Drafting a mediation agreement: what belongs in it

Drafting a mediation agreement involves definitively establishing four things: exactly what the intermediary must do, when they are entitled to remuneration, the duration of the assignment, and how to handle conflicts of interest. The law provides the basic rules for this in Articles 7:425 through 7:427 of the Dutch Civil Code, but between commercial parties, these are largely of a regulatory nature. Those who make no arrangements fall back on the statutory main rule that remuneration is only due once the agreement with the third party is concluded. This is often less favorable for the mediator than expected, and riskier for the client than it appears.

The short answer

• Assignment: Describe concretely which agreements the mediator must help bring about, and with which target group.
• Remuneration: amount, basis and the exact moment at which the commission becomes due.
• Post-assignment effect: whether wages are due for deals concluded only after the completion of the assignment.
• Exclusivity and duration: exclusive right or not, fixed or indefinite duration, notice period.
• Conflicts of interest: no double mediation without consent, reporting obligation in case of self-interest.
• Limitations: no power of attorney to sign, unless you consciously choose to be authorized.

Drafting a mediation agreement: start with the assignment

Article 7:425 of the Dutch Civil Code defines a brokerage agreement as the instruction to act as an intermediary for remuneration in bringing about agreements between the principal and third parties. Practice rarely stumbles over that definition, but rather over the question of exactly which deals fall under it. Therefore, establish:

• The type of agreement being mediated: purchase, lease, license, services, employment mediation.
• The area or segment: which region, which market, which customer group.
• The effort: what activities does the client expect, and what reporting moments apply.
• The limit of authority: the mediator negotiates and informs, but does not bind the client. Without that sentence, a discussion arises as to whether a power of attorney has been granted tacitly.

Also include that the client decides whether to accept a proposed party. This prevents the claim that rejecting a candidate constitutes a breach of contract.

The wage agreement: the most important article

Unless otherwise agreed, Article 7:426 paragraph 1 of the Dutch Civil Code applies: entitlement to remuneration as soon as the agreement between the client and the third party has been concluded through the mediation. No deal, no fee. If you wish to deviate from this, it must be stated explicitly. In any case, ensure the following:

• The basis: percentage of the transaction value, a fixed amount per concluded agreement, or a combination with an intake fee.
• The point of application: at signing, upon delivery, or only upon payment by the third party. In practice, this is the biggest point of conflict.
• Resolutive conditions: what happens to the fee if the deal falls through due to financing or due diligence.
• VAT and costs: is the fee inclusive or exclusive, and which expenses may the intermediary pass on.
• Follow-up orders: does the intermediary also earn from repeat purchases by the same customer, and if so, for how long?

Additionally, include provisions regarding the after-effect. Article 7:426 paragraph 2 of the Dutch Civil Code entitles the intermediary to remuneration if the agreement is concluded after the completion of the assignment as a result of his activities during the term. In the contract, you make this manageable by including a list of parties introduced by the intermediaries and specifying a time limit, for example, twelve months after the end of the assignment. This way, everyone knows where they stand and you avoid disputes regarding proof afterwards.

Term, exclusivity and termination

Mediation is a contract, so Article 7:408 of the Dutch Civil Code applies: the client may terminate the contract at any time. Additional limitations apply to a contractor who is not acting in the exercise of a profession or business, and a consumer client is never liable for damages upon termination. For business relationships, however, one may agree on a reasonable notice period and compensation for work already performed. Article 7:411 of the Dutch Civil Code provides the legal basis for this: in the event of premature termination, a reasonable portion of the fee may be due.

Pay attention to the duration in combination with sustainability. If the intermediary is engaged structurally and for an indefinite period to bring about agreements for you, there is a high probability that the court will classify the relationship as agency (Art. 7:428 BW). In that case, mandatory notice periods and possibly a client compensation apply. If you do not want this, keep the assignment genuinely project-based and reiterate this not only in the text but also in the execution.

Conflicts of interest and double commission

Article 7:427 of the Dutch Civil Code declares Articles 7:416 through 7:418 of the Dutch Civil Code applicable by analogy. This means three hard limits that must be mirrored in the contract.

• No two masters to serve. Acting for both parties is only permitted if the content of the agreement to be concluded is defined so precisely that a conflict of interest is ruled out (Art. 7:417 BW). Therefore, include a provision stating that the mediator shall not act for the other party without prior written consent.
• Consumers in real estate. If the intermediary acts as an agent for the seller or landlord and the buyer or tenant is a consumer, the intermediary may not charge that consumer any brokerage fees. This is mandatory law. The Supreme Court has also applied this to rental platforms that offer properties on behalf of landlords.
• Disclosure of personal interest. If the intermediary has a personal interest in the deal, for example a stake in the third party or remuneration from that party, he must disclose this (Art. 7:418 BW). If he fails to do so, his right to remuneration lapses.

Other provisions worth noting

• Confidentiality regarding customer data, prices, and margins, for a period surviving the assignment.
• Liability: the intermediary is responsible for his best efforts, not for performance by the third party. Limit liability to, for example, the fee received.
• Processing of personal data: personal data is almost always exchanged in employment and housing mediation. Define the division of roles under the GDPR.
• Applicable law and forum, especially in cross-border mediation.
• Licenses: mediation in insurance, credit, or mortgages falls under the Financial Supervision Act and requires an AFM license. Include a guarantee that the intermediary holds one.

Practical example

A software company has an intermediary recruit new resellers for 8 percent of the first year's turnover. The first contract stated only “fee upon signing reseller agreement”. When two resellers cancelled after three months without ever purchasing anything, the fee was still due. In the new version, the triggering point is linked to invoiced turnover, with a refund arrangement for cancellation within six months. A difference of one sentence, a difference of thousands of euros per year.

Honest recommendation

For a one-off mediation between two business parties involving a limited fee, you do not need a lawyer. A brief agreement outlining the assignment, the fee, the date on which it becomes due, the duration, and a retroactive period covers the usual disputes. However, have it drafted or reviewed if you intend to use a fixed model for multiple intermediaries, if you work with consumers, if the fee is substantial, or if the collaboration becomes long-term and thus moves towards an agency arrangement. Review is also advisable for financial mediation, as a licensing regime applies there alongside the Civil Code. Drafting it is a one-time task; you will use the model for years to come.

Background and context: what is a mediation agreement and having a mediation agreement drafted. You can arrange this directly via mediation agreement.

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