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Without a valid notice of default, you are usually not permitted to terminate an agreement, engage a substitute party, or claim damages. A client who forgot this had to pay his contractor over 1.7 million euros after all. A proper notice of default is formal, specifically states which obligation must be fulfilled and on what grounds, and sets a clear, reasonable timeframe (often around two weeks).
Are you dissatisfied with a contractor, or do you want a client to pay? In most cases, you cannot do so without a notice of default. Only in a handful of cases is this not necessary — and forgetting to do so can cost you dearly.
Forgotten notice of default costs 1.7 million euros
In this case (ECLI:NL:RBAMS:2021:4264), a contractor installed a pipe structure. The client was dissatisfied with the progress, quality, and safety, stopped payments following complaints, terminated the contract, and had the work completed by another contractor. The original contractor claimed over 1.8 million euros, arguing that he had never been properly put in default.
The judge ruled in his favor. The client referred to emails, but these were not specific: they did not mention which contractual obligation the contractor was failing to fulfill, and did not provide a deadline for compliance. They were merely complaints, not a formal notice of default. As a result, the client was not permitted to have the work performed by a third party — and had to pay the contractor over 1.7 million euros.
Requirements for a valid notice of default
A proper notice of default is a formal demand and must contain a clear, reasonable period within which performance must be rendered (what is reasonable depends on the case; often around two weeks applies). Furthermore, it must clearly state what you are claiming and on what grounds.
There are only two statutory exceptions where no notice of default is required: if the debtor's conduct shows that sending a reminder and setting a deadline would be futile, or if he states that he will not comply in any case.
Why this is so important
An incorrect or forgotten notice of default has major consequences. Without a proper notice of default, you usually cannot terminate the contract, have work performed by a third party, or claim damages; the judge will reject such claims, and you are left with the legal costs — in the worst-case scenario, you may have to pay damages yourself, as in this case.
Frequently Asked Questions
What must be included in a notice of default?
A formal demand with a clear, reasonable timeframe (often about two weeks), plus a concrete description of what you are claiming and on what grounds. Isolated complaints or vague emails do not suffice.
Do I always need a notice of default?
Usually yes, before you can dissolve the contract or claim damages. Only in limited cases — such as a debtor who indicates they will not perform — is this not necessary.
What if I don't send a (proper) notice of default?
In that case, you may forfeit your rights: no dissolution, no substitute performance, no compensation for damages, and possibly liable for damages and legal costs yourself.
Have a notice of default drawn up
A notice of default that does not meet the requirements can cost you dearly. The legal experts at MKB Juristen draft a watertight notice . View our expertise in contract law or schedule an intake meeting .
