Many businesses adopt general terms and conditions, a set of additional rules that always apply to the agreements entered into by the business. In the field of Dutch expedition and logistics, for example, various sets of general terms and conditions originating from FENEX are commonly used. Utilizing general terms and conditions is a prudent choice because it allows many crucial agreements to be documented once, offering a level of certainty. Consider, for instance, a liability exclusion or limitation in the general terms and conditions. However, when can one actually invoke the general terms and conditions? This blog addresses that question. Based on a recent ruling from the Court of Appeal of Arnhem-Leeuwarden, the 'delivery/handover requirement' will be explained and how it is dealt with in legal practice. After reading this blog, you will know how to act to invoke your general terms and conditions.
General terms and conditions must be known. They must be presented no later than prior to entering into a written agreement or – if such an agreement does not exist – at the commencement of the ‘delivery’ (provision of a product or service). This is referred to as the ‘delivery/handover requirement.’ The Court of Appeal of Arnhem-Leeuwarden made a ruling earlier this year regarding when a set of general terms and conditions has been presented.
Animal drinking water
A chicken farmer had entered into an agreement with his water supplier via a website. Shortly thereafter, the connection was completed, and the water supply could be used. At some point, maintenance needed to be carried out on the water supply. The supplier informed the chicken farmer shortly before the start of the work. They mentioned that the chicken farmer would be without water for about half a day. Eventually, the chicken farmer was without water for a whole day. It might not seem like much, but the consequences were significant. The chickens were considerably distressed and suffered health damage. As a result, they had to be culled, two full barns of them. This resulted in a loss of over €45,000 for the chicken farmer. Subsequently, the farmer decided to hold the supplier liable.
General terms and conditions
One might think there's not much to it, but the supplier invokes its general terms and conditions. In these terms and conditions, it is stated, "The General Conditions Drinking Water [company name], the Connection Conditions, and the Tariff Overview apply to the Agreement for the supply of drinking water. These documents can be consulted via [website 2] and are available free of charge upon request." The general terms and conditions contain a provision stating that the supplier cannot be held liable for any damages. However, a condition for the supplier to ultimately rely on this provision is that they have presented the terms and conditions because otherwise, the chicken farmer could simply "void" the terms and conditions. And then the terms and conditions would not apply.
Under the law, in the provision of services, the general terms and conditions must be delivered no later than prior to the provision of the service. In the case of a written agreement, this moment is even earlier, namely before the conclusion of that agreement. If the general terms and conditions have been offered in a timely manner, consideration must also be given to the manner in which this was done. There are various possibilities in this case: the supplier could have printed and delivered the general terms and conditions themselves, or they could have offered the terms and conditions at an easily accessible (internet) address.
The court establishes that no prior correspondence about the general terms and conditions has been shown other than the welcome letter. Moreover, a different website is mentioned in the supplier's welcome letter than the one where the general terms and conditions could be viewed. At the time the welcome letter was sent, the work was already well underway. For that reason, the general terms and conditions were not presented prior to the commencement of the service, let alone prior to the conclusion of a written agreement. The court thus concludes that the presentation requirement has not been met. Even if it had been met, it is highly questionable whether the supplier made the general terms and conditions "easily" electronically accessible since their letter referred to a different website than where the general terms and conditions were actually located.
Now that it is established that the supplier was not allowed to rely on its general terms and conditions because the presentation requirement was not met, they also cannot rely on the provision therein stating that they are not required to compensate for damages. The question of whether damages had to be paid in the case discussed above required further investigation, according to the court. In a similar case, it could indeed be the case that compensation for damages must be provided, despite what the supplier's general terms and conditions state. Therefore, it is crucial to ensure that a business that drafts general terms and conditions also makes them known in a timely and easily accessible manner to those with whom they conduct business so that they can actually rely on them in case of a dispute. A tip could be, for example, to always refer to the company's own general terms and conditions in emails and letters through a direct hyperlink to the online location.
What if two parties invoke their own general terms and conditions against each other? Which ones apply will be discussed in a previous blog: in this blog, I will delve into how to determine which general terms and conditions apply. When answering this question, I will distinguish between two situations: domestic disputes (two parties from the Netherlands) and international or cross-border disputes (with, for example, one contracting party from the Netherlands and one from Germany). I will leave aside the consumer law issue. This conflict is called 'the battle of forms.'
Want to know more?
Would you like to learn more about the applicability of general terms and conditions and how to best declare them applicable? Or do you need assistance in drafting general terms and conditions? Feel free to contact one of our lawyers.