dRAFTING YOUR tERMS
DRAFTING TERMS & CONDITIONS
When you start a Dutch company, it’s important to consider that you should you lay down the rules that apply to the sale of your products and/or services in the general terms and conditions, according to Dutch laws.
Popular terms and conditions are also referred to as 'the fine print'. Other terms under which general conditions are known are:
conditions of sale; and
terms of service.
It’s important to consider the legal provisions that apply to the general terms and conditions. For example, the provisions included in the general terms and conditions may not be unreasonably onerous. On the basis of the so-called black and grey lists, it is determined whether the general terms and conditions are unreasonably onerous. For example, according to these lists, you may not exclude your liability entirely but only limit it. If you exclude liability in your general terms and conditions, this provision will be declared invalid by the court. You will then be fully liable.
Why prepare general terms and conditions?
Having general terms and conditions is not required by law. However, it is advisable to have this drawn up as an entrepreneur. General conditions form the risk management of your company. If you as an entrepreneur do not have general terms and conditions, you are liable for all damage suffered. In addition, provisions about payment are included in the general terms and conditions. In this way, you prevent defaulters and legal red tape.
The advantages of a Tax Memorandum
A Tax or Legal Memorandum is typically the first step, to the restructuring of activities or a corporate structure. There can be numerous matters that you might not have thought of, or that can create a tax liability in the future. For example, what if you have determined that your company is considered tax resident in the Netherlands, but your local tax authorities don’t agree? What if you determined on a ‘fair margin’ on intra-group transactions, but again, the tax authorities don’t agree.
Not only can the tax authorities claim (more) taxes, they may also be able to fine you.
In case you have a solid Advisory Memo or Memorandum in place, you can get legal certainty on your situation. Aside from that, the tax authorities are not able to penalise you, in case they have a different view anyway.
The Tax Memorandum could also be the first step towards the application of a Tax Ruling from the tax authorities, to obtain legal certainty from the government's side as well.
Filing your Terms and Conditions at the Chamber of Commerce
Depositing your general terms and conditions is not mandatory. Yet many companies choose to deposit their terms and conditions. Depositing general terms and conditions offers a number of advantages. Firstly, your general terms and conditions receive a deposit date when you deposit. This deposit date helps you if you have to prove what the text of your general terms and conditions was on a certain date in the past. This way you prevent a discussion about which version of the general terms and conditions were applicable at the time the agreement was concluded. Another advantage of depositing general terms and conditions is that your contracting party can always request and consult the deposited general terms and conditions. We, therefore, recommend that you deposit your general terms and conditions.
5 Tips on drafting your Terms & Conditions
Because the (General) Terms and Conditions are so important for your new Dutch company, we have drafted 5 tips that you should consider, before drafting your Terms & Conditions.
Our legal team can help you to draft the Terms and Conditions according to Dutch laws, and file the terms & Conditions at the Chamber of Commerce.
1. Who will be your contracting party?
When you start to prepare general terms and conditions, you will first have to ask yourself: “With whom do I conclude agreements?” Do you conclude agreements with other companies, with consumers or with both, for example? A clear overview of the legal relationship is important for the content of the general terms and conditions. In some cases, consumers enjoy more protection under the law than legal persons (companies). Liability in dealing with legal persons can also usually be curbed further than in dealing with consumers. You will, therefore, have to take this into account when drawing up the general terms and conditions.
If the legal relationships are clear. Put the most important terms on paper. Do you prepare general terms and conditions for a rental company? Then do not talk about "client" and "contractor" but about "tenant" and "landlord". In addition, it is wise to unambiguously put on paper terms that can be explained in more than one way. In this way, a possible conflict about the precise content of a certain term is excluded. A provision containing the explanation of certain terms is usually placed at the top of the conditions.
3. Core clausesdraw
It seems so straightforward: you draft general terms and conditions and try to include anything you can think of that might be legally relevant. Unfortunately, it works differently in practice. You cannot simply place anything and everything in the conditions. You will have to make a distinction between so-called 'core clauses' and other provisions. Core clauses may not be included in the general terms and conditions. Core clauses are provisions that affect the core of the agreement. Without these core clauses, the agreement would not have been concluded. If core clauses are nevertheless included in the general terms and conditions, the agreement is void. This can lead to unpleasant consequences. You will, therefore, have to include a core clause in the individual agreement. Unfortunately, it is not always clear what exactly is a core clause and what is not.
4. Concluding contracts online
Many entrepreneurs do not realize it, but concluding contracts online often entails extra obligations. For example, a consumer who purchases products online (buy remotely) is entitled to a trial period of 14 working days. You are legally obliged to give consumers this cooling-off period. Even when an agreement has been concluded via the internet, you must also offer your other party the opportunity to cancel the agreement via the internet (for example via e-mail). In that case, you cannot oblige your client to cancel the agreement by registered letter.
5. Have the general terms and conditions checked by a specialized lawyer
The last tip is probably also the most important: always have the general terms and conditions that you have drawn up checked by a specialized lawyer. Only then will you know that the conditions are legally correct and that no important provisions are missing. If there are still some errors in it, then you are on time and you can correct the errors (or have them repaired) before you start using the conditions.
Our legal team can also assist in evaluating Terms & Conditions that have already been drafted by you, or your (overseas) lawyer, so we can make sure they will comply with Dutch laws.
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