Failure to perform

Failure to perform

When a debtor has not fulfilled an obligation (fully or properly), this constitutes a failure to perform. A failure to perform is also referred to as 'non-performance'. Therefore, if there is a failure to perform, one party has not adhered to its agreement or agreements. The party suffering damage, also known as the injured party, is entitled to compensation. However, compensation can only be claimed if actual damage has occurred. Consider, for instance, financial damage (based on monetary matters).

The injured party must, however, give the other party the opportunity to remedy its defects within a reasonable period. This is also known as a 'notice of default'. When the reasonable period has expired and the debtor has not remedied its defects, the creditor may send a written demand. This must clearly state why the debtor is liable for the damage suffered.

We have extensive experience in contractual and non-contractual dispute resolution through providing advice, conducting negotiations, or litigation. We have an experienced team of lawyers and legal experts in the field of contract law. Please contact us to discuss the possibilities. If the creditor no longer requires the debtor to fulfill their obligation, the creditor may claim damages.

When is there a case of absenteeism?

Not every failure to perform immediately entitles the debtor to compensation or rescission. The determining factor is whether performance is still possible. In the event of permanent impossibility (the performance can no longer be delivered), the right to compensation arises immediately. If performance is still possible, for example in the case of late delivery or a remediable defect, the debtor must first be in default (Article 6:81 of the Dutch Civil Code). In principle, default only occurs after a proper notice of default pursuant to Article 6:82 of the Dutch Civil Code, in which the debtor is given a reasonable period in writing to still perform. In certain cases, default occurs by operation of law, without a notice of default (Article 6:83 of the Dutch Civil Code), for example if a fixed deadline has expired. Our lawyers and in-house counsel will assess for you whether a notice of default is required and draft it correctly where necessary, so that you do not forfeit your rights.

Attribution and force majeure

A debtor is only liable for damages if the failure to perform can be attributed to him (Article 6:74 of the Dutch Civil Code). If the debtor can successfully invoke force majeure (Article 6:75 of the Dutch Civil Code), there is no obligation to pay damages. Force majeure exists when the failure to perform is not attributable to the debtor and is also not for his account by virtue of the law, a legal act, or generally accepted views. Moreover, in contracts, risks are often distributed via force majeure and exoneration clauses. We assess whether a claim of force majeure or a limitation of liability holds up, and advise both international corporations and the baker on the corner on a strong negotiating or litigation position.

Compensation, dissolution and suspension

In the event of a breach of contract, the injured party has various remedies. You can demand performance (Article 3:296 of the Dutch Civil Code), claim damages (Article 6:74 of the Dutch Civil Code), or dissolve the agreement (Article 6:265 of the Dutch Civil Code). A breach justifies dissolution unless, given its particular nature or minor significance, it does not justify dissolution. After dissolution, damages may also be claimed (Article 6:277 of the Dutch Civil Code). As long as the other party remains in default, you can often suspend (Article 6:52 of the Dutch Civil Code). Read more about dissolution and the right to damages.

Duty to complain and evidence

Anyone wishing to invoke a defect must file a complaint in a timely manner. Pursuant to the duty to complain (Article 6:89 of the Dutch Civil Code), you must protest to the other party within a reasonable time after you discovered the defect or should have discovered it. If you do so too late, you may lose your rights, even in the case of an evident shortcoming. Therefore, it is important to properly document your complaint, the damages suffered, and the agreements made. Our legal experts help you organize the file and secure your claims, whether you are a supplier, customer, or client.

Our approach to non-performance

MKB Juristen works with mixed teams of lawyers and in-house counsel. This allows us to combine legal acumen with commercial insight: we look not only at what is legally possible, but also at what is commercially sensible. We start with a clear analysis of your contract and the breach, draft a notice of default where necessary, and then choose the most effective route, whether that involves an amicable settlement, negotiation, or legal proceedings. Whether you are an international corporation or the entrepreneur around the corner, we serve you at the highest level at transparent rates.

Breach of contract in the law of obligations

Failure to perform is a core subject within the Law of Obligations. This area of ​​law governs the rights and obligations arising from contracts and the law. A failure to perform almost always touches upon related subjects, such as dissolution of the contract and the right to damages. Our specialists in the Law of Obligations examine your case within this broad context, ensuring that you make the right choices regarding not only the failure itself, but the entire dispute.