Types of commercial agreements under Dutch law: rules and clauses

A commercial contract under Dutch law is any agreement between businesses about the supply of goods, services, rights or capital. It comes into being through offer and acceptance under article 6:217 of the Dutch Civil Code, with no requirement of writing, signature, seal or consideration. Dutch law then limits that freedom in places that catch parties out: an agreement that was never signed can still bind you, a clause that reads perfectly can be set aside as unacceptable, and a choice of English law does not switch off Dutch mandatory rules. This page sets out what makes a commercial contract valid, which clauses do the work, what happens when the other side fails to perform, what changes when the deal crosses a border, and which of the types of commercial agreements fits which situation.

When is a commercial contract valid

A contract comes into being through offer and acceptance, under article 6:217 of the Dutch Civil Code. Nothing more is needed. There is no requirement of writing, no signature requirement, no seal, and no consideration in the English-law sense. In business this is more often a risk than a convenience, because it means a deal can close in an exchange of messages that neither side thought was final.

What counts is the declared intention. Articles 3:33 and 3:35 of the Civil Code tie the two together: a contract requires an intention matched by a declaration, but a party who reasonably relied on what the other appeared to declare can hold that other to it. So the question in practice is rarely “what did you mean”. It is “what could the other side reasonably take you to mean”.

Defects in consent

Even a validly formed contract can be annulled where consent was defective.

• Mistake (dwaling, article 6:228 of the Civil Code). The contract was entered into on a wrong picture of the facts, and the other party caused that picture, or knew of it and should have corrected it, or was under the same misapprehension. The mistake has to concern the present, not a disappointed expectation about the future.
• Fraud, duress and abuse of circumstances (article 3:44 of the Civil Code). Fraud is a deliberate misrepresentation or concealment; duress is unlawful pressure; abuse of circumstances is exploiting a state of dependency, inexperience or distress.

The consequence differs from nullity: the contract is voidable, so it stands until it is annulled, and the right to annul is subject to a limitation period. Where a deal has been performed for years, a mistake claim usually fails on that ground alone rather than on the merits.

Who may sign

Signing by someone without authority is the most common and most expensive formation error in B2B practice. Three checks cover almost all of it.

• The trade register. The Chamber of Commerce extract shows who the directors are and whether their authority is sole or joint, and whether it is limited by amount. A jointly authorised director signing alone does not bind the company.
• The power of attorney. Where the signatory is not a director, ask for the written authority and check its scope and date. Articles 3:60 and following of the Civil Code govern agency of this kind.
• Apparent authority. Article 3:61 of the Civil Code can bind a company even where authority was lacking, if the counterparty reasonably relied on an appearance of authority created by the company itself. That protects the diligent counterparty; it is not something to rely on deliberately.

For decisions of a certain weight the articles of association may require a board or shareholder resolution. Ask for it rather than assume it.

Form, notarial deeds and signatures

Most commercial contracts are form-free. The exceptions matter: transfer of registered property, the transfer of shares in a BV or NV, and a number of family and succession instruments require a notarial deed, and an agreement that skips the required form is void rather than merely unenforceable.

Electronic signatures are governed by the eIDAS Regulation together with article 3:15a of the Civil Code. A simple electronic signature is not without value, but a qualified electronic signature is equated with a handwritten one, and the difference shows up when authenticity is disputed. For routine commercial contracts an advanced signature through a reputable platform is normally proportionate; for anything that has to survive a hostile challenge, take the qualified route.

Legal capacity is the remaining formation requirement. Contracts with minors and with adults under protective measures can be annulled by the representative, which is rarely an issue in B2B but occasionally becomes one with sole traders.

Freedom of contract, good faith and mandatory law

Freedom of contract is the starting point, and Dutch law then runs three correctives across it.

Reasonableness and fairness

Article 6:248 of the Civil Code gives good faith — redelijkheid en billijkheid — two functions. It supplements the contract, filling gaps the parties did not address. And it restricts: a rule that would apply under the contract does not apply if, in the circumstances, that would be unacceptable by standards of reasonableness and fairness. The threshold for the restrictive function is deliberately high; “unfair” is not enough, and Dutch courts are markedly more reluctant here in a B2B relationship between professional parties than in a consumer setting. But this is the reason a clause that reads impeccably can still fail, and it is what a foreign counsel reading a Dutch contract most often misses.

Interpretation

Dutch courts do not read a contract purely by the dictionary. Since the Supreme Court’s Haviltex judgment the question is what meaning the parties could reasonably attribute to the wording in the circumstances, and what they could reasonably expect of each other. The negotiation record, the parties’ sophistication and whether they were advised all feed in. Between professional parties advised by lawyers, and particularly where the contract contains an entire-agreement clause, the wording carries more weight; it never carries all of it.

Mandatory law

Some rules cannot be contracted around. In commercial practice the ones that bite are the agency provisions, the general terms and conditions regime, competition law, and rules protecting the weaker party in specific contract types. A clause that conflicts with a mandatory rule is void on that point.

Severability

That is what the severability clause is for. Without one, article 3:41 of the Civil Code decides whether a void provision drags the rest of the contract with it, by asking whether the remainder is inseparably connected to it. A severability clause that also says what should happen instead — that the parties will replace the void provision with a valid one approaching its intended effect — is considerably more useful than the bare version that only says the rest survives.

Essential clauses in a commercial contract

The clauses below are the ones that decide outcomes. Each is given with the Dutch term, because that is what the other side’s counsel will use.

Two of these deserve emphasis because they are usually treated as employment or IT topics and then forgotten in a commercial contract. A non-solicitation clause between businesses is the only protection against a counterparty hiring away the team it has been working with. And where one party processes personal data on the other’s instructions — a supplier running a mailing, a platform hosting customer records — a processing agreement is not optional.

The commercial contract and the general terms and conditions

What goes in the contract and what goes in the general terms is a real question, not a matter of habit, because Dutch law treats general terms and conditions under their own regime in Book 6 of the Civil Code, in the section on algemene voorwaarden.

Three consequences follow. First, a term in general conditions can be annulled if it is unreasonably onerous, which is a lower threshold than the one applying to individually negotiated clauses. Second, the user of the terms has a duty to make them available before or at the time of contracting; failing that, the terms can be annulled for that reason alone, and pointing at a website is not always enough. Third, the protection is not open to everyone: a large counterparty, defined by criteria of size and reporting obligations, cannot invoke it, which is why the regime matters most in contracts with smaller businesses.

Then there is the battle of the forms. Where both parties refer to their own conditions, article 6:225 of the Civil Code gives the first set priority, unless the second party explicitly rejects the first — explicitly, and not by way of a standard clause in its own conditions. Whoever wants their own terms to apply has to say so expressly, in the acceptance itself.

The practical rule: anything the parties actually negotiated belongs in the contract, and anything standard belongs in the conditions. A term that is central to the bargain is safer in the contract, where the unreasonably-onerous test does not reach it.

Oral and informal agreements

An oral agreement is as binding as a written one, save where a form requirement applies. The problem is not validity but proof, and Dutch civil procedure leaves the burden with the party asserting the agreement.

In practice that party is rarely without material. A WhatsApp exchange, an email confirming what was discussed, an unpaid but unchallenged invoice, a delivery accepted without protest, a note of a call sent to the other side the same day: individually thin, together often decisive. The pattern that persuades a court is contemporaneous, consistent and not created for the dispute. Witness evidence is admissible and a party may be heard as a witness, though a party’s own statement carries limited weight where they bear the burden of proof.

The practical advice is unglamorous and works. After an oral agreement, send a short confirmation of what was agreed and ask the other party to confirm. Silence in the face of such a message is not acceptance in law, but a court will notice it, and the message itself becomes evidence of what was discussed and when.

One more point that comes up in international dealings: a contract in English between Dutch parties is valid, and so is a contract in Dutch between a Dutch and a foreign party. Language does not affect validity. It does affect interpretation, because English legal terms carry meanings from a system that does not apply, and a term like “best efforts” or “consequential loss” will be read as a Dutch court reads it, not as an English one would.

Negotiating: the pre-contractual phase and breaking off talks

Negotiation is not a legal vacuum. From the moment parties enter into negotiations they stand in a relationship governed by good faith, and that has consequences for what each may do and what it costs to walk away.

Dutch case law works with a sequence. In the earliest phase either party may break off freely and bears its own costs. As negotiations progress, breaking off can become such that the party doing so must compensate the other’s costs. And in the final phase, where the other party could justifiably assume that some contract would result, breaking off may be unacceptable altogether, exposing the party to a claim for damages that can extend to lost profit, or to an order to continue negotiating.

The threshold is high, and deliberately so. The Supreme Court has held that the standard for finding that breaking off is impermissible is strict, and that a court must exercise restraint: the starting point is that a party may break off, and it is for the disappointed party to establish that its reliance on a contract materialising was justified, taking into account how the negotiations ran and whether the other side contributed to that reliance. Circumstances that have counted include agreement on all essential points, a jointly drafted final version, and the counterparty encouraging the other to incur costs.

The practical answer is not to argue about this afterwards. A short letter of intent that says in terms that no party is bound until a signed contract exists, that each bears its own costs, and that either may withdraw at any time, removes almost the entire risk. Where exclusivity is granted or one party is asked to invest during the talks, the letter should say what happens to those costs if the deal does not close.

The case law on this, what can actually be claimed and how a reservation keeps the question from arising are set out on our page about breaking off negotiations under Dutch law.

When the other side does not perform

The notice of default

This is the step most often skipped, and skipping it defeats otherwise sound claims. As a rule, remedies for non-performance require that the debtor is in default (verzuim), and default normally arises only after a written notice giving a reasonable period for performance: the ingebrekestelling, under articles 6:82 and 6:83 of the Civil Code. There are exceptions — where performance has become permanently impossible, where a fixed deadline has passed, or where the debtor makes clear it will not perform — but they are exceptions, and relying on one is a decision to be made consciously.

A usable notice states what was agreed, what has not been done, what is required, and by when, with the period long enough to be reasonable in the circumstances. Send it in a way that proves receipt.

The remedies

• Performance. Claim the contract be carried out, if necessary through the court with a penalty for non-compliance.
• Suspension (opschorting, article 6:52 of the Civil Code). Withhold your own performance while the other party is in breach — effective, and the pressure often resolves the matter, but suspending without grounds puts you in breach.
• Termination (ontbinding, article 6:265 of the Civil Code). Any failure gives a right to terminate unless the failure, given its minor significance, does not justify it. Termination unwinds the contract and creates restitution obligations; it does not exclude damages.
• Damages (article 6:74 of the Civil Code). Compensation for loss caused by the breach, subject to attribution and to the causation and reasonable-attribution rules, and to any contractual cap.

Unforeseen circumstances

Where circumstances change so fundamentally that the other party cannot reasonably expect the contract to be maintained unchanged, article 6:258 of the Civil Code allows a court to modify or set aside the contract. This is not a route around a bad bargain: the threshold is high, and circumstances the contract already allocated — which is what a well-drafted force majeure or price-adjustment clause does — are not unforeseen for this purpose. Energy price shocks and pandemic disruption produced a run of case law on it, with mixed outcomes that turned largely on what the contracts themselves had provided for.

International commercial contracts

Choice of law, and its limits

Within the EU the Rome I Regulation governs which law applies. Parties may choose, and that choice is respected. Two limits are regularly overlooked. Overriding mandatory provisions of the forum apply regardless of the chosen law. And where all the elements of the situation are located in one country, the choice of another country’s law cannot set aside that country’s mandatory rules. Choosing English or Swiss law for a contract between two Dutch companies performed in the Netherlands therefore achieves considerably less than it appears to.

Absent a choice, Rome I assigns the law by contract type — broadly, the law of the country of the party performing the characteristic obligation.

Which forum, and arbitration

Jurisdiction within the EU follows the Brussels I bis Regulation, which upholds a forum clause. The choice between the state courts and arbitration is a real one. Arbitration offers confidentiality, arbitrators with sector knowledge and, through the New York Convention, enforcement in a very large number of countries, which is its decisive advantage where the counterparty’s assets are outside Europe. Against that it is expensive, there is effectively no appeal, and interim relief may still require a court. Mediation is a third route and works where the commercial relationship is worth preserving; it is not a substitute for a binding decision. Whichever is chosen, the clause has to be unambiguous: seat, language, institution and rules, or the courts of a named place, and not two routes at once.

Incoterms and the passing of risk

In cross-border sales the delivery term decides who bears the transport risk and who pays which costs, and the ICC Incoterms are the standard shorthand. EXW puts nearly everything on the buyer from the seller’s premises; FOB puts risk on the buyer once goods are on board at the named port; DDP puts nearly everything on the seller through to delivery at destination. Two rules of use: always state the Incoterm with the named place and the version year, and check that it matches what the contract says about transfer of title, because the two are separate questions and a mismatch is where disputes start.

Currency, price and payment

A contract running over time in a foreign currency carries a price risk that has nothing to do with performance. Deal with it explicitly: name the currency of payment, say who bears conversion costs, and consider an adjustment mechanism or a hedging obligation for long-term supply. Advance payments, deposits and payment guarantees allocate the credit risk in the same way; a bank guarantee or a letter of credit is worth its cost where the counterparty is unknown or in a jurisdiction where enforcement is slow.

The Vienna Sales Convention (CISG)

For the international sale of goods between businesses in contracting states, the CISG applies automatically unless it is excluded. This surprises parties regularly: a Dutch supplier and a German buyer who choose Dutch law get the CISG, because it forms part of Dutch law for such sales. It is a workable regime and in some respects more supplier-friendly than the Civil Code, particularly on the buyer’s duty to examine and notify within a short period. The decision to keep it or exclude it should be taken deliberately, and stated in the contract either way.

Which of the types of commercial agreements do you need

The rules above apply to every commercial contract. What changes from deal to deal is the statutory regime that sits underneath it. Dutch law regulates some contract types in detail in Book 7 of the Civil Code and leaves others almost entirely to the parties, and that difference decides how much drafting work a deal needs. The sections below cover the seven types of commercial agreements that Dutch businesses meet most often, with the mandatory rules that apply to each and the clauses that decide the outcome when the relationship goes wrong.

Sales and purchase agreements

A sale of goods between businesses is a koopovereenkomst under article 7:1 of the Civil Code: one party undertakes to deliver a thing and the other to pay a price. No form is required, so a purchase order and an order confirmation are enough to create one. The regime that follows is largely non-mandatory in a business-to-business setting, which means the contract and the general terms decide most questions and the Civil Code only fills the gaps.

Two provisions carry most of the weight. Article 7:17 of the Civil Code requires the goods to conform to the contract, meaning they must have the properties the buyer could expect given the nature of the goods and the statements made about them. And under article 7:23 of the Civil Code the buyer loses the right to complain if it does not notify the seller within a reasonable time after discovering, or after it should reasonably have discovered, the defect. The fixed two-month period that is often quoted applies only to consumer sales of movable property; between businesses the standard is the open one of a reasonable time, and how long that is depends on the goods and the trade. Suppliers routinely shorten it in their general terms, and buyers who inspect late lose good claims on this point alone.

Three clauses deserve deliberate attention. Retention of title, eigendomsvoorbehoud under article 3:92 of the Civil Code, keeps ownership with the seller until payment and is the only protection that survives the buyer’s insolvency; it has to be agreed before delivery, not invoiced afterwards. The passing of risk should be stated expressly, using an Incoterm with the named place and version year, and checked against what the contract says about transfer of title, because those are separate questions. Finally, set out the payment term, the consequences of late payment and whether statutory commercial interest applies, so that a debt collection file does not start with an argument about the rate.

Service agreements

Where the deal is about work rather than goods, Dutch law offers two regimes and the difference matters. A contract to perform services other than the creation of a tangible work is an overeenkomst van opdracht under article 7:400 of the Civil Code; a contract to build or make something tangible for a price is aanneming van werk under article 7:750 of the Civil Code. Consultancy, IT support, marketing and interim management fall in the first category; construction and bespoke manufacturing in the second.

Under article 7:401 of the Civil Code the service provider owes the care of a good contractor. That is an obligation of effort, not of result, unless the contract says otherwise, which is why a client who wants a guaranteed outcome has to write it in. Article 7:408 of the Civil Code lets the client terminate the engagement at any time, a rule that surprises providers who assumed a fixed term was fixed; between professional parties it can be departed from, so a minimum term or a cancellation fee needs to be agreed expressly.

The real exposure in service contracts is the classification of the relationship. If the provider works personally, is paid and works under the authority of the client, the arrangement can qualify as an employment contract under article 7:610 of the Civil Code regardless of what the parties called it, with retroactive wage tax, social security contributions and dismissal protection as the consequence. The tax authorities ended their enforcement moratorium on false self-employment on 1 January 2025, and a statutory presumption of employment below an hourly rate to be set has been adopted but will only enter into force by royal decree. Until then the existing case law on the nature of the relationship applies. Keep the scope of work objective, avoid instructions about how and when the work is done, and record substitution rights in writing.

Two further clauses decide the value of the contract. Intellectual property does not transfer because an invoice was paid: under Dutch law the assignment of copyright requires a deed, so a service agreement that is silent leaves the client with at most a licence. And the liability cap, the notification period for claims and the exclusion of consequential loss are the provisions a professional adviser will insist on, so a client should test them against the size of the risk rather than accept them as standard.

Non-disclosure agreements

A non-disclosure agreement is a contract that restricts what the recipient may do with information it receives. Dutch law does not regulate the NDA as a contract type, so its content is entirely a matter of drafting, but it does not stand alone either. The Wet bescherming bedrijfsgeheimen, which implements the EU Trade Secrets Directive, gives independent protection to information that is secret, has commercial value because it is secret, and has been subject to reasonable steps to keep it secret. That last requirement is why the NDA matters even when it is never enforced: without it, the steps to keep the information secret are hard to demonstrate and the statutory protection falls away with them.

A workable NDA defines the confidential information by category rather than by listing documents, states the permitted purpose, names the group that may receive the information, and sets a duration that reflects how long the information stays valuable. Sign it before the first disclosure; an NDA signed after the data room opened protects nothing that was already shared. Where the parties are exploring a transaction, add a non-solicitation clause covering staff and customers, because that is the risk an NDA on its own does not cover.

Enforcement is the weak point. Proving loss from a leak is difficult, which is why a contractual penalty is standard. Under articles 6:91 and following of the Civil Code a penalty clause replaces damages unless the contract says it is cumulative, and article 6:94 of the Civil Code allows the court to reduce a penalty where its application would be manifestly unfair. Draft the penalty per breach and per day of continuation, keep the amount proportionate to the interest protected, and state expressly that the right to claim performance and additional damages is preserved.

Supply and distribution agreements

Distribution and supply agreements are not regulated as a contract type in the Civil Code, which makes them the free-form deals in this list, with one large exception and one large constraint.

The exception is commercial agency. A distributor buys and resells for its own account and risk; a commercial agent negotiates or concludes contracts in the name of the principal and is paid commission. Agency is governed by articles 7:428 and following of the Civil Code, and much of that regime is mandatory. It sets statutory notice periods that increase with the length of the relationship, and it gives the agent a claim to a customer indemnity on termination where the agent brought in customers from whom the principal continues to benefit, capped at one year’s average remuneration. Parties regularly describe a relationship as distribution when in substance it is agency; the label in the contract does not decide the question, and the correction usually arrives with the termination letter.

The constraint is competition law. A vertical agreement between supplier and distributor falls under article 101 of the Treaty on the Functioning of the EU and the equivalent Dutch prohibition. Regulation (EU) 2022/720, the vertical block exemption that has applied since 1 June 2022, exempts most of these arrangements provided that neither party holds more than a thirty per cent share of the relevant market and that the agreement contains no hardcore restriction. Fixing the distributor’s resale price is such a restriction, as is shielding an exclusive territory absolutely by banning passive sales into it. A clause of that kind is void and can attract a fine, so exclusivity has to be built with active-sales restrictions rather than a blanket ban.

Beyond that, the clauses that decide disputes are minimum purchase obligations, the notice period, and what happens to stock, spare parts and customer data at the end. Dutch case law treats a long-standing distribution relationship as terminable, but the required notice can be considerably longer than the contract states where the distributor made investments in reliance on it, so a short notice period without a compensation mechanism gives less certainty than it appears to.

Partnership, joint venture and shareholder agreements

Where two or more parties combine resources, the contract has to do something the other types do not: it has to govern a relationship in which the parties are on the same side until they are not. Dutch practice uses three instruments. A samenwerkingsovereenkomst or joint venture agreement regulates a collaboration without a new entity or alongside one. A partnership in the strict sense, a vennootschap onder firma or maatschap, creates joint liability of the partners for the debts of the business, which is the single most important reason to choose an entity instead. A shareholders’ agreement regulates the relationship between the owners of a BV alongside its articles of association. The choice between them is set out in more detail in our page on cooperation agreements.

The division of labour between the articles and the shareholders’ agreement is the point most often missed. The articles are public, bind everyone including a future shareholder, and are amended by notarial deed. The shareholders’ agreement is private, binds only the parties to it, and breach of it produces a claim for damages or a penalty rather than an invalid corporate decision. Anything that must work against a third party who acquires shares therefore belongs in the articles: the transfer restriction, the share classes, the special voting or appointment rights. Anything commercial, from the business plan to the dividend policy, belongs in the agreement. Note also that the transfer of shares in a BV requires a notarial deed under article 2:196 of the Civil Code, so a share transfer promised in a private agreement still needs the notary to take effect.

The clauses that matter are the exit clauses, because the value of a minority stake in a private company depends entirely on them. Set out drag-along and tag-along rights, a valuation method with a named independent valuer, good leaver and bad leaver definitions, and a deadlock mechanism that actually ends the deadlock rather than referring the parties to further consultation. Where the relationship breaks down anyway, Dutch corporate law provides the statutory buy-out and withdrawal proceedings and the inquiry procedure before the Enterprise Chamber (Ondernemingskamer); those rules were overhauled by the Act on amendment of the dispute resolution and inquiry procedures, in force since 1 January 2025. Our corporate law guides set out how those proceedings run.

Franchise agreements

Franchise is the one contract type in this list that Dutch law regulates specifically and in the franchisee’s favour. The Wet franchise, in force since 1 January 2021 and applicable to agreements concluded before that date since 1 January 2023, is set out in articles 7:911 to 7:922 of the Civil Code. Its rules are mandatory: the parties cannot contract out of them to the detriment of a franchisee established in the Netherlands.

Three duties define the regime. First, a precontractual information duty under article 7:913 of the Civil Code: the franchisor must provide the draft agreement, the financial information the candidate needs to assess the formula, details of the fees and of any derived formula, and information about how consultation between the parties is organised. Second, a standstill period of at least four weeks under article 7:914 of the Civil Code, during which the franchisor may not change the agreement to the candidate’s detriment, may not conclude the contract, and may not push the candidate into payments or investments. Third, an ongoing duty of information and consultation during the relationship, including annual consultation and timely notice of changes to the formula that require investment.

The agreement itself must state how goodwill is determined and how it is compensated when the franchisor takes over the business, and any post-contractual non-competition clause must be in writing, limited to the goods or services covered by the formula, restricted to the area in which the franchisee operated, and no longer than one year. Changes to the formula that exceed an agreed threshold, and the introduction of a derived formula, require the consent of the franchisee or of the majority of the franchisees. Licensing the brand alone, without the operating formula and the accompanying duties, is a different contract; the distinction is explained in our article on the licence agreement, and the franchise regime as it works in practice in our guide to franchising in the Netherlands.

Commercial lease agreements

Dutch lease law splits business premises into two regimes, and which one applies is decided by the use of the property rather than by what the lease is called. Article 7:290 of the Civil Code covers retail space in the broad sense: shops, restaurants and cafes, takeaways, hotels and craft businesses with a counter open to the public. Everything else that is not a dwelling, including offices, laboratories, practice space and most warehousing, falls under article 7:230a of the Civil Code.

The difference in protection is substantial. A tenant of 290 space gets a statutory term structure of five years plus five, notice by bailiff’s writ or registered letter with a statutory notice period, and termination by the landlord only on the grounds the Civil Code lists, of which the landlord’s own urgent need for use is the main one; the court can also grant a period of grace. A tenant of 230a space has no term protection at all, only eviction protection: after the lease ends the tenant can ask the court for an extension of the vacating period, which may be granted for up to a year at a time and three years in total. Departures from the 290 regime to the tenant’s detriment need the approval of the court. We compare the two regimes in detail in our article on 290 versus 230a business premises.

Most Dutch commercial leases use the ROZ model, drafted from the landlord’s perspective, and the negotiation happens in the special provisions rather than in the model itself. The points that repay attention are the indexation mechanism, the split between maintenance for the landlord’s and the tenant’s account, the service charge settlement and its supporting evidence, the permitted use and whether it can be changed, the security in the form of a bank guarantee or deposit and when it is released, and the position on fixtures at the end of the lease. A break option and a right to sublet or assign have to be negotiated in; the model does not give them.

Choosing the right agreement

The practical question is rarely which template to download. It is which statutory regime the deal falls under, because that decides what can be agreed at all. Franchise and agency come with mandatory rules that override the contract. Lease of business premises comes with a protection regime chosen by the use of the property. Distribution and non-disclosure come with almost no statutory rules but with competition law and trade secret law running alongside them. Sales and services come with default rules that the contract can displace, provided it does so expressly rather than by silence.

Two errors account for most of the disputes we see. The first is a mismatch between the label and the substance: a distribution agreement that is in fact agency, a contractor agreement that is in fact employment, a licence that is in fact a franchise. The second is a contract that says nothing about the end of the relationship. Term, notice, what happens to stock, data, intellectual property and customers, and how a dispute is decided: those provisions are negotiated when the parties are still on good terms, and they are the ones that determine the cost of the exit.

Law and More drafts, reviews and negotiates commercial contracts under Dutch law, from a single supply agreement to a full set of terms and a shareholders’ agreement, and acts for businesses when a contract has to be enforced or defended. If you are unsure which agreement fits your situation or want an existing contract tested before you sign, contact our office.

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