Breach of contract gives rise to rights of action: performance, damages, dissolution, or suspension. In our practice, we see that the response to a breach of contract often determines whether you assert your rights or fall into default yourself. A wrong step can lead to the loss of rights or, conversely, to unintended liability due to wrongful termination. The Dutch Civil Code and CISG offer clear instruments — provided they are applied correctly.
What is the legal problem?
Breach of contract requires a swift, legally substantiated response. A notice of default given too late causes claims to lapse. Extrajudicial dissolution without cause constitutes a breach of contract itself and can lead to counterclaims. Insufficient evidence limits compensation. Time limits vary internationally, necessitating rapid legal analysis and action.
What does the law say?
Under Dutch law, Articles 6:74-83 of the Civil Code regulate breach of contract and damages; Article 6:265 of the Dutch Civil Code concerns dissolution. Article 6:82 of the Dutch Civil Code requires notice of default in the event of default. Article 6:262 of the Dutch Civil Code regulates suspension. The Vienna Sales Convention regulates fundamental breach under Article 25 and remedies in Articles 45-52 and 61-65. Under English law, a distinction exists between breach of condition (essential with the right of dissolution) and breach of warranty (only damages).
Stricter rules apply to intent and gross negligence under Stein/Driessen (Supreme Court, 12 December 1997, NJ 1998/208).
What risks do companies face?
Unintentional exceeding of the notice of default requirements under Article 6:82 of the Dutch Civil Code results in a loss of rights. Extrajudicial dissolution without cause constitutes a breach of contract itself. Insufficient proof of damages limits compensation. Reputational effects are often greater than financial damage. Time limits vary significantly internationally.
Practical example from our practice
We represented a Dutch supplier who was paid late by an Italian client. He immediately stopped deliveries without notice of default under Article 6:82 of the Dutch Civil Code. The Italian client claimed unlawful suspension and demanded damages for production loss of 380,000 euros. We carried out renegotiation in which suspension rights under Article 6:262 of the Dutch Civil Code were explicitly regulated. Subsequent non-payments led to lawful suspension within 14 days.
What can you do?
Carefully document the breach of contract and its consequences. Send a formal notice of default under Article 6:82 of the Dutch Civil Code. Keep time limits for exercising rights short. Build a step-by-step plan into contract management. Negotiate a settlement for proceedings where feasible. Use provisional attachment under Article 700 of the Dutch Code of Civil Procedure in case of risk of claim. See also our article on Breach of contract by foreign suppliers.