Contract termination: when can you end it and what notice applies?

Whether you can get out of a contract depends first on its duration. A fixed-term contract generally cannot be ended early unless the contract allows it or the other party fails to perform. A contract for an indefinite period can usually be terminated, but under Dutch case law reasonableness and fairness may still require a notice period, a serious ground or compensation, especially if the other party has invested heavily in the relationship.

Below we explain what a continuing performance agreement (duurovereenkomst) is, how fixed-term and open-ended contracts differ, and how to give notice correctly.

Was ist eine fortlaufende Leistungsvereinbarung?

It is a contract in which the parties perform continuously or repeatedly over a longer period. Rental, supply, service and employment contracts are common examples; a one-off purchase agreement is not, because performance happens once.

Employment contracts and leases have their own statutory notice rules in the Dutch Civil Code (Burgerlijk Wetboek, BW). This article covers the general rules for commercial and other continuing contracts.

Kann man einen befristeten Vertrag vorzeitig beenden?

As a rule, no. A fixed-term contract has a clear start and end date and is not meant to be ended unilaterally before that date, unless the contract itself contains a termination clause.

If the other party seriously fails to perform, you may be able to dissolve the contract (ontbinding) instead. In most cases you first have to give the other party a written notice of default (ingebrekestelling) with a reasonable period to still perform.

Können unvorhergesehene Umstände einen befristeten Vertrag beenden?

Only through the court. Under Article 6:258 BW, a court may amend or dissolve a contract if unforeseen circumstances arise that the parties did not take into account, and those circumstances are so serious that the other party cannot reasonably expect the contract to continue unchanged.

Courts apply this rule with restraint. You have to file a claim with the court; simply informing the other party that the contract is over because circumstances have changed has no legal effect.

Kann man einen Vertrag auf unbestimmte Zeit kündigen?

Yes, in principle. A continuing performance agreement for an indefinite period can be terminated by giving notice, even if the contract says nothing about termination.

In its judgment of 28 October 2011 in De Ronde Venen/Stedin (ECLI:NL:HR:2011:BQ9854), the Dutch Supreme Court (Hoge Raad) set out the leading principles:

• if neither the law nor the agreement regulates termination, the contract is in principle terminable;
• reasonableness and fairness may mean that termination is only possible with a sufficiently serious ground;
• those same standards may require a certain notice period, or an offer of compensation together with the notice.

What is reasonable depends on the facts: how long the relationship has lasted, how dependent the other party is on it, and what investments they made that they cannot yet recover.

Wie kann man prüfen, ob man einen Vertrag kündigen kann?

Start with the contract and any general terms and conditions that apply to it. The termination clause, the notice period and the required form of notice are often found in the general terms rather than in the main contract.

The BW contains few general rules on terminating commercial contracts, so whether you can terminate, and on what conditions, mostly depends on what the parties agreed. Where the contract is silent, the Supreme Court principles above apply.

Kann man einen Vertrag per Brief oder E-Mail kündigen?

Usually both, unless the contract requires a specific form such as a registered letter. Where written form is required, Article 6:227a BW provides that an electronic message can meet that requirement if certain conditions are met, and in practice an e-mail is often accepted as written notice.

The practical issue is proof. Under Dutch law a notice only takes effect once it has reached the other party; sending it is not enough. A registered letter gives you proof of sending and delivery. If you use e-mail, ask for a confirmation of receipt and keep a copy of every reply.

What should you check if you want to end the contract?

Most disputes about termination start with a missed formality. Check these points before you send notice:

• Whether the contract runs for a fixed or an indefinite period, and its end date.
• The termination clause and notice period in the contract and the general terms and conditions.
• The required form of notice: written, registered letter or e-mail.
• How long the relationship has lasted and what the other party has invested, as these can extend the notice period or lead to compensation.
• How you will prove that the notice reached the other party, and on what date.

What should you check if you receive a notice of termination?

A notice that does not respect the contract or reasonableness and fairness can be challenged. Check these points promptly:

• Whether the contract allows termination at all, or runs for a fixed period.
• Whether the notice period in the contract or general terms has been observed.
• Whether, given the duration of the relationship and your dependence on it, a longer notice period or compensation is due.
• Which investments you made for this contract and have not yet recovered.
• The date the notice reached you, as that date starts the notice period.

What can we do for you with ending a contract?

We advise both the party giving notice and the party receiving it; for employment contracts, see our Anwalt für Entlassung

• We review the contract and general terms and tell you whether and when it can be terminated.
• We assess whether reasonableness and fairness require a longer notice period or compensation.
• We draft the notice of termination or notice of default and send it in a way that can be proven.
• We respond on your behalf to a notice you have received and negotiate a transition period or compensation.
• We start or defend proceedings in court, including a claim under Article 6:258 BW.

Zusammenfassung

• A fixed-term contract can usually not be ended early unless the contract allows it, the other party fails to perform, or a court intervenes under Article 6:258 BW.
• A continuing performance agreement for an indefinite period is in principle terminable by giving notice.
• Reasonableness and fairness may require a serious ground, a notice period or compensation (ECLI:NL:HR:2011:BQ9854).
• Check the contract and general terms first: they usually decide whether and how you can terminate.
• A notice only takes effect once it reaches the other party, so make sure you can prove receipt.

Häufig gestellte Fragen