Law and regulation of force majeure in the Netherlands

Yes, Article 6:75 of the Dutch Civil Code (“DCC”).

Article 6:75 DCC states: “A shortcoming cannot be attributed to the debtor if it is not due to his fault, nor is he responsible for it by law, legal act or prevailing views.” 

In principle parties are free to regulate force majeure clauses, as the Dutch law system is based on the principle of freedom of contract.   

Parties are free to define the circumstances that are covered by the force majeure clause, but must always take into account the principles of reasonableness and fairness and mandatory Dutch law. 

Where the agreement does not specify what qualifies as force majeure, the default provisions of Dutch law will apply. This means that the shortcoming has to be non-attributable to the debtor, that there has to be an absence of fault and that the risk cannot be attributable to the debtor based on the law, a legal act or prevailing views. Whether this is the case must be assessed in light of the totality of the circumstances of the case and the principles of reasonableness and fairness, and cannot be determined in a general sense. 

Parties are in principle free to negotiate their agreements based on the principle of freedom of contract. This applies to both B2B and B2C transactions. However, for consumers there are several provisions of mandatory law that limit this freedom.

For both B2B transactions as well as B2C transactions, a force majeure clause has to adhere to the principles of reasonableness and fairness. What qualifies as reasonable and fair however differs between B2B and B2C. 

Consumers in general receive protection based on mandatory consumer law and the principles of reasonableness and fairness and force majeure clauses that are used in B2C transactions will therefore often be limited by mandatory consumer law and/or the aforementioned principles.  

When using T&Cs it is always important to keep provisions on applicability in mind. When judging a case, the court will always take all of the circumstances of the case into account, like the nature of the agreement, the size and the background of the parties, what they meant when contracting and also whether the parties negotiated the contract and the applicability of the T&Cs. In principle, there is no difference between a force majeure clause that is laid down in a contract or in applicable T&Cs; however, a judge will always take all circumstances into account including the principles of reasonableness and fairness. A court might be stricter in its judgement of a force majeure clause in T&Cs as there most likely has not been any negotiation about the content of the T&Cs. A force majeure clause that has been thoroughly negotiated between (professional) parties is less likely to be annulled by a court.

Under Dutch law, provisions in T&Cs which apply to consumers can be unreasonably onerous and in such case could be annulled. Several provisions that are deemed or suspected to be unreasonably onerous are laid down in the DCC. For instance, a provision that frees the user of the T&Cs in whole or in part from a legal obligation to pay compensation may be viewed as unreasonably onerous with regard to consumers. An extensive force majeure clause could be included under this.

Depending on which side a party is on (e.g. supplier or customer) one could think of explicitly including the following circumstances in a force majeure clause, beside the aforementioned text in Article 6:75 DCC, stating that force majeure includes:
shortage of material, transportation difficulty, shortcomings of a third party, riot, acts of God, epidemic, virus, seizure,  insurrection, accident, war, civil disturbance, fire, flood, strike and/or other labour disputes, act of government and/or government regulation or other occurrence beyond the reasonable control of a Party. 

Definition: it is recommended that the parties clearly define the situations in which an event is considered to be a force majeure.

Consequences: it is recommended that the parties clearly indicate what the consequences of invoking a force majeure clause will be; e.g. termination, amendment of the agreement, and/or compensation. 

Timing: it is recommended that the parties indicate a specific time period after which the agreement will terminate and/or provide the parties with the opportunity to terminate because of the force majeure event. 

Please note that the principles of reasonableness and fairness should always be borne in mind, as a force majeure clause aims to exclude a party’s liability for failure to perform its obligations under an agreement. If the force majeure clause is drafted too broadly, it may be construed as unreasonable by the courts and in that case will afford no (or limited) protection. This depends on the totality of the circumstances of the case, assessed on a case-by-case basis.

See the above. It is important to include “epidemic”, “virus” and “act of government and/or governmental regulations” in the force majeure clause to ensure that these are covered. But as previously noted, every event of force majeure will be judged on a case-by-case basis (taking account of all circumstances) and in accordance with the principles of reasonableness and fairness.

Alternative remedies could include:

• suspension of obligations
• amendment of the agreement (unilaterally by the court or by agreement of the parties)
• (partial) termination

Whether this is possible will depend on the content of the agreement itself.

Where the above alternatives have not been provided for under the agreement, the parties may ask the court to amend, partially terminate or fully terminate the agreement based on unforeseen circumstances (Article 6:258 DCC). Here the principles of reasonableness and fairness will also apply.

At this point there have been several judgements from the Dutch courts with regards to the corona virus, force majeure and other remedies. We have learned that in general the courts have deemed force majeure not to apply with the corona virus. This is due to the fact that the corona virus in most cases does not prevent the performance itself. However please note that this always depends on all circumstances of the case and the contents of the agreement. A remedy which the courts have accepted however is amendment, partial termination or full termination based on unforeseen circumstances. Courts have decided that in principle the corona virus qualifies as an unforeseen circumstance. For a successful appeal on unforeseen circumstances there must be circumstances that lie in the future at the time of entering into the agreement and that have not been (tacitly) taken into account by the parties in the agreement. In addition, the circumstances must be of such a nature that it is unacceptable according to the principles of reasonableness and fairness that the other party requires the unaltered continuation of the contract. In many cases the courts have used a “share the pain” or “share the burden” approach to amend the agreement, due to the fact that neither party is to blame for the corona virus and therefore in some cases an equal distribution was justified according to the court. The nature and content of a contract and the other specific circumstances of the case remain relevant for answering the question what effect Covid-19 exactly has on rights and obligations from a contract. Any risk allocation previously agreed between the parties is also an important factor in the assessment.

Please note that, where a party is not able to adhere to its obligations under an agreement, under Dutch law the other party has the right to terminate the agreement. It is, however, possible to agree otherwise in the contract. We always advise that the contract be checked carefully to determine whether an appeal based on force majeure is a possibility and what the consequences of this would be.