Explained: contractual limitation periods in general terms and conditions

A contractual limitation period in your general terms and conditions is a period within which your customer must complain, file a claim, or institute legal proceedings – if they fail to do so on time, their right lapses permanently. Such a limitation clause is permitted in principle and offers you, as an entrepreneur, legal certainty and protection against late claims. However, strict rules apply: a contractual limitation period may only shorten a statutory period and not extend it, and a period that is too short towards consumers can be unreasonably burdensome and therefore invalid. Formulating such a clause yourself is consequently riskier than it seems.

In short: a forfeiture period causes the right itself to lapse permanently and, as a rule, cannot be interrupted or extended. A limitation period allows the right to exist but makes it unenforceable, and can be interrupted. In your general terms and conditions, you may shorten a statutory period, but not extend it – and extra restraint applies towards consumers.

What is a lapse period and what is the difference compared to a statute of limitations?

A limitation period affects the legal claim. If the period has expired, the claim still exists, but the creditor can no longer successfully enforce it. For example, a debtor can invoke the statute of limitations to avoid having to pay an old invoice. Important: the statute of limitations can be interrupted, causing a new period to start running.

A forfeiture period goes further and extinguishes the right to claim itself . After its expiration, there is no longer a right that you can invoke – it is permanently gone and, as a rule, cannot be interrupted or extended. Therefore, a forfeiture period has a stronger effect than a limitation period. In some cases, the judge must also apply a forfeiture period ex officio.

The Dutch Civil Code provides for varying periods for prescription, depending on the type of claim. The precise duration and starting point differ per situation; in cases of doubt, always have this legally reviewed, as an incorrect assessment can mean that your claim has expired unnoticed.

Statutory limitation period as an example: the duty to complain (Art. 6:89 BW)

A well-known example of a statutory limitation period is found in Article 6:89 of the Dutch Civil Code. This article stipulates that a creditor can no longer invoke a defect in performance if he has not protested to the debtor “within a reasonable time” after discovery. Is your customer complaining too late? Then all his rights in this regard may have lapsed. Exactly what “within a reasonable time” means depends on all the circumstances of the case – there is no fixed time limit stipulated in the law.

What contractual forfeiture clauses exist?

A contractual limitation period always arises from an agreement or from your general terms and conditions. In principle, the legislator permits this, but the clauses come in various forms, each with its own consequences.

Contractual procedural limitation period

This restricts the right to claim: after the expiration of an agreed period, your customer can no longer institute legal proceedings. For example, general terms and conditions may stipulate that the customer must go to court within a certain period after discovering a hidden defect, on pain of forfeiture of the right to claim. Such a contractual period is generally not applied by the court <i>ex officio</i>.

Contractual complaint limitation period

Not only a claim, but also a complaint can be subject to a limitation period. Your general terms and conditions may contain a complaints procedure specifying the timeframe within which the customer must lodge a complaint. Sometimes this is a fixed period, sometimes an open formulation such as “within a reasonable period after discovery of the defect”. Complaining too late may result in a sanction, such as the loss of the right to repair or a replacement product. A warranty period is a practical example of this: reporting too late can have far-reaching consequences.

Contractual liability limitation period

Finally, a limitation period can serve to limit your own liability. The customer must then hold you liable within a certain period; if they fail to do so, your liability lapses. This type of clause is often combined with other exoneration or liability clauses.

Practical example: what does a forfeiture clause look like?

Suppose you supply custom software to a business client. You want to prevent him from unexpectedly filing a claim a year later regarding a defect he noticed long ago. In your general terms and conditions, you can include a forfeiture clause that obligates the client to complain within an agreed period of discovery and, if he wishes to litigate, to go to court within an agreed period.

Complaints regarding the performance delivered must be reported to us in writing within a period specified in the agreement after discovery. Failure to do so shall invalidate any right to repair, replacement, or compensation.

This is merely an illustration. The correct term, wording, and exceptions depend on your industry, your clientele (business or consumer), and the nature of your service. A term that is too short or too vague can undermine the clause, while a term that is too broad offers you little protection. Therefore, have a forfeiture clause drafted to suit your specific needs rather than adopting an example.

When is a contractual expiry date valid?

A forfeiture clause is not automatically watertight. There are limits to what you can legally agree upon.

• You may shorten, but not extend. A contractual expiry period may limit a statutory period, but not extend it. You can therefore shorten a statutory period, but not lengthen it.
• Be careful with consumers. A clause that significantly shortens a statutory limitation or forfeiture period towards a consumer may unreasonably burdensome and therefore voidable. Very short periods are particularly vulnerable to challenge against consumers.
• Reasonableness and fairness. Even between entrepreneurs, reliance on a forfeiture clause may, in exceptional cases, be limited by the requirements of reasonableness and fairness.
• Clear and discernible. A forfeiture clause must be clearly formulated and agreed upon in the proper manner. Unclear or hidden clauses are more likely to lose in a dispute.

Whether a specific limitation period holds up depends heavily on the wording chosen, the length of the period, and the nature of the relationship (business or consumer). Case law on this matter is nuanced and not always unambiguous.

What benefits does a forfeiture clause offer your business?

A well-formulated forfeiture clause has clear practical advantages:

• Legal certainty: you know after a certain period that no further claims can follow.
• Limitation of liability: late and difficult-to-substantiate claims are cut short.
• Evidentiary advantage: it is illogical for a customer to invoke the warranty months after discovering a defect, while the cause of the defect can often no longer be determined by then.

Precisely because the consequences for the customer are so far-reaching, the judge examines the wording critically. A forfeiture clause that is too strict or unclear may completely miss its purpose.

Next steps: how to properly set an expiration date

Do you want to use forfeiture clauses in your general terms and conditions? Then review these points:

1. Determine for each type of claim (complaint, demand, liability claim) whether and which time limit you want to apply.
2. Differentiate between business customers and consumers; you have less leeway with consumers.
3. Formulate the time limit clearly and link a clear consequence to it (expiration of which right exactly?).
4. Ensure that your terms and conditions are declared applicable in the correct manner, otherwise the clause will lack effect.
5. Have the clause legally reviewed before using it, especially if you supply to consumers.

Are you already facing a late or disputed claim? Then take a look at our legal assistance for entrepreneurs, or our debt collection regarding an outstanding debt.

Frequently asked questions about contractual expiry periods

What is the difference between a lapse period and a limitation period?

With prescription, the claim continues to exist, but you can no longer enforce it; moreover, prescription can be interrupted. With a forfeiture period, the right itself disappears and is generally final, without the possibility of interruption or extension.

Am I allowed to include my own expiration period in my general terms and conditions?

Yes, contractual limitation periods are permitted in principle. You may shorten a statutory period but not extend it, and towards consumers, a period that is too short can be unreasonably burdensome and therefore invalid.

How long may a contractual expiry period be?

The law does not specify a fixed minimum or maximum length for a contractual forfeiture clause. What is reasonable depends on the industry, the nature of the performance, and your client base. Very short terms are more readily deemed unreasonably burdensome towards consumers than towards business clients. Therefore, have the chosen length tailored to your specific situation.

Can a forfeiture period be interrupted like a limitation period?

No, as a rule not. That is precisely a fundamental difference: a limitation period can be interrupted, causing a new period to start running, whereas a forfeiture period simply causes the right to lapse upon its expiration.

What happens if a customer complains too late?

If a customer fails to complain within the statutory or contractual period, they may lose their rights regarding that defect—such as the right to repair, replacement, or compensation. Whether this is the case depends on the law (such as Article 6:89 of the Dutch Civil Code), your terms and conditions, and the circumstances.

Does a limitation period also apply to consumers?

Yes, but the scope is more limited. Clauses that significantly shorten terms for consumers can be challenged as unreasonably burdensome. With business clients, you generally have more leeway.

Have your forfeiture clause legally reviewed

A limitation period is a powerful instrument, but incorrect wording renders the clause worthless or even voidable. Because the subject matter is nuanced and case law is divided, experimenting with limitation clauses yourself is ill-advised. Our legal experts are happy to assist you with drafting or reviewing your general terms and conditions and broader contract lawissues, ensuring your limitation clause performs as intended.

Schedule a no-obligation intake and discuss your situation with one of our legal experts.