Dutch Civil Code

Book 6 The law of obligations

Title 6.1 Obligations in general

Section 6.1.9 Effects of a non-performance

Subsection 6.1.9.1 General provisions

Article 6:74 Requirements for a compensation for damages
- 1. Every imperfection in the compliance with an obligation is a non-performance of the debtor and makes him liable for the damage which the creditor suffers as a result, unless the non-performance is not attributable to the debtor.
- 2. As far as it is not yet permanently impossible to accomplish the indebted performance, paragraph 1 of this Article only applies with due observance of what is regulated in Subsection 2 for a debtor who is in default.

Article 6:75 Legal excuse for a non-performance (force majeure)
A non-performance cannot be attributed to the debtor if he is not to blame for it nor accountable for it by virtue of law, a juridical act or generally accepted principles (common opinion).

Article 6:76 Liability for auxiliary persons
Where, in the performance of an obligation, the debtor makes use of the assistance of other persons, he is liable (responsible) for their behaviour in the same way as if he would have behaved himself as such.

Article 6:77 Liability for auxiliary equipment
Where, in the performance of an obligation, a thing is used that appears to be unfit for that purpose, the non-performance which might result from this, is attributable to the debtor, unless this would be unreasonable in view of the content and necessary implication of the juridical act from which the obligation arises, the generally accepted principles (common opinion) and other circumstances of the situation.

Article 6:78 Compensation for damages in case of a legal excuse (force majeure)
- 1. As far as the debtor has enjoyed a benefit from a not attributable non-performance, which benefit he would not have enjoyed if he would have performed in conformity with his obligation, he has to undo, in accordance with the rules for an unjustified enrichment, the damage that the creditor has suffered from his non-performance.
- 2. When this benefit is a debt-claim of the debtor against a third party [insurance company or other liable person], then the debtor may comply with the previous paragraph through a transfer of that debt-claim to the creditor.

Article 6:79 Seizure and setoff in case of a legal excuse
Where the debtor was not able to comply with his obligation due to a cause not attributable to him (legal excuse), but the creditor is nevertheless capable of obtaining the indebted performance through a seizure, a foreclosure without recourse to the court or a setoff, the creditor has the right to do so.

Article 6:80 Legal effects of a non-performance before the debt-claim is due and demandable
- 1. The legal effects of a non-performance set in even before the debt-claim of the creditor has become due and demandable:
a. if it is certain that it will be impossible for the debtor to perform without an imperfection;
b. if the creditor must conclude from a statement of the debtor that he will not perform in conformity with his obligation;
c. or if the creditor has good reasons to fear that the debtor will not perform in conformity with his obligation and the debtor does not comply with a written notification of the creditor in which the debtor is asked to confirm, within a reasonable time, that he is willing to perform in conformity with his obligation at the moment on which his obligation will become due and demandable. The grounds that gave the creditor good reasons to fear for a non-performance of the debtor must be mentioned in this notification too.
- 2. The original day on which the debt-claim will become due and demandable continues to apply to the obligation to pay for damages which results from the delay and from the attribution of the non-performance to the debtor with regard to the time as of which he is in default.

Subsection 6.1.9.2 Default of the debtor

Article 6:81 Default
The debtor is in default during the time that the performance is not carried out in conformity with the obligation after it has become due and demandable, provided that the requirements of Article 6:82 and 6:83 are met, except as far as the delay cannot be attributed to him or it has become permanently impossible to perform the obligation.

Article 6:82 Letter of formal notice of default
- 1. The debtor is in default when he is held liable for his non-performance by a letter of formal notice, in which the creditor grants him a reasonable period of time during which he still may perform in conformity with his obligation, and he nevertheless fails to accomplish the indebted performance within that period.
- 2. If the debtor is temporarily unable to comply with his obligation or if it has become clear from his attitude that it will be useless to grant him a reasonable period of time in order to perform after all, then he may be held liable solely by a written announcement from which follows that he will be held responsible for his non-performance.

Article 6:83 Default without a letter of formal notice to perform or an alternative announcement
The debtor defaults [gets in default] immediately, without the necessity of a prior letter of formal notice to perform or an announcement in which he is held responsible for his non-performance:
a. when the obligation is subject to a time stipulation (expiry date) and he has failed to accomplish the indebted performance within the specified period, except when this time stipulation has another meaning.
b. when the obligation results from tort or when it forces the debtor to pay for damages as meant in Article 6:74 paragraph 1, and the indebted obligation is not performed instantly;
c. when the creditor must conclude from a statement of the debtor that he will not perform in conformity with his obligation.

Article 6:84 Impossibility to perform during the time the debtor is in default
When the debtor is in default, every occurring event that makes it impossible for him to perform in conformity with his obligation and that is not attributable to the creditor, will be attributable to the debtor; the debtor has to compensate the damage that has been caused as a result, unless de creditor would have suffered this damage also when the obligation would have been performed properly and in time.

Article 6:85 Compensation for damage caused by a delay
Damage resulting from a delay in the performance of the obligation only has to be compensated by the debtor over the time that he is in default.

Article 6:86 Purgation
During the time that the debtor is in default, the creditor may refuse an offer of the debtor to perform the obligation so long as the debtor does not also offer to pay for damages and costs that already have become indebted as a result of the non-performance.

Article 6:87 Alternative compensation for damages
- 1. When the debtor is in default and the creditor has notified him in writing that he demands the payment of damages instead of the original performance, the non-performed obligation is converted into an obligation to pay for alternative damages, unless it already was (or had become) permanently impossible to accomplish the original performance.
- 2. The original obligation shall not be converted in an obligation to pay for alternative damages when this is not justified in view of the fact that the non-performance is of minor importance.

Subsection 6.1.9.3 Further impact of a on-performance

Article 6:88 Loss of rights for the creditor after the expiration of a response period set for this purpose by the debtor
- 1. The debtor who has failed to comply with his obligation, may set a reasonable time period to the creditor within which the creditor must notify him which of the applicable legal remedies the creditor will use against him, under the consequence that, if this period expires without such notification, the creditor will only be able:
a. to demand a payment for damages which are indebted by law in case of the non-performance and, as far as the obligation commits the debtor to pay a sum of money, the payment of that sum of money;
b. to rescind the agreement from which the obligation results, if the debtor claims that the non-performance is not attributable to him.
- 2. Where the creditor has indicated, within the reasonable period set to him by the debtor, that he demands performance of the original obligation, but the debtor fails to comply with this demand within a reasonable time, the creditor may again use all applicable legal remedies; in that event the previous paragraph applies accordingly.

Article 6:89 Loss of all rights when the creditor hasn’t complained timely
The creditor cannot appeal to an imperfection (fault) in the received performance if he has not with convenient speed complained about it to the debtor after he has discovered that imperfection (fault) or after he reasonably should have discovered it.

Article 6:90 Right of cash sale
- 1. When the debtor has to deliver (supply) goods that decline easily or that rapidly become useless or that can only be preserved with such difficulties that in the circumstances this cannot be expected of the debtor, then the debtor is entitled to sell these goods in a proper way. The debtor is towards the creditor obliged to proceed to such a sale when this is unmistakably required in view of the interests of the creditor or when the creditor has told him to sell the goods.
- 2. The net proceeds of this sale replace (take the place of) the goods which should have been delivered (supplied) originally, without prejudice to the rights of the creditor that result from the debtor’s non-performance.

Subsection 6.1.9.4 Contractual penalties

Article 6:91 Contractual penalty clause
A contractual penalty clause is every contractual provision stipulating that the debtor, if he fails to perform his obligation correctly, has to pay a sum of money or deliver another performance, regardless if this sum of money or other performance is meant to be a compensation for damages or just an incentive to perform the obligation.

Article 6:92 Appeal to the performance of a contractual penalty clause
- 1. The creditor cannot demand performance of both, the contractual penalty clause and the obligation to which this penalty clause is linked.
- 2. What is indebted on the basis of a contractual penalty clause will replace (take the place of) the compensation for damages that would have been due by virtue of law (statutory provisions).
- 3. The creditor cannot demand performance of the contractual penalty clause when the non-performance of the obligation to which that clause is linked is not attributable to the debtor.

Article 6:93 Requirements for claiming the contractual penalty
In order to be able to demand the performance of a contractual penalty, the creditor must have in vain warned the debtor to perform his obligation by a letter of formal notice or an announcement as far as this would have been necessary in order to be able to demand the compensation for damages due by virtue of law (statutory provisions).

Article 6:94 A reduction or increase of the contractual penalty
- 1. The court may, upon the request of the debtor, reduce the contractual penalty if this is obliviously required by standards of reasonableness and fairness, on the understanding that it cannot grant the creditor less than the applying compensation for damages that would have been due by virtue of law (statutory provisions).
- 2. The court may, upon the request of the creditor, grant a compensation for additional damages in addition to a contractual penalty which has replaced the compensation for damages that would have been due by virtue of law (statutory provisions), if this is obliviously required by standards of reasonableness and fairness.
- 3. Every contractual provision in derogation from paragraph 1 is null and void.