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You may charge cancellation fees if a customer cancels an order, but regarding consumers, a cancellation fee clause is on the grey list (Article 6:237 of the Dutch Civil Code): it is presumed to be unreasonably burdensome, and you must prove that it is reasonable.
What is a cancellation fee clause?
A cancellation fee clause stipulates that a customer pays costs if they cancel an order or assignment prematurely. Entrepreneurs like to include this as standard in their general terms and conditions to cover incurred costs and lost revenue.
The presumption of unreasonable onerousness
For consumers, a grey list applies of clauses that are presumed to be unreasonably burdensome (Article 6:237 of the Dutch Civil Code). The cancellation fee clause is on that list. As a result, the burden of proof shifts to you: you must demonstrate that the agreed costs are reasonable. If you fail to do so, the clause may be annulled.
How do you make the clause reasonable?
Keep cancellation costs proportionate to the actual costs incurred and the lost revenue. A sliding scale that increases the closer the cancellation is to the performance is often justifiable. A fixed, high amount independent of the damages usually is not.
Business customers
You have more freedom with business clients: the grey list does not apply directly. Nevertheless, an excessive clause remains vulnerable there as well, through the general reasonableness test. A balanced clause holds up best in both cases.
Frequently Asked Questions
Am I always allowed to charge cancellation fees?
You may agree upon them, but they must be reasonable and substantiated towards consumers. A disproportionately high amount is voidable.
How high can the cancellation fees be?
There is no fixed maximum; the determining factor is the ratio to your actual costs and lost revenue. A substantiated tiered system is the strongest.
Does this also apply to service provision?
Yes, the grey list for consumers also applies to assignments and services. Tailor the clause to the nature of your service.
Make your terms and conditions watertight?
Our legal experts draft a valid cancellation clause and incorporate it into your general terms and conditions. View our contract lawteam or schedule a free consultation.
