What are general terms and conditions? Function and legal status

What are general terms and conditions? They are the standard clauses you draft in advance to use in a series of agreements: payment terms, liability, delivery times, complaint periods, retention of title, and choice of law. The law regulates them in Section 6.5.3 of the Dutch Civil Code (Articles 6:231 to 6:247). They are not mandatory, but without your own terms and conditions, you rely entirely on statutory rules, which often turn out less favorably for you. Furthermore, they only work if you declare them applicable in a timely manner and provide them to the customer. Below are the legal status, the limits, and common mistakes.

The short answer

• Definition: stipulations drafted to be included in a number of agreements (Art. 6:231 sub a BW).
• Exception: core terms such as price and the delivered product or service are not covered.
• Not mandatory, but highly recommended: they supplement the law and limit your risk.
• Valid if: you declare them applicable and provide them before or at the conclusion of the agreement.
• Sanction: unreasonably burdensome or unprovided clauses are voidable (Art. 6:233 BW).
• Filing with the Chamber of Commerce is not a legal requirement and does not replace provision.

What are general terms and conditions (GTC) according to the law?

Article 6:231 sub a of the Dutch Civil Code defines general terms and conditions as clauses drawn up to be included in a number of agreements, with the exception of clauses that indicate the core of the performance. It therefore concerns the reusable part of your contract: the rules of the game that you want to keep the same for every customer. In practice, the abbreviation *av* is used interchangeably with delivery terms, sales terms, or purchasing terms. Legally, it is all the same: it concerns the content and repeated use, not the name on the document.

What they do not cover is at least as important. The agreed price and the description of what you deliver are core terms. These fall outside the scope of the regulation and therefore cannot be annulled on the grounds that they are unreasonably burdensome. The rest, from payment terms to limitation of liability, does fall under it and is subject to review by law.

What is usually in it

• Applicability and exclusion of customer terms and conditions.
• Quotations and conclusion: validity period, non-binding nature, order confirmation.
• Prices, payment and payment term, with interest and collection costs for late payment.
• Execution, delivery times, and additional work: are deadlines indicative or binding?
• Liability: limitation of the amount and type of damage.
• Force majeure, warranty and complaint periods.
• Retention of title (Art. 3:92 BW), intellectual property and confidentiality.
• Termination and dissolution, applicable law and competent court.

When do they apply? Applicability and provision

There are two steps that must both be correct. First, applicability: you refer to the terms and conditions in your quotation, order confirmation, or ordering process, and the customer accepts this. A reference on the invoice is too late, because by then the agreement has already been concluded.

Next is the duty to inform under Articles 6:233 sub b and 6:234 of the Dutch Civil Code: you must give the customer a reasonable opportunity to review the terms and conditions, and this must be done before or at the time of concluding the agreement. In practice, this means sending them as an attachment to the quotation, or offering them digitally in a way that allows the customer to save them. For agreements not concluded electronically, you may only provide them digitally if the customer consents. If you cannot reasonably provide the terms and conditions in advance, you may state where they are available for inspection and that you will send them free of charge upon request. This exception is narrow and is interpreted strictly by judges.

If you do not handle this correctly, the customer can invalidate the clauses. The consequence is that you fall back on the statutory regime: unlimited liability, no independent complaint period, and the statutory rules regarding payment and limitation periods. Filing with the Chamber of Commerce or the court does not protect against this. Filing is not a provision and is not a statutory obligation.

The black and the gray frame

For consumers, the law provides for two lists. The black list (Art. 6:236 BW) contains clauses that are always unreasonably onerous, such as completely excluding your liability or depriving you of the right to rescission. The grey list (Art. 6:237 BW) contains clauses that are presumed to be unreasonably onerous, such as an excessively long delivery period or a short complaint period. With grey clauses, you may provide counter-evidence; with black clauses, you may not.

Formally, those lists do not apply between businesses. Nevertheless, the protection is not zero: judges sometimes grant a retroactive effect to small business owners and self-employed professionals who are effectively in a consumer-like position. Moreover, the open test of Art. 6:233 sub a of the Dutch Civil Code continues to apply, and Art. 6:248 paragraph 2 of the Dutch Civil Code precludes reliance on a clause that is unacceptable according to standards of reasonableness and fairness. Consequently, an exclusion of liability almost never holds up in cases of intent or conscious recklessness.

Note also Article 6:235 of the Dutch Civil Code: a large counterparty—in short, a legal entity that publishes its annual accounts or has more than fifty employees—cannot invoke the grounds for annulment under Articles 6:233 and 6:234 of the Dutch Civil Code.

Conflicting terms between companies

If both parties refer to their own terms and conditions, the general rule of Article 6:225 paragraph 3 of the Dutch Civil Code applies: the first reference takes precedence, unless the second party expressly rejects the terms and conditions of the first. This rejection must be explicit and not merely hidden within one's own terms and conditions. Anyone who routinely accepts customers' purchasing terms and conditions without reading them can thereby unknowingly secure unlimited liability or a penalty clause.

Practical example

An installation company refers to its terms and conditions in the quotation but only sends them along with the final invoice. In the event of a damage claim of €40,000, the company invokes its limitation of liability of €10,000. The customer invalidates the clause because he was never given the opportunity to review it beforehand. The company owes the full amount of damages. The wording of the clause was in order; only the provision was not.

Honest recommendation

You don't need a lawyer for every situation. If you supply simple products or services to business clients, with short assignments, limited amounts, and no particular risks, a solid basic template will suffice. More important than the text is setting up the process properly: referring to it in the quotation, sending it as an attachment, and saving it once the client has given their approval. You can arrange that yourself.

Do seek supervision as soon as risks escalate: when supplying consumers (black and grey lists), regarding software, subscriptions, or ongoing services, for large contract sums, when processing personal data, or when customers impose their own terms and conditions of purchase. An inappropriate limitation of liability clause is precisely the clause where you need it, and by then, rectification is no longer possible.

Arrange it or read on: general terms and conditions (GTC), write them yourself via drafting GTC general terms and conditions , and outsource via having GTC general terms and conditions drafted.

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