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The biggest pitfalls regarding notices of default are a missing notice of default, an overly vague or missing time limit, and sending a notice of default while default has already occurred by operation of law. Any of these errors can result in no default occurring — and without default, no compensation for delay and usually no dissolution. Those who take the letter too lightly often find themselves empty-handed later in a dispute or legal proceeding. Below are the mistakes you must avoid.
The short answer
- No notice of default: the letter remains a non-binding reminder.
- Vague or missing timeframe: “soon” is not a reasonable timeframe.
- Incorrect basis: issuing a formal notice while default had already commenced by operation of law.
- Impossible performance: issuing a formal demand while performance is permanently impossible.
- No proof: cannot be proven to have sent, therefore date of failure uncertain.
Notice of default pitfalls: forgetting the notice of default
The most common mistake is a letter that only requests payment or performance without stating that default occurs upon failure to do so. Such a letter is a demand for payment, not a notice of default. Without this notification, no default occurs, and you cannot claim damages for delay or statutory interest. Always explicitly add: you will be in default if performance is not achieved within the stated period.
A term that is too short or vague
A second pitfall lies in the time limit. Wording such as “as soon as possible” or “by return mail” does not count as a reasonable period. State a concrete date. If you provide a period that is too short, the notice of default is not void—a reasonable period begins to run nonetheless—but the date of default shifts, leading to confusion and disputes. Align the time limit with the nature of the performance:
- Payment: usually 7 to 14 days.
- Repair of a defect: 1 to 4 weeks.
- Extensive assignment: longer, in proportion to the work.
The wrong legal basis
Sometimes a notice of default is not necessary at all because default occurs by operation of law (Art. 6:83 BW): in the event of an expired fatal deadline, an obligation to pay damages arising from a tort, or when the debtor has indicated that they will not perform. Anyone who subsequently grants a deadline in such a case may unintentionally create the impression that there was no default yet. Conversely, it is incorrect to dissolve the contract or demand damages without a notice of default when one was required. Therefore, first determine which legal basis applies.
Sending a formal demand while performance is impossible
If performance is permanently impossible—for example, the item to be delivered has been destroyed—a notice of default is pointless. Default is not at issue in that case; the failure is immediately without default, and the counterparty is liable without a formal notice. Anyone who sets a time limit nonetheless wastes time and may cloud their position. Therefore, assess whether the performance can still be delivered at all.
No proof of shipment
A valid notice of default that cannot be proven to have been sent will not help you in legal proceedings. Therefore, send it by email with a return receipt or by registered mail, so that it is established that you issued a notice of default, when, and what deadline you set. Brief SME example: an entrepreneur calls his supplier several times regarding a late delivery and thinks he is done with it. In the proceedings, he cannot produce a single notice of default — there is no default and the claim for damages due to delay is rejected. One demonstrable letter would have prevented that.
Honest recommendation
For a simple, undisputed situation, you can avoid the pitfalls yourself: include the three core elements (demand for payment, reasonable time limit, notice of default), choose the correct legal basis, and send it demonstrably. A lawyer is not necessary in that case. Do seek help as soon as things become complicated — doubt as to whether default has already commenced, a dispute regarding the breach, or a significant interest involving damages or dissolution. It is precisely in those cases that an incorrect notice of default is the most expensive.
Read more: view a sample notice of default and read how to draft one . Prefer to have it checked or drafted? Arrange a notice of default .
Frequently Asked Questions
Forgot the notice of default. A letter that merely requests performance without stating that default occurs upon failure to comply is an ordinary demand for payment. In that case, no default arises, and therefore there is no right to damages for delay or statutory interest.
Wording such as “soon” does not count as a reasonable period. State a concrete date. If the deadline is too short, the letter is not invalid, but a reasonable period begins to run after it has expired, causing the default date to shift and giving rise to a dispute.
In the event of default by operation of law (Art. 6:83 BW): an expired fatal deadline, damages arising from a tort, or a notification that performance is not being rendered. Also in the case of permanent impossibility of performance. Sending a formal demand is then unnecessary and may cloud your position.
If you dissolve the contract or claim damages without a notice of default when this was required, your claim may be dismissed. Sending a formal demand while default has already commenced by operation of law may create the impression that there was no default yet. First, determine the correct legal basis.
Yes. Send by email with a delivery confirmation or by registered mail. Sending a formal demand by telephone is difficult to prove. In legal proceedings, you must be able to demonstrate that you put the party in default, when, and what deadline you set.
Yes. Without valid default, you are in principle not entitled to compensation for delay and usually not entitled to dissolution. A missing notice of default or an incorrect basis can undermine a later claim.
In case of doubt as to whether default has already occurred, a dispute regarding the deficiency, or a significant interest involving compensation or dissolution. For a simple, undisputed outstanding invoice, you can avoid the pitfalls yourself with the correct structure and verifiable dispatch.
