What is a debt waiver agreement? Explanation and use

What is a debt waiver agreement? It is a written agreement in which a creditor waives one specific claim, so that the debtor no longer has to pay that specific amount. Legally, this is a waiver of a right to claim pursuant to Article 6:160 of the Dutch Civil Code: a bilateral legal act that only takes effect when the debtor accepts the offer. Unlike a broad waiver, this agreement focuses on one named claim, with a clear description of which amount and which invoice are being waived.

The short answer

• The agreement stipulates that a creditor waives one specifically named claim.
• The basis is Article 6:160 of the Dutch Civil Code: waiver of a right of claim, an agreement between two parties.
• The creditor's offer must be accepted by the debtor before the debt is extinguished.
• The core is an accurate description of the claim: which invoice, which amount, and which date.
• The debtor may derive a gain on the remission, which is in principle taxable.

What exactly is a debt waiver agreement from a legal perspective?

A waiver is not a unilateral favor. Article 6:160, paragraph 1 of the Dutch Civil Code stipulates that an obligation is extinguished by an agreement whereby the creditor waives his right to claim. Therefore, an offer from the creditor and acceptance by the debtor are required. Paragraph 2 makes this more flexible: an offer to waive is deemed accepted as soon as the debtor takes notice of it and does not reject it without delay. Nevertheless, an explicit, signed agreement is advisable, because it establishes which claim has been relinquished.

The unique aspect of this variant is its focus on a single claim. Whereas a broader waiver agreement sometimes settles an entire relationship, this agreement specifies exactly which entitlement lapses. This prevents you from accidentally disclosing more than intended. You describe the claim with the invoice number, amount, date, and the underlying agreement, ensuring there is no doubt regarding the scope.

Why withdraw one specific claim

The decision to write off one specific claim is often a business consideration. A supplier who wishes to retain a customer may decide to drop one disputed invoice without affecting the rest of the business relationship. Alternatively, an entrepreneur may write off an old, hard-to-collect claim to draw a line under that one issue, while ongoing deliveries continue as usual.

Precisely because it concerns a single claim, a clear demarcation is important. You do not want the waiver to inadvertently include other invoices or subsequent deliveries. By waiving only the named claim, you fully maintain all other claims. That is the major difference compared to a broad final discharge, which settles everything between the parties up to the present.

Whole or partial distance

Even within a single claim, you have a choice: to waive the entire claim or only a part of it. Partial waiver is common. For example, a creditor waives half of an 8,000 euro invoice in exchange for immediate payment of the other half. A certain partial payment then outweighs an uncertain entire claim following a collection process.

In the case of partial assignment, the wording is decisive. Without clear wording, it may remain unclear whether the payment is a down payment or a final payment. Therefore, stipulate that upon payment of the agreed portion, the remainder of that single claim becomes permanently forfeited, and that the assignment is limited exclusively to this claim. This way, the debtor knows exactly where they stand, and the creditor retains all other rights.

Tax consequences: debt forgiveness gain

For the debtor, debt forgiveness yields an accounting benefit: the debt disappears, so the assets increase. This is called debt forgiveness gain and is, in principle, taxable. Subject to conditions, the debt forgiveness gain exemption of Article 3.13, paragraph 1, sub a of the Income Tax Act 2001 applies, which carries over to corporate income tax via Article 8 of the Corporate Income Tax Act 1969. That exemption applies to benefits arising from the relinquishment of rights that are not capable of realization, and only to the extent that gain exceeds the losses still to be set off.

For the creditor, the waived claim is often a loss that can be deducted from profit, provided the claim is business-related and uncollectible. The tax aspect requires a tailored approach, so discuss this with an accountant before you sign.

Difference with a settlement agreement

An agreement for the waiver of a claim is sometimes confused with a settlement agreement. A settlement agreement (Article 7:900 of the Dutch Civil Code) ends uncertainty or a dispute by having the parties bindingly record what applies between them, even if this deviates from the previous situation. The waiver agreement merely causes a single named claim to lapse, without necessarily being based on a dispute.

In practice, they sometimes overlap. If there is a dispute regarding the amount of an invoice, you often opt for a settlement agreement with a waiver component. If you simply wish to let a single undisputed claim lapse, a claim waiver agreement suffices.

Honest recommendation

For a simple, undisputed waiver of a single small amount between parties who agree, you do not need a lawyer. A brief, signed statement containing the exact claim, the amount, and the notification that precisely this claim is waived is sufficient. Keep it professional and ensure that both parties sign.

Do seek assistance as soon as a dispute arises, the amount increases, there are multiple claims on both sides, or the tax implications become serious. At that point, you will want to clearly define the scope so that you relinquish only this single claim and have the debt forgiveness gain properly arranged before you sign.

Want to know more or have it arranged immediately? View the debt waiver agreement on our contracts page, read how to draft a debt waiver agreement , and what it costs to have one drawn up.

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