Termination and notice periods

Whether you can get out of a contract depends first on its duration. A contract for a fixed period generally cannot be ended early unless you agreed on that option, or the other party fails to meet its obligations. A contract for an indefinite period can usually be terminated, but Dutch case law may still require a notice period, a serious ground, or compensation under the requirements of reasonableness and fairness – the more the other party has invested in the relationship, the more is normally required.

Can you end a fixed-term contract early?

In most cases, no, not straight away. What matters first is whether there is a written agreement and what it says about ending it. Sometimes a statutory notice period applies even if you made no specific arrangements about this yourselves.

To work out what notice period applies, you first need to know whether the contract runs for a fixed or an indefinite period, and you need to give proper notice. Below we explain what a continuing performance agreement (duurovereenkomst) is, the difference between fixed-term and open-ended contracts, and the ways an agreement can be brought to an end.

What is a continuing performance agreement?

In a continuing performance agreement (duurovereenkomst), the parties commit to performing continuously, or repeatedly, over a longer period. Rental and employment contracts are common examples. A one-off contract, such as a purchase agreement, is different: performance happens once, not repeatedly.

Can unforeseen circumstances end a fixed-term contract?

If a contract runs for a fixed period, the start and end dates are clear from the outset, and in most cases it is not meant to be ended early. As a rule, you cannot terminate it unilaterally unless the contract itself allows this.

An exception can apply when circumstances arise that the parties did not foresee when they signed, and that they did not already take into account in the agreement itself. Under article 6:258 of the Dutch Civil Code (Burgerlijk Wetboek), a court may then amend or dissolve the agreement, but only if those circumstances are serious enough that the other party cannot reasonably be held to the contract as it stands. This route requires a request to the court; it is not something you can invoke unilaterally by simply informing the other party that the contract is over.

Can you terminate a contract for an indefinite period?

Yes. A continuing performance agreement for an indefinite period is, in principle, always terminable by giving notice.

In its Ronde Venen/Stedin judgment (ECLI:NL:HR:2011:BQ9854), the Dutch Supreme Court (Hoge Raad) set out the leading principles that apply when ending this type of agreement:

• If neither the law nor the agreement provides for a way to end it, the contract is, in principle, terminable at any time;
• The requirements of reasonableness and fairness may nonetheless mean that termination is only possible if there is a sufficiently serious ground for it;
• Those same requirements may also mean that a certain notice period must be observed, or that the notice must come with an offer to pay compensation.

Some types of contract, such as employment contracts and leases, have their own statutory notice periods; we cover these in separate publications on our website.

How do you check whether you can cancel an agreement?

Start with the agreement itself, and with any general terms and conditions that apply to it: these usually set out if and how you can bring it to an end. It is worth reading both documents closely, since the possibility to cancel is often tucked away in the general terms and conditions rather than in the main text of the contract. Termination in this everyday sense is only loosely regulated by law, so whether it is possible, and on what conditions, mostly depends on what the parties themselves agreed.

Can you end a contract by letter or e-mail?

Many contracts require termination in writing, and for some types of contract the law itself sets this written form requirement (schriftelijkheidsvereiste). Under article 6:227a of the Dutch Civil Code, an electronic message such as an e-mail can count as “in writing” in many situations. So if your contract only requires a written notice, rather than specifically a registered letter, sending an e-mail is generally sufficient.

Ending a contract by e-mail does have one practical drawback. Under the receipt rule (ontvangsttheorie), a notice only takes effect once it actually reaches the other party; sending it is not enough on its own. If you end an agreement by e-mail, you need to be able to show that it arrived, for example because the other party responded, or because you requested a read receipt or confirmation of receipt.

Before ending an existing agreement, check the general terms and conditions and the contract itself to see what they say about termination. If written notice is required, sending it by registered mail is the safer route, since a registered letter gives you proof of both sending and delivery. If you do use e-mail instead, make sure you can prove that the other party actually received it, and keep a copy of any confirmation you get.

In summary

• A fixed-term contract can usually not be ended early unless the contract allows it or unforeseen circumstances justify a court’s intervention under article 6:258 BW.
• A continuing performance agreement for an indefinite period can, in principle, always be terminated by giving notice.
• Reasonableness and fairness may still require a serious ground, a notice period, or compensation, depending on the case.
• Check the contract and any general terms and conditions first: they usually determine whether and how you can terminate.
• Where written notice is required, an e-mail can count as writing, but you need proof that it reached the other party.

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