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Assumption of debt (Art. 6:155 BW): transfer of debt from debtor to third party — requires creditor's consent. Assumption of contract (Art. 6:159 BW): transfer of the complete contractual position (rights and obligations) — requires counterparty consent. Common in acquisitions, restructurings, or termination of activity. Important: no transfer without counterparty consent. Below are the differences, applications, and how Tessa assumes contracts during an acquisition.
The short answer
- Assumption of debt: debt transferred to new debtor — creditor's consent required.
- Assignment of contract: transfer of the entire contract (rights + obligations) — consent of the counterparty required.
- Form: in writing, but no specific formal requirements.
- Applications: acquisition, restructuring, termination of activity, resale.
- Without consent: invalid — debt or contract remains with the previous party.
Difference between assignment, debt assumption, and contract assumption
- Assignment: only claim (right) over — creditor becomes new.
- Assumption of debt: only the debt (obligation) remains — the debtor becomes the new one.
- Assignment of contract: complete position transferred — party becomes new.
In the case of the takeover of customer contracts: often a contract assignment (all rights and obligations are transferred).
Assumption of debt (Art. 6:155 BW)
Debt transfers from the original debtor (transferor) to a third party (assignee). Requirements:
- Agreement between transferor and transferee.
- Creditor's consent.
- The creditor can give consent in advance, at the time of transfer, or afterwards.
Consequence: the original debtor is discharged. The creditor only has a claim against the assignee.
Example: in a company acquisition, buyers take over the bank loan — the bank must agree.
Contract takeover (Article 6:159 of the Dutch Civil Code)
The entire contractual position is transferred. Example: in the acquisition of customer agreements, the buyer assumes all delivery obligations AND payment rights.
Requirements:
- Agreement between transferor and transferee.
- Consent of the counterparty in the contract.
- Deed with parties and contract specification.
Distinction from transfer of undertaking (Art. 7:662 BW): in the case of a transfer of undertaking, employment contracts are automatically transferred without separate consent. Non-employment contracts, however, do require takeover.
Obtain permission
Main obstacle: the other party must agree. Possible routes:
- Included in the contract beforehand: “preliminary consent” — built-in flexibility.
- At the time of transfer: signing of the deed.
- Subsequent ratification: acknowledgment after acquisition.
In case of refusal: assignment of the contract invalid — the contract remains with the previous party. Sometimes the purchase price must be reduced or the structure adjusted.
Tessa's takeover
Tessa acquires small electronics company — including 25 ongoing customer contracts and 5 supplier agreements:
- For customer contracts: letter to each customer requesting permission for takeover. 23 of 25 agree.
- 2 customers refused: contracts remain with previous owner — must be settled separately.
- For supplier contracts: 4 out of 5 consent. 1 refuses: new contract drawn up with acquirer under different conditions.
- Bank loan: debt takeover with bank permission after due diligence.
Lead time for consent process: 6 weeks. Important to factor this into the purchase price/timing.
Strategies to avoid consent
- Share transfer: BV remains owner of contracts — no takeover necessary.
- Pre-emptive consent: include in standard contracts.
- Subcontracting: the assignee executes under the name of the transferor.
- New contract: in case of refusal, renegotiate with the new party.
Honest recommendation
When acquiring a company involving contracts: contract assignment is required and counterparty consent is essential. Allow time (4-8 weeks for consents). For flexibility: include a “preliminary consent” clause in your own contracts. Alternative: share transfer instead of asset acquisition — avoids numerous consents. For complex acquisitions: engage a lawyer with M&A experience.
For other topics: deed of assignment, share transfer and business merger.
Frequently Asked Questions
Assumption of debt (Art. 6:155 BW): only the debt is transferred to the new debtor. Assumption of contract (Art. 6:159 BW): complete contractual position (rights + obligations). Both require the consent of the counterparty.
Yes — without the counterparty's consent, the transfer is invalid and remains with the former party. Possible routes: included in the contract beforehand, at the time of transfer, or ratified afterwards.
Asset transfer (asset deal): contract assignment per contract with consent. Share transfer: BV remains owner, no takeover required — simpler but different tax consequences.
No — upon transfer of the business, employment contracts are automatically transferred (Art. 7:662 BW) without separate consent. Other contracts (customers, suppliers, loans) do require takeover.
Send a written request to the other party explaining the purpose of the takeover. Grant a reasonable timeframe (2-4 weeks). In case of refusal: adjust the purchase price, the contract remains with the former party, or negotiate a new contract with the acquirer.
Clause in standard contract: “In the event of acquisition, consent will be given now.” Provides flexibility for subsequent acquisitions without per-contract consent. Standard in modern SME contracts.
4-8 weeks for the consent process in a business acquisition involving 20+ contracts. Some counterparties respond quickly, others slowly. Allow ample time for the purchase price/timing — delays cost money.
