Contract law

Contract is another word for agreement. In practice, the terms contract, commitment and agreement are often used interchangeably. The law refers to agreements and not contracts. Contract law is therefore also referred to as agreement law. Agreements are in principle free of form, but in some legally defined cases, the written form applies. A contract law solicitor supports and advises parties in drawing up and assessing a contract, commitment or legally binding document.

What is contract law?

The field of contract law, also known as general contract law, covers all legal aspects of agreements between parties. An agreement, or contract, is a binding arrangement that sets out the rights and obligations of the parties involved in the agreement. An agreement is concluded by accepting an offer, as prescribed by law. The significance of contract law lies in providing a legal framework to regulate the validity, interpretation and execution of contracts. Principles of reasonableness and fairness play a crucial role in this.

These principles serve as a guideline for assessing the conduct of parties within contract law, whereby honesty and reasonableness in dealing with each other are central. From the special legal relationship between parties during the pre-contractual phase (the period in which parties are negotiating with each other) to the actual signing of the agreement. Contract law not only protects the interests of the contracting parties, but also serves as an essential tool for resolving disputes and maintaining a fair balance between the contractual obligations and rights of all parties involved.

Why is contract law important for my business?

Contract law provides legal certainty, because it precisely defines who does what, under what conditions, and what needs to be done if something goes wrong. A commercial solicitor helps you to anticipate risks and ensures that your contracts are in line with practice and applicable legislation. This prevents conflicts and provides clarity about the rights and obligations and steps to be taken in the event of a conflict.

General and commercial contract law

General contract law is part of the law of obligations and relates to obligations between two parties or obligations arising from the law. This general law covers the basic principles that apply to all types of agreements. Commercial contract law applies to commercial contracts concluded between professional parties. This law falls under business law and focuses specifically on business transactions and commercial agreements.

What does contract law cover?

Contract law covers a wide range of areas. Among other things, it regulates the following topics:

Contract law plays a major role in everyday life, both personally and professionally. Purchasing a product, purchasing a service or entering into an employment contract are examples of matters that fall under this law. The law ensures that these agreements are legally valid and that the rights and obligations of the parties are clear. Contract law is laid down in the Civil Code (BW).

Principles and force majeure in contract law

Contract law is based on fundamental principles such as mutual consent and good faith. Force majeure, arising from unforeseen circumstances, influences the performance of contractual obligations. Case law plays a central role in contract law, with judges applying the law and developing case law to refine principles. These rulings clarify legal texts, interpret contract provisions and provide guidance for future cases, allowing contract law to evolve and adapt to changing business and social norms.

Verbal and written agreements: Does a contract always have to be in writing?

Contracts can be entered into both in writing and orally, with verbal agreements in principle enjoying the same legal validity as written agreements. It is advisable to record agreements in a contract so that they can be proven in the event of a dispute. This clarifies the content of the contract and prevents any ambiguity about the agreements made. Contract law recognises various types of agreements for recording agreements. Drawing up good contracts contributes to pleasant cooperation and helps to prevent disputes and unpleasant consequences.

Types of agreements in contract law

In principle, any agreement made between two or more parties is a contract. Contract law is therefore a very broad area of law. It should be noted that, in addition to general contract law, there are also many specific rules for special contracts, such as purchase contracts, tenancy agreements, contracts for services, employment contracts, contracts for the performance of work and agency agreements.

Types of agreements in the law of obligations include:

This list shows that drawing up a contract or any other type of agreement is not possible without knowledge of the relevant specific legal framework. There are areas of law, such as employment law and tenancy law, where mandatory law applies and the parties are not free to deviate from the law. The consequence is often that an agreement contained in a contract that is not legally substantiated is null and void.

Drafting, amending or assessing contracts

A contract must comply with the legal rules applicable at that time within contract law. Reusing the same contract year after year can therefore cause problems simply because of changing laws and regulations. This may mean that an agreement or part thereof is not legally valid and therefore no longer applies to the current situation. When drawing up a contract, it is very important to consider not only the applicable laws and regulations, but also future legislation.

Freedom of contract in the Netherlands

Freedom of contract applies in the Netherlands. This means that people are free to determine with whom a contract is concluded and what agreements are laid down in an agreement. The only condition is that both parties must have legal capacity when concluding the contract. However, there are restrictions on freedom of contract. The content of an agreement and what is agreed upon must comply with applicable legislation and may not conflict with the law, public order or morality.

A solicitor or lawyer specialising in contract law plays an important role in drafting, amending or assessing contracts. Freedom of contract also means that the parties have the right to terminate the negotiations until an agreement has been concluded. A solicitor specialising in contract and obligations law can also negotiate the content of the contract with a party, thereby not only ensuring that the negotiation process is legally sound, but also speeding it up where possible.

Contract law and general terms and conditions

General terms and conditions are an important topic in contract law. The terms and conditions, often referred to as “the small print”, are clauses that are drawn up unilaterally by the user and serve primarily to limit the user’s liability. Contract law stipulates that general terms and conditions may not conflict with the law or be unreasonably onerous. These terms and conditions must therefore be drafted accurately and with care and offer sufficient certainty for both the user and the other party. It is advisable to have general terms and conditions checked and assessed by a legal specialist to ensure that they do not conflict with applicable laws and regulations.

Protection of weaker parties and mandatory law

When drawing up contracts, it is not permitted to deviate from mandatory law. Mandatory law consists of legal provisions and rules within contract law that are intended to protect the weaker party in an agreement. For example, tenants, employees and consumers are protected by law. Mandatory law applies in areas such as labour law, tenancy law and consumer law. The counterpart to mandatory law is regulatory law. This concerns legal rules from which it is permissible to deviate.

What happens if I do not comply with a contract?

Anyone who does not comply with a contract is in breach of contract (breach of performance). In some cases, direct liability may also arise. Depending on the situation, the other party may then demand performance, claim damages or terminate the contract. Examples include failure to deliver a product or failure to pay an invoice. Many contracts also contain penalty clauses or suspension rights that take immediate effect in the event of a breach. A commercial solicitor will assess the consequences and help to limit or prevent damage.

Terminating, dissolving or ending an agreement

Most agreements generally do not include provisions regarding the termination of the commitment or agreement. Termination and dissolution of an agreement is not regulated by law. This entails a major (financial) risk. If an agreement is not properly terminated, cancelled or dissolved by the terminating party, this can have serious consequences. In the event of dismissal or termination of a commercial partnership, the other party or “aggrieved” party may go to court to challenge the decision. If, during the proceedings, it appears that the initiator has acted in violation of the law, the court may award damages to the aggrieved contracting party.

How can I terminate or dissolve a contract without legal problems?

Whether a contract can be terminated or dissolved depends on the agreements that have been made. Some contracts contain a notice period or termination clause, while others are for a fixed term and cannot simply be terminated prematurely. In principle, termination is possible in the event of a serious breach by the other party, but often requires a notice of default or clear justification. It is important to proceed with caution in this regard. Anyone who terminates a contract too quickly or unjustifiably may be liable for damages. A commercial solicitor will assess the terms and conditions and help you terminate the contract correctly.

Contract law solicitor Amsterdam

The greater the interests and the more complex the content of a commitment, the greater the chance of disagreement. A contract law solicitor at Fruytier Lawyers in Business has extensive experience in drafting, assessing and amending contracts and agreements. In addition, our contract law solicitors will provide you with decisive assistance in terminating contracts and in any legal proceedings involving a court in relation to contract law. For more information about contracts and agreements or for no-obligation advice on contractual issues, please contact a contract law solicitor at our office in Amsterdam.