, and those defaults are rarely the allocation of risk a buyer or a supplier would have chosen. A written agreement is also your evidence. In a dispute the Dutch court is free in its assessment of evidence, and the party that can show a signed specification, a dated delivery schedule and a paper trail of complaints is in a materially stronger position than the party relying on recollection.
A framework, not a single purchase
Most supply agreements are duurovereenkomsten (continuing contracts): they create a lasting relationship rather than one exchange. Typically the agreement itself contains no purchase obligation at all, or only a minimum volume, and the individual deliveries are called off by purchase order. That two-layer structure works well, but only if the agreement states in terms that it prevails over anything printed on an order, an order confirmation or a delivery note. Without that clause, every order becomes a fresh negotiation about which terms apply.
It is also worth naming the contract type correctly. A supply agreement is not a commercial agency contract, and that distinction has teeth: an agent who negotiates or concludes contracts in the principal name enjoys mandatory statutory protection under articles 7:428 and following of the Civil Code, including notice periods and a goodwill payment on termination. A distributor who buys and resells in its own name has no such statutory regime, although Dutch case law on the termination of long-running contracts still limits how abruptly the relationship can be ended. Our overview of types of commercial agreements under Dutch law sets out where each contract type sits.
The clauses that decide who carries the risk
A supply agreement is read clause by clause when it goes wrong, so it pays to know which provisions actually shift risk and which are decoration. Four do most of the work: the specification, the payment terms, the delivery and risk provision, and the retention of title.
Specification and conformity
Article 7:17 of the Civil Code requires delivered goods to conform to the contract: the buyer may expect the properties needed for normal use, and for any particular use that was communicated, the properties that the buyer could reasonably expect on the basis of the agreement. The word that carries all the weight there is agreement. Whatever you write into the specification becomes the yardstick against which conformity is measured, and whatever you leave out is measured against a vague standard of normal use.
So make the specification objective and testable. Reference a recognised standard where one exists, name the tolerances, state the acceptance test and say who performs it, and record whether an approved sample or a first article is decisive. For services, the equivalent discipline is to define the deliverable and the response times rather than to promise best efforts, because an obligation to make an effort is very hard to breach and therefore very hard to enforce.
Price, payment terms and statutory commercial interest
Between businesses, payment terms are not entirely free. Under article 6:119a of the Civil Code the default payment term is thirty days after receipt of the invoice. Parties may agree a longer term, but a term of more than sixty days is only valid if it is not manifestly unfair to the creditor, and since 1 July 2022 a large company that buys from a small or medium-sized supplier cannot agree a term longer than thirty days at all: a longer term is void and a thirty-day term applies by operation of law.
Once payment is late, statutory commercial interest runs automatically, without a reminder and without a court order. The rate is not fixed in the Civil Code; it is derived from the European Central Bank refinancing rate and published by the Dutch government, and it changes twice a year, so state in the contract that the statutory commercial interest under article 6:119a applies rather than writing a percentage that will be out of date. Reasonable extrajudicial collection costs can be claimed on top, calculated under the statutory decree on such costs.
Price is the other half of this clause. In a multi-year supply relationship a fixed price is a bet on stable input costs. An indexation formula tied to a published index, or a raw material escalation clause with a defined threshold and a symmetrical downward adjustment, is far more robust than a right to renegotiate, which in practice only gives you a right to talk.
Delivery, transfer of risk and retention of title
Under article 7:10 of the Civil Code the risk in the goods passes to the buyer on delivery, even if ownership has not yet transferred. Incoterms 2020 are the usual shorthand for who arranges and pays for carriage, insurance and customs, and when risk moves, but they are contractual trade terms rather than law: name the rule and the named place precisely, and check that the rule you chose matches the transport you actually use.
For the supplier, the single most valuable clause is the retention of title of article 3:92 of the Civil Code. Ownership passes only when the price is paid, which means the supplier can reclaim unpaid goods from a buyer that stops paying or goes insolvent. Dutch law also allows an extended retention of title covering all claims from the supply relationship. It only works if it is agreed before or at the moment of delivery, if the goods remain identifiable, and if they have not been processed into a new thing, so the clause needs to be backed by practical measures such as batch marking and separate storage. A contractor or repairer that holds someone else goods may in addition have a right of retention under article 3:290 of the Civil Code.
General terms and conditions and the battle of forms
Most supply relationships in the Netherlands are fought out on the general terms and conditions rather than on the contract itself. Articles 6:231 and following of the Civil Code define general terms as clauses drafted for repeated use and not individually negotiated, and they attach two consequences that surprise foreign parties.
The first is the battle of forms. Article 6:225 paragraph 3 of the Civil Code applies a first shot rule: where an offer and an acceptance each refer to different sets of general terms, the terms referred to in the offer prevail, unless the second reference expressly rejects the first set. Rejecting the other side terms in the small print of your own is not enough; the rejection has to be explicit and made at the right moment. In practice this means the party that gets its terms in first, and expressly rejects any others, usually wins.
The second is the duty to make the terms available. Under articles 6:233 and 6:234 of the Civil Code the user of general terms must give the other party a reasonable opportunity to take note of them, in principle by handing them over or sending them before or at the time of contracting. Electronic provision is permitted where the contract is concluded electronically, or otherwise with the other party consent. If that duty is not met, the other party can annul the clause it dislikes, and a clause that is unreasonably onerous can be annulled in any event. There is an important carve-out: under article 6:235 a party that is itself large, measured by the obligation to publish annual accounts or by employing at least fifty people, cannot invoke these grounds. A small Dutch buyer often can.
The practical lesson is unglamorous. Attach the terms to the offer, refer to them in the order confirmation, keep proof of sending, and check whether your standard set contains anything a Dutch court would strike out. We set this out in more detail in our guide to drafting general terms and conditions.
What happens when the supplier is late or delivers the wrong goods
Dutch law does not let a buyer jump straight to damages. In most cases the supplier must first be in default (verzuim). Article 6:82 of the Civil Code requires a written notice of default giving a reasonable period for performance; only after that period expires without performance is the supplier in default and does the claim for damages under article 6:74 arise. The notice is not a formality to be skipped, and a claim has been lost more than once because the buyer complained loudly by telephone and never put a deadline in writing.
There is a shortcut worth building into the contract. Under article 6:83 of the Civil Code, default arises without notice where a deadline set in the contract passes without performance and that deadline was meant to be final. Agreeing an express fatal deadline (fatale termijn) for critical deliveries turns every missed date into an immediate default. The same effect can be produced by a penalty clause under articles 6:91 and following, which spares you the burden of proving loss, though a court retains the power under article 6:94 to reduce a penalty that is manifestly excessive and cannot be excluded.
Once the supplier is in default, the buyer has a menu. It may suspend its own payment obligation under article 6:262 of the Civil Code, claim damages, demand performance, or terminate the contract under article 6:265. Termination is available for any breach, but not where the breach, given its minor significance, does not justify it, which is why serious remedies deserve a written cure period and a defined threshold such as a stated number of late deliveries in a rolling period.
Two escape routes run the other way. Force majeure under article 6:75 of the Civil Code excuses a failure that cannot be attributed to the supplier, but it is a default rule that the contract can widen or narrow, so a force majeure clause that lists supplier failure, strikes at subcontractors or shortage of raw materials as excusing events materially changes the risk allocation. And under article 6:258 a court may amend or set aside a contract on the ground of unforeseen circumstances, though the threshold is high and the provision is not a general escape from a bad bargain.
How quickly must you complain about a defective delivery
Within a reasonable time (bekwame tijd) of discovering the defect, or of the moment you reasonably should have discovered it. Article 7:23 paragraph 1 of the Civil Code imposes that duty on a buyer of goods, and article 6:89 imposes the equivalent duty in every other contractual relationship, including the supply of services. Miss it and the buyer loses the right to rely on the non-conformity altogether, however serious the defect was.
What counts as a reasonable time is decided on the facts: the nature of the goods, whether the defect was visible on delivery, the effort an inspection would take and the harm the delay caused the supplier all feed into it. The fixed two-month period that people often quote applies only to a consumer buying a movable thing, not to commercial supply, so a professional buyer cannot assume it has two months to think about it. Perishable or time-critical goods can demand a complaint within days.
This is exactly why an inspection and acceptance clause is worth its space. Agree an inspection window, state that the goods are deemed accepted if no written complaint is made within it, and set out what happens on rejection: repair, replacement or credit, within a stated period, at the supplier cost and risk. That gives the supplier certainty and gives the buyer a clean procedural route rather than an argument about reasonableness.
A second deadline follows the first. Under article 7:23 paragraph 2 of the Civil Code the buyer claim becomes time-barred two years after the complaint was made, unless the limitation period is interrupted. Interruption is done by a written demand or notice under article 3:317 of the Civil Code, and a short registered letter reserving your rights costs nothing compared with a claim that expires unnoticed while the parties are still negotiating.
Ending a supply agreement without ending up in court
How a supply agreement ends depends on how its term was drafted. A fixed term simply expires, though an automatic renewal clause can quietly extend it for another full period if nobody serves notice, so diarise the notice date rather than the end date. A contract for an indefinite period can be terminated by notice, but here Dutch law is stricter than the contract text often suggests.
Where the agreement contains no notice provision, Supreme Court case law holds that a continuing contract for an indefinite period is in principle terminable, yet the requirements of reasonableness and fairness in article 6:248 of the Civil Code may mean that a sufficiently serious ground is needed, that a longer notice period must be observed, or that compensation must be offered. The factors that count are the length of the relationship, the investments the other party made at your request, its degree of economic dependence and the time it needs to find an alternative. A supplier that reorganised its production line for one buyer cannot be dismissed with a month notice.
Even with a notice clause, terminating in bad faith or at a moment calculated to cause maximum damage can be curtailed under the same article. The safer route is to write the exit into the contract: a defined notice period, an express right to terminate for cause after a written cure period, and wind-down obligations covering final call-offs, spare parts availability, return of tooling, data and stock, and confidentiality after the end. Those clauses look dull at signature and are the only ones anyone reads at the end.
Insolvency deserves its own line. If the supplier is declared bankrupt, article 37 of the Bankruptcy Act allows the buyer to demand that the trustee declare within a reasonable period whether the contract will be performed; if the trustee does not, it loses the right to demand performance. A retention of title that was properly agreed remains effective against the trustee, which is another reason to get that clause right at the start rather than after the first missed payment. Our note on contracting with Dutch parties covers the mistakes that most often surface at this stage.
Cross-border supply: applicable law, the Vienna Sales Convention and the court
The Netherlands is a re-export economy, and most supply agreements signed here cross at least one border. Three questions then have to be answered before any clause about goods matters: which law governs the contract, whether the Vienna Sales Convention applies on top of or instead of that law, and which court or tribunal decides.
Applicable law is determined by the Rome I Regulation (Regulation (EC) No 593/2008). A choice of law by the parties is respected. Without a choice, a contract for the sale of goods is governed by the law of the country where the seller has its habitual residence, and a contract for services by the law of the country where the service provider does, which means a Dutch buyer that never addressed the question is frequently contracting under foreign law.
The Vienna Sales Convention, better known as the CISG, is the trap most often missed. It applies automatically to international commercial sales of goods between parties established in different contracting states, and the Netherlands is a contracting state. Choosing Dutch law therefore brings in the CISG, not the Civil Code sales rules, unless the contract excludes it in so many words. That matters because the CISG has its own regime: it requires a fundamental breach before a contract can be avoided, it has its own notice requirements for non-conformity with a long-stop period of two years from handover, and it does not deal with retention of title or with the validity of penalty and exoneration clauses, which remain governed by national law. Exclude it or accept it deliberately, but do not leave it to chance.
Jurisdiction within the European Union follows the Brussels I bis Regulation (Regulation (EU) No 1215/2012). A written choice of court clause is in principle binding under article 25. Without one, the defendant can be sued in its own member state or, for contractual claims, at the place of delivery of the goods or of provision of the services. Arbitration is the alternative, governed for proceedings seated in the Netherlands by articles 1020 and following of the Code of Civil Procedure; the Netherlands Arbitration Institute is the usual institutional choice, and an arbitral award benefits from the New York Convention when enforcement abroad is likely. In purely domestic matters the subdistrict court (kantonrechter) handles smaller claims and the district court the rest.
Risk clauses that earn their place
Beyond the core terms, a handful of provisions repay the negotiating time they cost. Which of them you need depends on what you buy and where it comes from.
- Second-source and diversification. A clause permitting the buyer to source elsewhere without penalty when the supplier cannot deliver, is sanctioned, or misses agreed performance thresholds, turns a supply failure into a commercial inconvenience rather than a production stop.
- Sanctions and export control. European Union sanctions regulations apply directly in the Netherlands and override contractual obligations; the dual-use Regulation (EU) 2021/821 adds licensing duties for listed items. A clause allocating who obtains licences and what happens if a licence is refused avoids a stalemate in which neither party can lawfully perform.
- Liability caps. Caps and exclusions are valid in principle in commercial contracts, but a court can set one aside under article 6:248 paragraph 2 of the Civil Code, in particular where the loss was caused by intent or deliberate recklessness on the part of the supplier or its senior management. Write a cap you can defend: proportionate to the contract value, with carve-outs for confidentiality and third-party intellectual property claims.
- Data and confidentiality. If the supplier processes personal data on your behalf, article 28 of the General Data Protection Regulation requires a written processor agreement, and a supply contract that ignores it is incomplete as a matter of law.
- Supply chain due diligence. Larger companies should follow the Corporate Sustainability Due Diligence Directive as amended in 2026, which member states must transpose by 26 July 2028 and which applies from 26 July 2029. The amended version dropped the harmonised civil liability regime and set the ceiling for penalties at three per cent, but the due diligence duties will still be passed down the chain through contract clauses, so it is sensible to agree now who bears the cost of the information requests that are coming.
What to check before you sign
Due diligence on a supply counterparty in the Netherlands is quick and cheap, and skipping it is the most expensive shortcut in commercial practice. An extract from the Commercial Register at the Chamber of Commerce shows who is authorised to represent the company and with what restrictions, which matters because a contract signed by someone without authority binds nobody until it is ratified. Filed annual accounts give a first view of solvency, and they also tell you whether the counterparty is large enough to be shut out of the protection of article 6:235 of the Civil Code.
Then work through the document itself. Does the specification describe something you could test in a laboratory or only something you could argue about? Do the payment terms comply with the statutory maxima? Is the retention of title agreed before delivery and workable in your warehouse? Is there a written notice regime, a defined cure period and a fatal deadline for critical dates? Is the CISG expressly excluded or expressly accepted? Does the exit clause cover spare parts, tooling and data as well as the last invoice?
Negotiation is easier once those questions have answers, because you are no longer trading positions but allocating identified risks. A buyer that offers a longer commitment or a larger volume in exchange for a firmer delivery guarantee is negotiating; a buyer that simply asks for a lower price is haggling. The first produces a contract that survives its first crisis. Further background on the Dutch civil law framework is collected in our civil law guides.
Frequently asked questions
Three questions come up in almost every supply negotiation. The short answers below apply to commercial contracts governed by Dutch law.
What makes a supply agreement legally binding?
A supply agreement becomes legally binding the moment it ticks all the boxes of a valid contract. Under Dutch law that means an offer and a matching acceptance, as set out in article 6:217 of the Dutch Civil Code. There is no English-style consideration requirement, and a commercial supply contract does not have to be in writing to be valid.
Crucially, both parties must intend to create a legal relationship, and the terms need to be clear and certain. The final step is getting it signed by authorised representatives from both companies. That signature is what turns the document into a properly enforceable framework.
How is a supply agreement different from a purchase order?
It’s really a question of scope and timescale. Think of a purchase order (PO) as a one-off instruction. It’s used for a single transaction and specifies exactly what’s being bought, how much it costs, and when it needs to be delivered for that specific order.
A supply agreement, on the other hand, is the long-term game plan. It’s the framework that governs an ongoing business relationship, setting out the rules for many future purchases over a set period. It covers things like pricing models, quality standards, and delivery protocols that apply to every purchase order placed under it. Say in the framework agreement that it prevails over anything printed on an order or an order confirmation, otherwise you invite a battle of forms.
In short, the supply agreement is the master blueprint for the entire relationship. Individual purchase orders are just the work orders for each specific job carried out under that blueprint.
Can a supply agreement be changed after it is signed?
Yes, absolutely—but you have to do it by the book. Any changes, which are usually called amendments or addendums, must be agreed upon in writing by both parties to be valid.
This written record then needs to be signed by authorised people from each organisation. Under Dutch law an amendment agreed by email, or even orally, can be binding, unless the contract itself requires a signed written amendment. Even then, a party that has consistently acted on an informal change may be unable to fall back on the formality. A formal, signed amendment is the only way to make sure any changes are crystal clear and, most importantly, enforceable.
Law & More advises Dutch and international businesses on supply and distribution contracts: drafting and reviewing the agreement and the general terms, checking payment terms and retention of title against Dutch law, and acting when deliveries fail or a long-standing relationship is terminated. If you are preparing a supply agreement, or a counterparty has just missed a deadline that matters, contact our contract lawyers to discuss your position.
