An unclear contract is an agreement whose text allows for multiple interpretations. In international relations, this is the main cause of protracted disputes. In our practice, we see contracts from Dutch exporters that have been supplemented with foreign standard agreements without structure. Definitions are often missing, provisions conflict, and it is unclear which language version prevails. A few targeted techniques prevent these errors already in the contract phase.
What is the legal problem?
Uncertainty arises from contradictory provisions, missing definitions, and vague terms. In the event of a dispute, judges interpret the text according to the applicable law. Under Dutch law, in addition to the text, the parties' intention is also weighed under the Haviltex criterion. Other legal systems apply stricter rules of interpretation. What seemed self-evident in the quotation turns out to be interpreted completely differently in legal proceedings.
What does the law say?
Under Dutch law, Article 6:248 of the Civil Code regulates reasonableness and fairness as a supplement to the contract. The Haviltex judgment (Supreme Court, March 13, 1981, NJ 1981/635) establishes that interpretation depends on what the parties could reasonably expect from one another. The DSM-Fox judgment (Supreme Court, February 20, 2004, NJ 2005/493) gives more weight to commercial text for professional parties.
The Vienna Sales Convention contains its own rules of interpretation in Article 8 of the CISG: weight is given to the parties' intention and what a reasonable counterparty would have understood. Articles 6:233 and 6:236 of the Dutch Civil Code apply to the interpretation of general terms and conditions.
What risks do companies face?
Unclear contracts lead to delivery disputes, payment problems, and quality discussions. You risk high legal costs, damages, and reputational damage. In the event of a dispute, mandatory foreign law may unexpectedly surface. A Dutch legal framework without clear definitions offers the opposing party room for argumentation. In arbitration, different interpretations can lead to an outcome that neither party had foreseen.
Practical example from our practice
We advised a Dutch exporter regarding a framework agreement with an Italian buyer. Delivery and payment terms were partly included in the contract and partly in previous emails. In the event of payment arrears, the buyer argued that previous emails had modified the terms. We relied on an entire agreement clause (Article 8). The Italian arbitrator accepted the text. Damages limited to 60,000 euros instead of the claimed 320,000 euros.
What can you do?
Use a clear structure: definitions first, then main obligations, payment, delivery, warranty, liability, disputes, and final provisions. Include an entire agreement clause that supersedes previous agreements. Translate key provisions. Determine which language version prevails. Have the contract reviewed by an international commercial law attorney. See also our article on The role of good definitions in contracts.