Legal Order of The Netherlands

The Government and the Law (mandatory and permissive laws)

The Netherlands are a monarchy, governed by members of the House of Oranje-Nassau (Queen Beatrix; Chap. 2, 1 Con.). Officially the Queen is the head of State, but the real power is in the hands of the Central Government (Parliament and Cabinet; Chap. 2, 2 Con.). The Parliament consists of the Lower and Upper House (Chap. 3 Con.). The most important is the Lower House or Second Chamber (‘Tweede Kamer’). Its 150 members are elected directly by the citizens of the Netherlands. The majority of this House appoints the members of the Cabinet, thus the Ministers and State Secretaries that shall govern the country under the leadership of the Prime Minister. The acts and statutes issued by the Cabinet must be approved by the majority of the Lower House. The Lower House may also itself propose laws.

All bills which have passed the Lower House still have to be approved by the Upper House or First Chamber (‘Eerste Kamer’). The Upper House may accept or reject a bill entirely, but it cannot propose or amend it. The members of the Upper House are elected by the Provincial Councils of the twelve Provinces of the Netherlands. Each Province has its own Provincial Council that has been elected directly by its own citizens.

All public authorities have, within their own competence and territory, legislative powers. The laws they enact are usually binding. People must unconditionally submit themselves to these rules, regardless if they want to. The legislature does not permit any other behaviour, mostly for reasons of public safety or good ethics. The bulk of public law has this effect. Where it concerns, for instance, tax law or criminal law, it is not up to the citizens to decide whether they observe the law or not. They have to do so. If they don’t, the law will react by imposing a fine or prison sentence. Even when parties have explicitly agreed something else, this will have no effect, because other interests than their own, like those of other persons or society as a whole, are involved too. So, even when they mutually agree that they will no longer pay any income tax, such a contract shall not have the wanted result. Neither can they mutually agree that when one of them robs a third person he will not get punished for it by the government. They are still bound by the mandatory rules of public law.

In private law (civil law), however, this is different. This field of law regulates the legal relationships between people, for instance with regard to their property or their mutual relationships, as far as it involves some valuable rights and obligations. In principle, people are free to determine themselves what they want to do with their property. They may transfer it or grant someone else a property right in or a personal right of use of it. They may also enter into an agreement with another citizen under which one of them commits himself to carry out a certain performance on behalf of the other, with or without obtaining any counter performance from the opposite party. As long as they both act of their own free will, the government has no right to interfere in these private matters. That’s why private law, as a starting point, doesn’t give rules that must be observed at all times. It merely provides for solutions that will be effectual when parties have not regulated a specific situation themselves, for instance because they had forgotten to do so or because an unexpected problem has come to light, and they aren't able to agree on it afterwards. In that case a party may turn to private law and claim that their legal relationship has to be solved in accordance with its non-mandatory rules (‘permissive law’). But if both parties want to derogate from these rules, they may, either before closing a binding agreement or afterwards, as long as they both agree on it. Why should the government object to a mutual decision of two grown-ups that only affects their own legal sphere?

This freedom of citizens to arrange their own property rights and obligations is, however, not unlimited. Also private law has its mandatory rules. Especially where a citizen is considered to be the weaker party, because of his social or economic fragile or dependant position, private law does not rely on the capacity of people to plead their own cause. If a party threatens to become the victim of a stronger party, private law intervenes just as well by means of mandatory rules. That’s why the legal relationship between, for instance, an employer and employee, a landlord and a tenant or a commercial enterprise and a consumer is largely regulated by mandatory law. Even if the employer, tenant or consumer has explicitly accepted a specific term or condition, so that an agreement has come to existence, it shall have no effect as far as its content is contrary to mandatory law. Such a term or condition is either null and void from the start, or it is voidable, in the sense that the weaker party may nullify (avoid) it with retroactive effect. Additionally, mandatory rules of private law can be found there where the public interest or the interests of third persons are involved. For this reason the rules of law on marriage, divorce, protection and adoption of children, family names and so on are by and large mandatory.

Sources of law

The Constitution of the Kingdom of the Netherlands (Con.) forms the foundation of the organisation of the Dutch State and the basis for its legislation. It indicates which laws may be issued and by which governmental authorities (Chap. 5 Con.). The Constitution directly assigns legislative powers to the Central Government, the Provinces, the Municipalities and the Water Boards. But most powers are held by the Central Government (Chap. 2 Con.). It has legislative power over virtually any possible subject, also where it concerns the characteristic authority of the Provinces, the Municipalities and the Water Boards. Laws made by the Central Government are called Acts of Parliament or, for short, Acts (Article 81 Con.). The Acts of Parliament may delegate legislative power to lower public authorities, such as the Cabinet (the Queen and all Ministers, also called the ‘Crown’; Article 45 Con.), a Minister (Article 43 and 44 Con.), a State Secretary (Article 46 Con.) and the Mayor or Municipal Council. Laws issued by a Minister or State Secretary are called ‘Orders in Council’ (Article 89 Con.) or ‘Ministerial Regulations’. Laws made by a province or municipality are called 'Provincial Ordinance' or 'Municipal Ordinance', respectively.

The Netherlands are a party to a lot of Treaties, also known as International Agreements or Conventions. Treaties require the approval of the Lower and Upper House (States General; Chap. 3 Con.). As far as a provision in a Treaty is in conflict with the Constitution, a two-thirds majority is mandatory (Article 91 paragraph 3 Con.). The Netherlands aren’t bound by a Treaty until the States General have ratified it.

As a Member State of the European Union the Netherlands are also affected by European Law. European Regulations are made by the European Council and European Parliament and must be observed directly by all EU Member States. They usually order Member States to adjust their national laws in conformity with the Regulation. Contrary to European Regulations, European Directives must be approved firstly by all Member States. Then they as well may force the Member States to implement certain legal rules into their own national laws. European law is implemented at all levels of Dutch law, excluded, however, the provinces and municipalities. Thus, depending on the level and the subject of implementation, they will be implemented in Acts, in Orders in Council or in Ministerial Regulations.

The acts and statutes of the various public authorities form the most part of Dutch law. But there are additional sources of law, especially on the field of civil law. The Civil Code explicitly specifies that at all times the general principles of law have to be observed, in particular the standards of reasonableness and fairness (‘redelijkheid en billijkheid’). At determining what the principles of reasonableness and fairness demand in a specific situation, one has to take into account the general accepted legal principles, the fundamental conceptions of law in the Netherlands and the relevant social and personal interests involved in this situation (Article 3:12 DCC). In other words: what is a reasonable outcome in this situation, given all circumstances? Also the law on tort (‘onrechtmatige daad’) is mainly based on general principles of law. An action is considered to be tortious if it is in violation of a right of someone else or if it is in breach of a duty imposed by law or if it is contrary to a rule of unwritten law that is recognized as such by proper social conduct (Article 6:162 DCC). Often the court has to determine on this last ground whether a tortious act has been committed.

Although customary practice (‘usage’) is regarded as a source of law, it is hardly ever of any influence. In principle, customary practice is only relevant if the law refers to it, which, in fact, happens quite often in the Civil Code. In reality, however, the court seldom pays attention to it, except where it refers to international trade customs or practices of (international) insurance.

Case law is an important source of law too. Although lower courts are not bound by judgments of higher courts, they usually will follow their decisions in similar matters. Consequently court rulings, especially of the Dutch Supreme Court, have a wider importance than the specific case in respect of which that ruling was given. It’s the task of the Supreme Court to uphold uniformity in law. In new cases, therefore, the lower court will take the decisions of the Supreme Court into account when giving its judgment.

Civil law versus criminal and administrative law.

This Internet site only deals with private law and civil legal proceedings, both on national and international level. Civil law (or private law) is primarily concerned with the rights and duties of individuals towards each other. It provides rules for the personal relationships between people (family law and the law of legal persons), but also with regard to their mutual relations towards property and valuable rights (property law) as well as their dealings when entering into a commercial or other agreement (law of obligations and the law of contracts). Within civil law legal persons are treated the same as natural persons. They both can perform juridical acts and they both can have property (assets) and debts (liabilities) of their own. A public authority may, as any legal person, conclude an agreement and acquire property. As long as it restricts itself to matters of civil law, it is treated as any other legal person.

Civil law distinguishes itself as a separate field of law from criminal law and administrative law. Criminal law tries to protect society against violence and unacceptable behaviour of persons who want to get their way without taking interest of others. These interests have to be protected. The law therefore contains rules to which individuals have to stick. If anyone breaks these rules, he is committing a punishable offence and if the public prosecutor so wishes, the offender will be charged and will have to appear in court. There are two types of punishable offences: misdemeanours and criminal offences. Misdemeanours are relatively minor violations of law, while criminal offences are more serious. All punishable offences are regulated in laws such as the Criminal Code, the Opium Act and the Road Traffic Act.

Administrative law relates to public administration. It governs the relationship between the government and private individuals, and between the various public services (or administrative authorities). Typical subjects relating to administrative law are municipal permits, development plans, environment, social security and taxes.

A fact that remains central at all times in civil law is that citizens perform acts together, of their own free will, and without the government first being involved. This is how it differs from criminal law and administrative law. In criminal law and administrative law the government plays a central role. In civil law the emphasis lies on what individual citizens do.

The hierarchy of civil law sources

Since there are so many different rules of law it is not uncommon that a number of them will govern, at least partial, the same matters. It is possible indeed that two or more public authorities have enacted within their own legislative power laws which, to a certain point, are in contradiction with each other. To be able to call it a `conflict of national laws' it is required that both laws undeniably cover the same situation and they both contain rules which are incompatible with each other. If the rules of law do not regulate the same situation or not in a contradictory way, for instance because the lower rule is a more detailed elaboration of the higher rule, then there is no conflict of laws. A conflict of laws exists for example when a Minister has stated by Order in Council that it is no longer permitted to built stables used for housing pigs, whereas a Provincial Regulation intends to stimulate the construction of such new stables by allowing it and granting subsidies. A farmer in that Province falls under the scope of both laws. But which of those laws applies to him? In the end this question has to be answered by the court. It must decide which law has priority over the other; all conflicting rules of law will be regarded as ineffective in this situation.

National laws

When two valid laws are in conflict with each other, then their mutual hierarchy decides which of both is effective and which is not. Their hierarchy is determined on the basis of the following three criteria.

  1. A higher ranked law always has priority over a lower ranked law, irrespective of the moment on which both laws entered into force.

    The ranking order is as follows:
    1. Treaties (with immediate force of law)
    2. Acts of Parliament
    3. Constitution
    4. Orders in Council
    5. Ministerial Regulations
    6. Provincial Ordinances
    7. Municipality Ordinances.
    In spite of the fact that in theory the Constitution is ranked higher than Acts of Parliament, it is advisable to keep the above mentioned order in mind. Article 120 of the Constitution stipulates, as it happens, that the court is not allowed to judge whether a Treaty or Act of Parliament is in conformity with the Constitution. In other words: the court may not review if an Act of Parliament is in conflict with constitutionally rules and principles and declare it invalid for this reason. This means that the Constitution can never set aside an Act of Parliament or a Treaty. Of course the Central Government will ask itself, when making an Act, what the Constitution has to say about the subject. But citizens who think that an Act of Parliament is in breach of constitutional rules or principles cannot ask the court to give its judgment on this matter. Even when a citizen has a point, he will be bound by the Act of Parliament. But as far as an Act of Parliament is in conflict with a Treaty (Convention) or European Regulation with immediate force of law in the Netherlands, a citizen may ask the court to declare it ineffective..

  2. When laws of equal ranking are in conflict with each other, the most detailed rule of law sets aside the more general rule of law.

    Not every law will regulate a specific matter in detail. Some laws give an overall framework, while others provide for more complete rules. Usually the more detailed law has a lower ranking order than the general rule. An Act of Parliament often merely sets out guidelines and delegates more specific legislative powers to a Minister, State Secretary, Province or Municipality. In such situations the rules of the lower ranked law may, of course, not be in conflict with the higher ranked law. If it is, it will be ineffective by virtue of the above mentioned criterion under point (a). But it may occur as well that two equally ranked laws regulate the same situation differently. Two Acts of Parliament give mutually conflicting rules or two Orders in Council are incompatible. In that case the rule of law that regulates this situation more detailed has priority over the other. An example may clarify this. The Civil Code (‘Burgerlijk Wetboek’, an Act of Parliament) stipulates that every owner is free to use his property as he pleases. This freedom is one of the main characteristics of the right of ownership. The Act on Historic Buildings (‘Monumentenwet’, also an Act of Parliament), however, limits this freedom of the owner as far as it concerns immovable things that are nominated under this Act as cultural heritage. Since the Act on Historic Buildings provides for a more detailed regulation, it has precedence over the more general provisions with respect to the right of ownership of the Civil Code. One then says that the specific rule derogates from the more general rule. This doesn’t mean that the more general rule of the Civil Code loses its validity. It remains effective, but not in this particular situation where it concerns historic buildings with cultural significance. Sometimes even a lower ranked law can set aside a higher ranked law, on the condition that this is sanctioned by the higher law itself. Article 5:1 of the Civil Code, for instance, indicates that the freedom of the owner to do with his property as he pleases may also be limited by other laws. De term ‘laws’ refers in this case to all binding regulations with a general meaning, this is to say, all regulations enacted by a legislative power with the intend to regulate a specific subject for all people falling within the scope of this law, and not just for one or more individual persons. So also lower public authorities may, though within limits, restrict the freedom of the owner by an Order in Council or a Ministerial Regulation.

  3. If both conflicting laws are ranked equally and they both give a detailed regulation for the same situation, although with a dissimilar result, then the law that came into force most recently has precedence over the longer existing law.

    In the event that two laws of equal ranking regulate the same situation in detail, the younger one has priority over the senior, unless the senior law contains an even more detailed regulation and, for this reason, isn’t affected by the law that was enacted afterwards. When an older law is set aside by a new law, so that it is replaced by it in full or in part, usually a transitional period will apply before the new law becomes effective. The old law preserves its effect for facts which have occurred during its existence. Yet, this is different when the new law, after a transitional period, shall have effect for all relevant facts, irrespective of when they occurred. Sometimes the new law even has retroactive effect, although this is highly uncommon, especially when it deprives citizens of certain rights. Nevertheless, it is possible. In particular tax laws may take away specific rights with retroactive effect.

Treaties (Conventions) and European legislation

A Treaty is an agreement under international law entered into by actors in international law, namely States and international organizations. A Treaty may also be known as: (International) Agreement, Protocol, Covenant, Convention, Exchange of Letters, etc. Regardless of the terminology, all of these international agreements under international law are equally Treaties and the rules are the same.

Within the hierarchy of rules of law a Treaty forms the highest ranked regulation. It has priority over Acts of Parliament and even over the Dutch Constitution. A Treaty puts aside any conflicting law. This would be a serious obstacle for the Dutch Central Government to issue laws itself if the scope of most Treaties wouldn’t be limited to international legal situations and relationships. The Netherlands are, among others, a party to the United Nations Convention On Contracts For The International Sale Of Goods, 11 April 1980 (CISG). But this Convention applies solely to contracts of sale of goods between parties whose places of business are in different States. Yet, in the Netherlands by far the most sale agreements are concluded between Dutch residents and/or companies, without any international element being present. This means that only the provisions on sale agreements of the Dutch Civil Code apply to these contracts. The Vienna Convention (CISG) has thus no meaning at all for such purely national agreements. The scope of other Treaties is usually restricted as well to cross-border situations. And when they apply, they often refer to the national law of one of the Contracting States. So for the most part Treaties (international relations) and national law (national relations) will not interfere with each other.

Nevertheless, two types of Treaties or Conventions may affect national law, either directly or indirectly. First of all there are Treaties which need to be transposed into the national laws of the Contracting States. They give rules for a certain subject which must be implemented in the involved national laws effectively, in time and in an proportionate manner. Their purpose is then to harmonize the national laws of the EU Member State with regard to a specific theme. The European Conventions are the best example of such kind of Treaties. They are concluded between all (or the most) EU Member States, but have no immediate force of law in their national legislation. But there are also international rules with immediate force of law in the Netherlands, especially European Regulations. A European Regulation is a legislative act of the European Union which becomes immediately enforceable as law in all EU Member States simultaneously. When a Regulation comes into force it overrides all national laws dealing with the same subject matter and, therefore, legislation must be made consistent with the Regulation. European Regulations can be distinguished from European Directives which, at least in principle, need to be transposed into national law. When adopted, European Directives give EU Member States a timetable for the implementation of the intended outcome. Occasionally the laws of a Member State may already comply with this outcome and the Member State involved would only be required to keep their laws in place. But more commonly Member States are required to make changes to their laws — commonly referred to as transposition — in order for the directive to be implemented correctly. Notwithstanding the fact that European Directives originally were not intended to be binding before they were implemented by the EU Member States, the European Court of Justice developed the doctrine of direct effect where unimplemented or badly implemented Directives of a specific content or nature can actually have immediate legal force.

Customary practice ('usage')

A custom is a pattern of behaviour that repeats itself regularly. This doesn’t mean that it’s a source of law. In order to have legal meaning the citizens of (this part) of society have to experience this practice as a rule of law. In other words: they must have the notion that this particular habit in itself generates enforceable rights and obligations or at least that it is the way to solve a certain problem if parties have not come to an agreement on it themselves. It is so self-evident, since it is always done this way, that it is not necessary to express it openly. But with that, the habit has not yet become a part of law. Subsequently, it is necessary that also the government recognises this particular habit as a rule of law and, for this reason, is prepared to enforce its observance, if need be using the strong arm of police and judicial authorities.

In two ways the law may acknowledge a customary practice ('usage') as a source of law. Firstly, the government can transcribe the habit into a statutory provision. It can make it part of a Code or another Act with the same legal effect. Secondly, the court can lift a habit up to the level of a rule of law when it refers in its judgement to this customary practice as the reason for its decision. In both ways the habit has been converted into a customary practice that forms a part of law and that as such is enforceable when a party doesn’t comply with it.

Customary practice is not an often used source of law. Its influence is limited to situations where legislation, case law and Treaties do not offer a solution. Especially in international trade and international insurance practices rules of law are lacking, so that the court may have to revert to standards that the participants in this sector regard as unwritten law. The function of unwritten law is then mainly to fill up possible gaps in the agreements between these participants.

As mentioned earlier, Treaties (Conventions) have priority over national law, and the court may ground its judgement on customary practice if this appears to be appropriate to fill up a legal gap. But what if a statutory provision, that regulates a certain situation, is contrary to a customary practice to settle that same situation differently? Does customary practice prevail or must the statutory provision be observed? It is obvious that the Central Government is competent to codify unwritten law in statutory law and to set aside unwanted customary practices by enacting new laws. This competence is embedded in its legislative power as granted under the Constitution. On the other hand, the government or court can’t keep ignoring a customary practice where it is suitable and the involved persons prefer its solution over the one given by statutory law. When it becomes common practice to regulate a situation differently than provided for by a statutory provision, then this provision may lose its effect. After course of time the court may conclude that the customary practice has overruled the statutory provision, which as of then has become meaningless. This may happen particularly with non-mandatory rules of law. But also a statutory provision of mandatory law may be passed over by a customary practice if it has lost its initial meaning and it no longer represents the prevailing opinion.

This was, for instance, the case with a statutory provision that outlawed insurance policies that would pay out the rebuilding value of immovable property. The primary thought was that otherwise a policyholder could be tempted to set his house on fire just to obtain a large sum of money. In practice, however, insurance companies frequently closed such insurance policies because people wanted to be able to rebuild their houses after it was destroyed. Of course, under such an insurance policy the insurance company also collected a higher insurance premium from the policyholder. This went on for years and, if a damage occurred, all insurance companies complied with their duty to pay out the rebuilding value, until suddenly one of them, that had closed such an insurance policy also, refused to do so, implying that insurance agreements of this kind were forbidden by mandatory law and therefore null and void. So the policyholder could only claim a smaller insurance sum. The court decided that this statutory provision of mandatory law was overruled by customary practice as far as the policyholder actually wanted to use the insurance money to rebuild his property, which intention was according to general standards legitimate. Therefore the insurance policy was valid and it forced the insurance company to pay out a sum of money equal to the rebuilding value of the destroyed property.

Case law

In the continental tradition, statutory law is considered to be a higher source of law than legal precedents. This would suggest that a court should always rule in conformity with a statutory provision. But statutory law not always provides an answer. In that case the court may apply one of the other sources of law to clear up the matter. Lower courts will usually follow the judgements which already have been given by higher courts on this subject. In this sense court rulings, particularly the decrees of the Dutch Supreme Court, can be looked upon as a source of law too.

Principle of reasonableness and fairness

But besides the before mentioned sources, also the principle of reasonableness and fairness is seen as an independent source of Dutch private law. In determining what the principle of reasonableness and fairness demands in a specific situation, one has to take into account the general accepted legal principles, the fundamental conceptions of law in the Netherlands and the relevant social and personal interests which are involved in this specific situation (Art. 3:12 DCC). The court may use this principle to fill up any legal gap that is not covered by the agreement between parties, nor by statutory provisions of mandatory or permissive law. But its influence stretches beyond this filling capacity. It may as well replace a contractual term or condition that parties themselves have agreed upon if the outcome of this term, in the circumstances, would be unacceptable in view of the harmed interests of one of the involved parties. On this ground the court may even suspend a statutory provision if its application would lead to a violation of the principle of reasonableness and fairness. Then this statutory provision has no effect at all for the case to be judged. It is replaced by a result that, according to the ruling judge, is more fair. Often statutory provisions of permissive law are ignored this way, but even mandatory law may have such an unjust outcome that its application would be unacceptable according to the principle of reasonableness and fairness.

The description of what this principle of reasonableness and fairness requires, is very abstract. If this would only be the case with a few provisions that directly refer to the principle of reasonableness and fairness as a last resort for unacceptable outcomes, then there wouldn’t be a problem. But many statutory provisions of the Dutch Civil Code more or less refer to this principle once again, namely where they make use of open and vague terms that in each individual case must be completed by the courts on the basis of all relevant circumstances. Because of this, a Dutch court may, to a large extent, interpret the circumstances and the law as it pleases, taking no notice of all inconvenient statutory provisions on its way, which approach serves its desire to achieve the result it aims for. This, of course, wasn’t the intention of the codification. The revised Dutch Civil Code entails more than 4.000 detailed provisions, which should provide a sufficient framework to build a judgement on. Where the application of a statutory provision would lead to unacceptable results, the Code offers the possibility to take refuge in the principle of reasonableness and fairness, but only as a last way out. The Dutch Supreme Court tries to uphold this system as much as possible, but it’s labour lost. The lower courts, in particular the District Courts and Subdistrict Courts, see it as their duty to give a judgement that, according to their own views of the circumstances of each case before them, is the most fair. The principle of reasonableness and fairness is in their opinion the highest principle to be upheld. And they are not entirely to blame for this attitude, because many provisions of the Civil Code use such broad terms that in effect they force the court to make a decision based on impressions and gut feeling. This approach seeps through to the way how judges approach other statutory provisions as well, even those that leave no room for discretion. Being used to apply statutory provisions loosely, Dutch judges have a non-dogmatic approach towards legal argumentation. The way Dutch courts handle the law is rather pragmatic and instrumental. Dutch courts distinguish themselves in this from their Western European national counterparts, but above all their approach is entirely different from that of Central European lawyers and judges, who still dwell in a sphere governed by dogmatic textual positivism.

Although the Dutch Civil Code offers the courts a lot of freedom to apply the law flexible, this medal has a reverse side that is less pleasing. It leads to legal uncertainty and random judgments. Many solicitors who in practice have to work with the disorderly results of this system, want it to be neutralized more. And while no one in the Netherlands wants to turn back to dogmatic textual positivism, a more strict legal approach is supported by many litigating lawyers in order to change the present state where no one can predict what the outcome of a court case will be. Surely, there will always be situations in which the court has to revert to the principal of reasonableness and fairness, but this should be done modestly and with care. At this moment, however, the Civil Code and the way the courts understand it are overshooting its aim. Instead of a modern flexible law, the Dutch Civil Code has become an open end that produces unreliable judgments, which ultimately will undermine the confidence of society in the legal system as a whole.

Areas of civil law

A characteristic feature of all branches of civil law is that it relates to actions and occurrences involving individual citizens. It should be noticed that in Dutch civil law the word ‘citizen’ always includes all legal persons (associations, foundations, cooperatives, public and private limited liability companies and even foreign legal persons), unless it has been indicated otherwise. So a relationship between a natural person and a legal person is in principal dealt with in the same way as a relationship between two natural persons or even between two legal persons.

Civil law is divided into four different scopes of law: family law, corporate law, the law of succession and property law.

Family law

Family law deals with family-related issues and domestic relations, including, but not limited to, marriages, civil unions, registered partnerships, birth, family names, children, parental responsibility, custody, legal representation of children and adoption. Also matters of divorce, legal separation, marriage annulments are subjects governed by family law. A lot of these subjects interface with matters of property rights and obligations. A marriage, for instance, produces by operation of law a matrimonial community of property between the spouses, unless the marriage was concluded under a separate estate arrangement for which a notarial nuptial contract is necessary. The effects of a marital community of property must be solved when the marriage ends by divorce or the death of one of the spouses. The marital community of property has to be divided and the assets and debts have to be apportioned to the spouses or their heirs. After a divorce the former spouses still have to support each other where it concerns basic maintenances and means of existence, irrespective if they were married on equal terms or under a nuptial agreement. As a result, usually one of them is obliged to pay alimony to the other for several years. In a marriage with children both spouses have to support their offspring. In such events an arrangement concerning parental access has to be made as well. Matters of family law are regulated in Book 1 of the Dutch Civil Code.

Law on legal persons

Corporate law, laid down in Book 2 of the Dutch Civil Code, regulates the position of legal persons within society as well as the mutual relations of all persons and bodies involved in the organisation of such legal persons. A ‘legal person’, also called a ‘juridical person’ or ‘juristic person’, is a legal entity through which a group of natural persons are legally able to operate as if they were a single composite individual. The law acknowledges certain entities, not being natural persons, as a legal individual that may possess property of its own and that may perform juridical acts in his own name and for his own account. It then pretends that this property belongs to this legal entity, and not to the natural persons who are taking part in it, like its directors, shareholders or members. In the same way it pretends that juridical acts, performed by natural persons in the name of a legal person, are the legal acts of that legal person himself, which means that their effects must be imputed to the legal person, and not to the natural person who merely represented him when performing the legal act, nor to his directors, shareholders or members.

One has to notice, however, that the law not only pretends that a legal person is the same as a natural person, but that this pretention is a mere fact within the framework of civil law. Since the law is nothing else than a set of rules of behaviour, it can state that a legal person shall be treated the same as a natural person, for example where it concerns property and juridical acts, just as it can indicate that a natural person who is registered in the public registers for immovable property as the owner of a house, shall be regarded by law as the owner of that house, including all legal rights and duties going with it.

The term ‘corporate law’ is, in truth, not correct, because it implicates that only business corporations fall under the scope of this area of civil law. It’s true that most statutory provisions of Book 2 of the Civil Code of the Netherlands relate to legal persons who pursue a business, namely to a public limited liability corporation (‘naamloze vennootschap’ abbreviated as ‘NV’), a private limited liability company (‘besloten vennootschap’ abbreviated as ‘BV’), a cooperative (‘coöperatie’) and a mutual insurance company (‘onderlinge waarborgmaatschappij’). But Book 2 of the Dutch Civil Code also sets rules for the organisation of legal persons who do not practice any business or trade. In addition to the earlier mentioned legal persons, Dutch law admits two other legal entities, namely the association (‘vereniging’) and the foundation (‘stichting’). The statutory provisions for these legal persons are placed in Book 2 of the Civil Code as well and show resemblance to the provisions regulating corporate legal persons.

There are three other legal vehicles in which a business enterprise can be developed, but these aren’t governed by Book 2 of the Dutch Civil Code. Commercial partnerships, like an occupational partnership (‘maatschap’), a business partnership (‘vennootschap onder firma’) and a silent partnership (‘commanditaire vennootschap’), are historically based on a contract between the collaborating partners and therefore seen as a particular agreement for which Book 7a of the Dutch Civil Code and the Code of Commerce provides specific statutory provisions. In the near future these statutory provisions will be revised and placed in Book 7 of the Dutch Civil Code, which deals with particular agreements.

Law of succession

The law of succession, to be found in Book 4 of the Civil Code, determines how the estate of a deceased natural person is distributed and apportioned to his heirs and legatees. Although it is purely focused on property matters, it is regarded as a separate field of civil law that has to be distinguished from property law in general, because it only relates to the question what has to be done with the property of someone who has died and to what extent his heirs and legatees may claim a share in his estate. After the estate has been divided and apportioned, the heirs and legatees hold the acquired assets and debts in accordance with the normal rules of property law, for instance as an owner or creditor. In spite of the fact that the law of succession is for a large part connected with family law, these two areas are treated and commented as two separate fields of law.

Property law

Property law forms the basis of Dutch private law and therefore also of the Dutch Civil Code. It includes the law of real property rights, the law of obligations and contract law. One may distinguish real property rights and obligations on the one hand and the sources from which these property rights are derived on the other.

Book 3 DCC contains statutory provisions for juridical acts and legal representation, whereas Book 6 DCC affects agreements in general. A number of commonly used contracts are regulated more specifically in Book 7 DCC. It concerns the following obligatory agreements: sale, exchange, financial collateral, donation, lease, farm lease, provision of services (including commercial agency, intermediation, travel services and medical services), safekeeping, employment, construction, surety bond, determination of legal rights, insurance and life annuity. A few particular contracts are not yet covered by Book 7, but are still regulated by the statutory provisions of the old Civil Code, like loans, hire-purchases and commercial partnerships.

The legal effects created by agreements, namely obligations, and the consequences of a breach of contract are in general reviewed in Book 6 DCC and, as far as it concerns the particular effects of the contracts placed in Book 7 of the Dutch Civil Code, they are considered in that Book more thorough and detailed.

Book 6 DCC also covers other sources of obligations, like tortious acts, undue performances and unjustified enrichments. Dutch civil law regards an obligation as a specific relationship between two persons, namely between a creditor and his debtor. It makes no difference whether the obligation has arisen from an agreement or from another legally accepted source. However, when an obligation results from an agreement between the creditor and his debtor, the involved parties will usually have made an arrangement too for all other kinds of issues. These arrangements will determine the content of the obligation as well, whereas the content of an obligation that directly results from tort, an undue performance or an unjustified enrichment is only set by law. The obligatory claim of the creditor, standing within the obligation opposite to the debt of the debtor, is a property right in itself. It has, however, no real effect ('right in personam')

The real property rights ('rights in rem') of Dutch civil law are regulated in Book 3 DCC (usufruct, pledge and mortgage) and Book 5 DCC (ownership, long leasehold, easement, right of superficies and apartment right). Book 3 of the Civil Code also tells in general how real property rights may be established, alienated and encumbered. A characteristic of real property rights is that its proprietor is able to uphold his rights and powers over an asset against everyone, irrespective of who owns that asset.

Transport law represents the law of all types of carriages and means of transportation. It is placed in Book 8 of the Dutch Civil Code, but forms a part of property law.

Organisation of justice

With regard to private law there are three levels within the Dutch judiciary: the court of first instance, the Court of Appeal and the Supreme Court. In principle each party is entitled to due process of law at each of these three instances. (Chap. 6 Con.)

District Court (and Subdistrict Court)

All legal claims and applications related to private law must in first instance be brought before the District Court. There are 19 of such courts in the Netherlands, each with its own judicial area, known as a ‘district’ (‘arrondissement’). Cases before the District Court are handled by only one district judge. Therefore this one judge decides on his own what the outcome of the proceedings will be. Since the District Court is not subdivided into specialised courts, this means that this judge must have a very profound knowledge of almost all civil and commercial matters. In practise, naturally, he has not, since this is impossible. Fortunately a kind of specialisation has been brought about.

First of all each District Court has appointed one or more juvenile judges, dealing with matters related to child care. The juvenile judge participates in all legal cases concerning parental responsibility, parental access, guardianship and the emancipation of a minor.

Secondly, a district judge who thinks that a civil or commercial case is to complicated to be considered by just one judge, may distribute it to a bench of three district judges. Each District Court entails several of these ‘chambers’ (meervoudige kamer’), where three judges rule jointly on disputes under the chairmanship of a deputy presiding judge. Chambers are focused on one or more specific fields of law, for example family law disputes (the family chamber), money claims, building law, insurance law or expropriation law. Nevertheless, there remains a broad area of private law for which no specialised chambers exist.

Thirdly, all legal actions with regard to employment contracts, lease and farm lease agreements, commercial agency contracts and hire-purchase agreements have to be brought in first instance to the Subdistrict Court. Although formally the Subdistrict Court forms a separate division of the District Court, in fact it must be regarded as an independent court of first instance. Every district is divided into two or more subdistricts, each with its own Subdistrict Court. There is always a Subdistrict Court in the court house where the District Court is seated. But in addition a Subdistrict Court can be found in one or more other towns within one district. In total there are more than 50 Subdistrict Courts, spread over the Netherlands.

The Subdistrict Court is the court of first instances for all legal claims not exceeding a value of 25,000 and for al legal claims derived from an employment agreement, a lease agreement, a farm lease agreement, a commercial agency agreement or a hire-purchase agreement, and this always irrespective of the value of the involved claim. All other claims have to be brought in first instance to the District Court. Contrary to proceedings before the District Court, it is possible for parties in Subdistrict Court proceedings to perform procedural acts without the assistance of a solicitor registered at the Bar.

A provisional relief procedure may be initiated either at the Subdistrict Court (for all claims falling under the normal subject-matter jurisdiction of these courts) or at the District Court (for all claims, including those that, if it would concern normal proceedings, would fall under the exclusive subject-matter jurisdiction of the Subdistrict Court).

Court of Appeal

Two or more District Courts reside under the jurisdiction of a Court of Appeal. There are five Courts of Appeal in the Netherlands, situated at Amsterdam, the Hague, Arnhem, Leeuwarden and ’s-Hertogenbosch. If one of the involved parties claims that the judgment of the court of first instance (District Court or Subdistrict Court) is incorrect, he may appeal to the Court of Appeal in whose judicial territory the court of first instance is located.

The appeal must be lodged within three months after the day on which the court of first instance has given its judgement. Nevertheless it is possible to lodge just a formal appeal, to ensure that the period allowed for appeal will be observed, which can be followed by a material notice of appeal months later.

Supreme Court (final judgments)

There is one Supreme Court, situated in the Hague, acting as a last resort. After the judgment of the court of first instance (either the District Court or the Subdistrict Court) has been reviewed by the competent Court of Appeal, both parties may appeal again to the Supreme Court for a final decision. This so called appeal in cassation has to be instituted within three months after the day on which the Court of Appeal has dated its judgment. A judgment of the Supreme Court is called a ‘decree’. Contrary to an appeal to the Court of Appeal, it is not possible to lodge merely a formal appeal with the Supreme Court to ensure that the time-limit for cassation will not be crossed. The notice of appeal in cassation must immediately contain all objections against the decision and the substantiated considerations of the Court of Appeal.

Very rarely the Supreme Court may rule directly on a judgment of a court of first instance, namely when a statutory provision orders that an appeal to a Court of Appeal is out of the question. This is for instance the case when the value of the legal claim is less than € 1,750. A party who disagrees with a judgment of the Subdistrict Court on such a claim, cannot ask the Court of Appeal to review the matter. In that event an immediate appeal to the Supreme Court is possible, but only on restricted grounds, always implicating that the Subdistrict Court has violated basic procedural rules. The Supreme Court may also consider such matters if it thinks this is ‘in the interest of law’ (Article 81 Judiciary Organisation Act). Furthermore, parties to a court case which has ended in a judgment of the court of first instance, may always agree themselves to skip the Court of Appeal and ask the Supreme Court directly to give a final judgment .

After the Supreme Court has given its final decree, there is no other court available to turn to in order get the claim or application reviewed. This means that with the final decree of the Supreme Court the court has given an unchallengeable and irrevocable judgment ('final and binding' judgment). However, prior to this moment a judgment may already have become final, namely when none of the parties makes use of the legal means at his disposal to challenge it. When, for instance, none of the parties appeals within three months against the judgment of the court of first instance, it is ascertained that this judgment cannot be contested anymore. Therefore it has become final and binding as soon as the time-limit for bringing proceedings to the Court of Appeal has expired. The same applies, of course, when none of the parties appeals within three months to the Supreme Court with the intention to nullify the judgment of the Court of Appeal. So a judgment is final and binding (unchallengeable) when there are no longer any legal means available to contest it.