Reinier advises national and international companies
reinier.russell@russell.nl +31 20 301 55 55The general terms and conditions you use do not apply just like this. A number of conditions must be met. One of them is that your contracting party has taken note of these general terms and conditions. How can you fulfil this information obligation?
It is advisable for entrepreneurs to make use of general terms and conditions. For these to apply, they must have been agreed upon. One of the conditions for this is that your contracting party can take note of the terms and conditions you want to apply. This is referred to as information obligation. This condition is usually fulfilled by also sending the general terms and condition or a link to them before or when a contract is concluded.
If your contracting party has no reasonable opportunity to take note of the contents of the general terms and conditions, they can be annulled. In that event, the rules you wished to declare applicable do not apply. Or at least, that was true until recently.
On 11 November 2022, the Supreme Court ruled that a contracting party is no longer allowed to annul general terms and conditions if it has become familiar with these conditions, even though they were not provided. It is no longer important in what way a contracting party has become familiar with the terms and conditions.
This ruling is particularly important for entrepreneurs who use standard (industry) conditions, such as FENIT, FENEX or ICT~OFFICE. Where entrepreneurs are deemed to be familiar with these standard terms and conditions, for example because they use them themselves or have received training on them, they cannot invoke their annulment if these terms and conditions are used by a contracting party.
The dispute on which the Supreme Court ruled concerned the delivery of sunflower cake by Doens Food Ingredients to cattle feed cooperation De Eendracht. De Eendracht processed it to cattle feed and then sold it to its customers. One of the customers was not satisfied with the product and the case between De Eendracht and the customer went to court. Then, De Eendracht called Doens to also appear in court, because Doens, according to De Eendracht, would be responsible for potential defects in the cattle feed.
Doens argued, however, that the court lacked jurisdiction. Indeed, the purchase agreements between Doens and De Eendracht had declared the Conditions of the Dutch Trade in Grain and Feed Materials (Conditiën van de Nederlandse Handel in granen en Diervoedergrondstoffen (CNGD)) applicable. These are standard industry terms and conditions, under which disputes between De Eendracht and Doens were to be submitted to an arbitrator and not to ordinary courts. However, the court held that the CNGD did not apply and therefore it had jurisdiction. Although the CNGD are mentioned in the agreements between Doens and De Eendracht, they were not provided to De Eendracht when the purchase agreements were concluded.
Eventually, the case reached the Supreme Court. It ruled that the CNGD did apply, even though they had not been provided when the agreement was concluded. This was because the statutory director of De Eendracht had attended the so-called ‘Graancursus’. This course covered the CNGD including the arbitration clause. Therefore, although the CNGD had not been provided, the director had taken note of the clause. The Supreme Court calls this a “familiarity exception”.
The Supreme Court ruled in 2011, that the information obligation was not met when the general terms and conditions can only be found (through a search) on the internet. In that case, it could not be assumed that the contracting party was informed of these terms and conditions. According to the Supreme Court, the general terms had to be provided when the contract was concluded.
In the judgment of 11 November 2022, the Supreme Court thus reversed this position. Indeed, the Supreme Court ruled that a contracting party can no longer annul general terms and conditions if it is familiar with them or can be deemed to have taken note of them. It does not matter whether they were provided when the contract was concluded or whether a contracting party became familiar with them in some other way. The director of De Eendracht who had attended training on the CNGD could no longer claim that he had no knowledge of the general terms and conditions because he had become familiar with them during the training.
With this judgment, the Supreme Court meets the practice by limiting the statutory power to annul general terms and conditions. Indeed, a contracting party can no longer invoke the annulment of general terms and conditions due to the lack of reasonable opportunity to take notice of them if it has already become familiar with the terms and conditions by other means or uses them in its own contracts. As a matter of fact, those who know terms and conditions do not need to be protected against them.
The fact that there is now an additional opportunity to contest a claim that general terms and conditions are null and void is no reason not to ensure that your contracting party can easily take note of your general terms and conditions. You can do that by attaching them to the contract to be signed or – if this contract is concluded digitally – by providing a link to your general terms and conditions. If Doens had done so, this dispute over the competent court would already have been decided in the first instance.
Would you like to learn more about general terms and conditions or have us draft them? Please contact Russell Advocaten:
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