Core clauses in the general terms and conditions are asking for trouble

A core clause (which determines the core of the performance or the price) is legally distinct from a general condition, and the one excludes the other. Stricter requirements apply to a core clause (formulated transparently, expressly agreed upon), but if it is valid, the court cannot review it for unreasonable onerousness. Therefore, do not simply insert core clauses among your general conditions.

The Amsterdam Court of Appeal (ECLI:NL:GHAMS:2021:70) ruled that a “subordinate clause” in policy conditions — a provision stating that another insurance policy takes precedence — is a core term. A term that is so substantial that it affects the premium and the claims burden is generally considered a core term. Why is this distinction so important?

Core clause or general condition?

A general condition is a clause drafted for use in multiple agreements that regulates general matters, such as payment or the handling of complaints. A core clause—which specifies the essence of the performance (or the price)—is not considered a general condition under the law. Therefore, the one excludes the other.

It does not matter where the clause is located: a core clause remains a core clause, even if it is situated between the general terms and conditions or policy conditions. Conversely, a clause in the “body” of the agreement does not automatically have to be a core clause. Just as with the type of agreement, it is the content that counts, not the name: even if it says “purchase agreement” at the top, it can still be a hire-purchase.

Why the distinction is important

Stricter validity requirements apply to a core clause:

• Transparency requirement: it must be formulated sufficiently clearly and intelligibly.
• Meeting of minds: the party must have expressly consented to it.

That is of interest to anyone who wants to have the clause struck down. However, once a core clause is established, it is actually more difficult for the judge to set it aside: it forms the core of the agreement, and the judge may not, for example, simply change the agreed price. Unlike with general terms and conditions, the judge does not assess a core clause for unreasonable onerousness. For the other party, therefore, it can actually be beneficial that something qualifies as a core clause.

What did this mean in the case?

Following a traffic accident, the insured had claimed legal assistance costs from his SVI insurer. The insurer refused, citing the "na-u" clause, because the insured also held legal assistance insurance. The judge considered the "na-u" clause to be a core term because it defines the insured risk. A valid core term does not need to be tested for unreasonable onerousness. Subsequently, the judge examined the validity requirements: the clause was grammatically sufficiently clear and there was a meeting of minds. The "na-u" clause therefore stood.

Frequently Asked Questions

What is the difference between a core clause and a general condition?

A core clause determines the essence of the performance or price and is not a general condition. A general condition regulates ancillary matters. The legal consequences (review, validity requirements) differ.

Can a judge strike down a core clause?

The court does not review a valid core clause for unreasonable onerousness and cannot simply set it aside. However, it may fail if it is insufficiently transparent or if there was no meeting of minds.

Am I allowed to include a core clause in my general terms and conditions?

It is possible, but unwise. The classification depends on the content, not the location, and it raises debate. It is preferable to keep core terms in the main contract and formulate them transparently.

Have your terms and conditions drafted professionally

Terms and conditions are not automatically unassailable. The legal experts at MKB Juristen draft your general terms and conditions and core clauses to ensure they are legally sound. View our expertise in contract law or schedule a free consultation .