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Practical legal tips on the applicability of General Terms and Conditions of Trade

maandag 6 juli 2020

Are you sometimes confronted with the situation where your business enterprise has contracted with another business and your business enterprise has sent an offer to the other party you’re your General Terms and Conditions and the other party has accepted your order by return stating that that their General Terms and Conditions apply? The question is which General Terms and Conditions apply here. This is what is called a “battle of forms”.

Assuming Dutch law is applicable, then the United Nations Convention on Contracts for the International Sale of Goods (CISG), will also be applicable in addition to Dutch law, unless it has been specifically excluded in the business contract. The CISG states that the General Terms and Conditions are applicable in accordance with the “last shot” rule. This means the last party declaring their General Terms and Conditions to be applicable is successful.

If the CISG is not applicable or has been expressly excluded by the parties, then Dutch law uses the “first shot” principle. This means that the first party declaring their General Terms and Conditions to be applicable goes first provided the provisions of article 6:265 (3) of the Dutch Civil Code have been met. This means that all other party’s General Terms and Conditions should be expressly rejected. Case law has shown that by merely adding wording to your company’s General Terms and Conditions is not sufficient and my advice is to include specific wording in your offer to the other party. It needs to be extremely clear to the other side that your company will and is rejecting their General Terms and Conditions.

As you can read, there are some challenges to be met in the event that your business enterprise uses General Terms and Conditions and regularly contracts with international parties. In addition to a very specific procedure that Dutch law requires for the applicability of the General Terms and Conditions, there is this requirement to meet too. In an earlier article, I set out which steps your company needs to take for the General Terms and Conditions to be applicable. The normal rules of offer and acceptance are applicable for the applicability but in addition the General Terms and Conditions need to be “handed over”. There are a number of ways of doing this. The safest way is is to include a PDF of your General Terms and Conditions and attach it to the offer that your company is sending. Furthermore a reference on your website together with a link to the General Terms and Conditions may also be an option as well as registration of the General Terms and Conditions with the Chamber of Commerce or the Civil Court.   

If I can help you in relation to the above, please feel free to contact me. 

Madelon van Breemen

International business to business contracting

+31 (0)10 209 27 65
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Rob Steenhoek

insolvencies and reorganisation, business and shareholders

+31 (0)10 209 27 52 steenhoek@lvh-advocaten.nl
Justin de Vries

insolvencies and reorganisation, business and shareholders

+31 (0)10 209 27 52 devries@lvh-advocaten.nl
Peter Verheijden

commercial cooperations, mergers and acquisitions, employment law and employer representation 

+31 (0)10 209 27 75 verheijden@lvh-advocaten.nl
Michelle Reevers

aviation, commercial contracts, business and shareholders

+31 (0)10 209 27 75 reevers@lvh-advocaten.nl

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