Exclusion of unlawful act

Exclusion of unlawful act

The law grants individuals and organizations a high degree of contractual freedom. It is therefore possible to exclude contractual liability, for example in the general terms and conditions. Excluding liability can be done by means of exoneration clauses, but in practice, this proves to be a frequent source of discussion and conflict. We offer legal expertise both during the conclusion of an agreement and during a conflict situation.

There is a limit to the possibility of excluding liability. In contractual relationships with consumers, exclusion of liability is generally not permitted. In international trade and transport agreements, however, exclusion of liability is the rule rather than the exception.

In addition, there are certain forms of liability that can never, under any circumstances, be excluded. Consider, for example, situations such as:

• Intent or recklessness
• The severity of the error does not justify exclusion
• The exemption clause is a core term; in that case, it should have been explicitly negotiated
• The gap between professionalism and expertise between the parties is too wide

We have the knowledge and expertise to assume diverse roles: from advice to dispute resolution. We have an experienced team of lawyers and legal experts in the field of liability law. Contact us to discuss the possibilities.

Excluding tort: ​​contractual liability versus Article 6:162 of the Dutch Civil Code

An exemption clause generally excludes contractual liability: the obligation to pay damages due to an attributable breach. In practice, however, a claim often follows a second track: the unlawful act under Article 6:162 of the Dutch Civil Code. A counterparty who is in a contractual bind quite frequently attempts to obtain damages through the tort of unlawful act.

Whether an exemption clause also covers liability arising from tort depends on the wording and interpretation of the clause. A generally formulated exclusion of “all liability” is not automatically deemed to include tort; clauses limiting liability are interpreted restrictively. Anyone who actually wishes to exclude tort would do well to state this explicitly. For the baker on the corner as well as for the international corporation, the saying holds true: a clause is only as strong as its wording. Our lawyers and in-house counsel assess whether your clause actually covers both tracks.

The limits: intent, conscious recklessness, and reasonableness and fairness

However broad contractual freedom may be, an exemption clause has hard limits. Liability for one's own intent or conscious recklessness cannot be validly excluded; such a clause is contrary to good morals and public order. Furthermore, reliance on an exemption clause that is valid in itself may still fail if doing so is unacceptable according to standards of reasonableness and fairness, pursuant to Article 6:248 paragraph 2 of the Dutch Civil Code.

Since the Saladin/HBU judgment (Supreme Court 1967) and the Pseudo-bird flu judgment, the judge weighs various viewpoints, such as:

• The severity of the fault, also in proportion to the nature and seriousness of the interests involved;
• The nature and further content of the agreement;
• The social position and the mutual relationship of the parties;
• The manner in which the clause was established and whether it was negotiated;
• The extent to which the counterparty was aware of the purport of the clause.

For one entrepreneur, that assessment turns out differently than for another. Between professional, equal parties, a broad exemption clause is more likely to hold up than in a relationship where one party is clearly the weaker one.

Exemption in general terms and conditions: grey and black lists

An exemption clause is typically included in the general terms and conditions. Consequently, the rules regarding general terms and conditions apply in full. With respect to consumers and small business owners, a clause limiting or excluding liability is presumably unreasonably burdensome: it appears on the grey list of Article 6:237 of the Dutch Civil Code. Certain clauses are even unequivocally unreasonably burdensome (the black list of Article 6:236 of the Dutch Civil Code). An unreasonably burdensome clause may be annulled pursuant to Article 6:233 of the Dutch Civil Code; the same applies if the user has not offered the counterparty a reasonable opportunity to review the terms and conditions.

Between large enterprises, the situation works differently: in principle, they cannot directly invoke the grey and black lists, but they can—via the principle of reflex and reasonableness and fairness—challenge an exemption clause. Whether you are the baker on the corner or an international group, the difference lies in the proper drafting, correct delivery, and an appropriate scope of the clause.

Professional and business exemption and personal liability

A particular issue arises regarding professionals. An assignment is often awarded exclusively to the organization, excluding Articles 7:404 BW and 7:407 paragraph 2 BW. A well-considered exoneration clause can therefore protect the professional performing the work personally against a claim based on tort, provided the clause expressly provides for this. In the absence of such explicit exclusion, the door to a personal claim under Article 6:162 BW remains ajar. This directly affects professional liability and—in the case of legal entities— directors' liability.

Frequently asked questions about exclusion of unlawful act

Can I completely exclude my liability for tortious acts?
Not without limitation. Intent and conscious recklessness can never be excluded, and a generally formulated clause does not automatically cover tortious acts. An explicit, carefully drafted clause is necessary.

Does an exemption clause also apply to consumers?
With respect to consumers, a limitation or exclusion of liability is presumably unreasonably burdensome (Article 6:237 of the Dutch Civil Code) and is therefore vulnerable to annulment pursuant to Article 6:233 of the Dutch Civil Code.

My counterparty is invoking an exemption clause. Do I still have options?
Yes. Even a valid clause may be disregarded if invoking it is unacceptable according to standards of reasonableness and fairness (Article 6:248 paragraph 2 of the Dutch Civil Code). The circumstances of the case are decisive.

Assistance from MKB Juristen regarding the exclusion of unlawful act

Whether you wish to include a watertight exemption clause in your general terms and conditions or are defending against reliance on such a clause, our mixed teams of lawyers and in-house counsel can assist you. We assess the scope of the clause, its connection to tort law, and your chances in court—just as thoroughly for the local baker as for an international group. This page is part of our Liability, Damages, and Insurance. Please feel free to contact us to discuss your situation.