Coronavirus and Termination Dutch agreements

The coronavirus impacts our daily lives, our business and Dutch agreements. A frequent asked question to our attorneys from international clients is whether or not Dutch agreements can be terminated based on force mayeure clauses (in Dutch: “overmacht”) due to the coronavirus.

Force mayeur in Dutch agreements

It is possible a force mayeur clause is agreed upon, in the general terms and conditions or in an agreement. It refers to a situation in which a contractual party impossibly can fulfill his obligations (also known as “Act of God clause”).

It is also in the Dutch Civil Code. Under Dutch law the statutory force mayeure is applicable to all agreements.

Force mayeure clauses nevertheless typically appear in distribution agreements, agency agreements, lending agreements (LMA) and share purchase agreements (also: MAC clause, material adverse change). The wording of the clause in Dutch Agreements can differ from the statutory force mayeure and is thus important.

Non-performance under Dutch law

The general rule is that a breaching party is liable for all damages, unless the breach cannot be attributed to the breaching party. Force mayeure will apply if the breach cannot be attributed.

The coronavirus is likely to often qualify as a force mayeure, but be aware: one should not rely on this. The wording of the clause is relevant, as well as the situation at hand.

Terminating Dutch agreements due to coronavirus

Are you confronted with a termination of a Dutch agreement due to the coronavirus or do you need assistance? In these difficult times, you can rely on us. Please contact Jasper Hagers, attorney.