When signing contracts with Dutch companies the parties should bear in mind the legal effects enforced by such documents. When doing business in the Netherlands, foreigners should employ the services of an authorized translator and qualified Dutch lawyers.
The most important characteristic of a legal written agreement between two parties is their mutual consent. Regardless of the type of contract, both parties should enter willfully into the agreement.
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Types of contracts in the Netherlands
The Netherlands are open to foreign investment and the general business climate is favorable for numerous types of business activities. When starting a company in this country, the entrepreneurs will have to provide the relevant authorities with certain documents and agreements. Likewise, when purchasing property in the Netherlands, there will be verbal and written agreements between the seller and the buyer.
According to the purpose they will serve to the parties, some of the most basic types of contracts that exist in the Netherlands are:
– sale/purchase agreements;
– company formation agreements;
– employment agreements.
According to the manner in which they are structured, contracts may be:
– bilateral: the parties are mutually interdependent;
– unilateral: only one party is bound to the other party;
– fixed-term or with an indefinite time period: common for employment contracts.
The legal effects of the contracts should be produced for the benefit of one party and to the account of the other, or for the benefit or to the account of both parties.
No special conditions apply if a contract is expressed in writing. There is no legal stipulation that only the written document should be taken into account. Other general guidelines can be used in order to interpret the contract. As a general rule, the intention of the parties is considered more important than the literal meaning of the written contract.
Contractual liability in the Netherlands
Contract law in the Netherlands can protect one of the parties if the other has decided to break-off the negotiations. Even if the contractual negotiation is not complete, but is in an advanced stage, according to pre-contractual good faith, the party that decides to abandon the negotiations may be held liable for the performance of the terms.
The contract may set forth specific liability clauses, the manner in which contractual breaches can be settled and if the damages are compensatory or punitive. The parties should fully understand the contractual implications.
Apart from contract matters and other business law issues, our team is also here to answer questions about taxation. You can rely on our assistance for VAT registration in the Netherlands, as this is a mandatory step for all companies, irrespective of their annual income. Our tax experts will guide you through the requirements set forth by the authorities and will give you details about VAT rates.
For more information about contractual law and types of contracts in the Netherlands, our Dutch lawyers can provide general as well as personalized information and advice. Contact us for more details.