Dutch Civil Code

Book 6 The law of obligations

Title 6.1 Obligations in general

Section 6.1.10 Statutory obligation to pay damages

Article 6:95 To be compensated damage according to law
The damage that has to be compensated by virtue of a statutory obligation to repair damages (due by virtue of law), consists of material loss and other disadvantages, the latter as far as the law implies that there is an additional entitlement to a compensation for such damage.

Article 6:96 Material loss
- 1. A material loss includes losses suffered as well as missed profits.
- 2. The following damages also qualify for compensation as material loss:
a. reasonable costs to prevent or limit the damage which could be expected as a result of the event which makes someone liable;
b. reasonable costs for determining the nature and scope of the damage and of the liable persons;
c. reasonable costs for attempts to get satisfied on the basis of a settlement out of court.
- 3. Paragraph 1, under (b) and (c) does not apply as far as in the prevailing case the rules regarding the costs of legal proceedings are applicable pursuant to Article 241 of the Code of Civil Procedure.
- 4. In the event of a commercial transaction as meant in Article 6:119a, paragraph 1, or 6:119b, paragraph 1, the compensation of costs referred to in paragraph 2, under (c), consists of at least an amount of 40 Euros. This amount is due, without any reminder (formal notice) being required, as of the day following the one on which the statutory or agreed deadline for payment has expired. It is not possible to derogate from this rule to the detriment of the creditor.
- 5. Further regulations shall be issued by Order in Council for the compensation of costs meant in paragraph 2, under (c). It is not possible to derogate from these regulations to the detriment of the debtor if the debtor is a natural person who did not act in the course of his professional practice or business. In that case Article 241, first sentence, of the Code of Civil Procedure is inapplicable.
- 6. If the debtor is a natural person who did not act in the course of his professional practice or business, then the compensation according to the further regulations shall be indebted only when the debtor, after he defaults as meant in Article 6:81, has been ordered by formal notice to make the payment within fourteen days, including the payment of the compensation claimed in accordance with the further regulations, with mention in the formal notice of the consequences when he fails to make this payment, appears to have been formally notified in vain; in that case the compensation shall be indebted as of the day on which the formal notice was sent.
- 7. If the same creditor is able to send a formal notice as meant in paragraph 6 for more debts against the same debtor, he has to do so in one formal notice. For the purpose of calculating of the compensation, the capital sums of these debt-claims are added.

Article 6:97 Estimation of damage
The court estimates the extent of the damage in the way which is most consistent with the nature of the damage caused. Where the extent of the damage cannot be assessed exactly, it shall be estimated.

Article 6:98 Causal relation and attribution
Only damage that is connected in such a way to the event that made the debtor liable, that it, in regard of the nature of his liability and of the damage caused, can be attributed to him as a consequence of this event, is eligible for compensation.

Article 6:99 Damage caused by more events (reversed burden of proof)
Where the damage is caused by two or more events, for each of which another person is liable, and it is ascertained that the damage originates from at least one of these events, then each of these liable persons is joint and several liable for that damage, unless a liable person proves that this specific damage is not caused by the event for which he himself is liable.

Article 6:100 Offsetting benefits
When the injured person has not only suffered damage from an event, but also a benefit, then this benefit has to be subtracted, as far as this is reasonable, from the damage that has to be compensated to him.

Article 6:101 Own fault of the injured person
- 1. When the damage is caused as well by circumstances which are attributable to the injured person himself, then the obligation to compensate damages is reduced by imputing the total damage to the injured person and to the liable person in proportion to the degree in which the circumstances which have contributed to the damage can be attributed to them individually, on the understanding that another imputation occurs or the obligation to compensate damages extinguishes or stays in force totally, if this is required by fairness in view of the significance of the various faults or of other circumstances in the prevailing situation.
- 2. If the obligation to compensate damages concerns damage which is caused by a thing (object) that a third party kept in his physical power on behalf of the injured party, then, with regard to the application of the previous paragraph, circumstances that are attributable to this third party are imputed to the injured person.

Article 6:102 Joint fault and internal contribution of the liable persons towards each other
- 1. When two or more persons are individually liable for the same damage, then they are joint and several liable for it. In order to assess what each of them has to contribute by virtue of Article 6:10 on account of their internal relationship with each other, the damage is imputed to them in accordance with Article 6:101, unless a different imputation results from law or a juridical act.
- 2. When the damage is caused as well by circumstances which are attributable to the injured person himself, then Article 6:101 is applicable to the obligation of each of the liable persons meant in the previous paragraph to compensate the damage to the injured person, on the understanding that the injured person may, overall, not claim more of each of the liable persons than he could if only one of them would have been liable as a result of the circumstances on which their liability is based. When it is not possible to recover a contribution in full from one of the persons with an internal obligation to contribute in the damages, then the court may order, upon the request of one of these persons, that in the application of Article 6:13 the unrecovered contribution shall be imputed also over the injured person.

Article 6:103 Type of compensation (money or another type of repair)
Damage is compensated in money. The court may, nevertheless, grant another kind of compensation than a sum of money if the injured party has requested so. When the liable person, after such a judgment, has not supplied another compensation within a reasonable period of time, the injured person regains the right to demand a compensation in money.

Article 6:104 Estimation of damage and the handing over of profits
If someone, who is liable towards another person on the basis of tort or a default of complying with an obligation, has gained a profit because of this tort or non-performance, then the court may, upon the request of the injured person, estimate that damage in line with the amount of this profit or a part of it.

Article 6:105 Estimation of damage that as not yet revealed itself
- 1. The estimation of damage which has not yet revealed itself may be postponed entirely or partially by the court or may be calculated in advance after assessment of all beneficial and unfavourable possibilities. In this last situation the court may order the debtor either to pay the calculated total sum at once through a lump-sum payment or to pay it periodically in split quantities (instalments), whether or not under the obligation to provide security; such a judgment can be given under additional conditions.
- 2. As far as the court has ordered the debtor to pay the calculated sum periodically in split quantities (instalments), it may rule in the same judgment that this obligation can be modified at the request of each of the parties, to be lodged with the court which at first instance has given a judgment on the legal claim (right of action) for a compensation of damage, but only if afterwards new circumstances have come to light which are important for determining the extent of the compensation, but which were not taken into account as a beneficial or unfavourable possibility at the estimation of the chargeable sum.

Article 6:106 Other damage than material loss (‘pretio doloris’)
- 1. The injured person has a right of compensation for damage that does not consist of material loss, assessed in conformity with the standards of reasonableness and fairness:
a. if the liable person had the intention to inflict such damage;
b. if the injured person sustained physical injuries or if his honour or reputation is injured or if he is harmed otherwise in person;
c. if the damage consists of harming the memory of a deceased and is inflicted to the not legally separated spouse, the registered partner or a blood relative up until the second degree of the deceased, provided that the memory of the deceased is harmed in such a way that the deceased himself, if he would still be alive, could have claimed damages for injuring his honour or reputation.
- 2. A debt-claim for compensatory damages as mentioned in the previous paragraph (immaterial damage) cannot be alienated (conveyed) or seized, unless the existence of the debt-claim has been acknowledged by agreement or unless a legal claim (right of action) has been filed in respect thereof. For an acquisition under universal title of such a debt-claim it is, however, sufficient that the entitled person has notified the liable person that he lays a claim to such a compensation.

Article 6:107 Lesion damages
- 1. If someone has sustained physical or mental injuries as a result of an event for which another person is liable, then this other person must compensate not only the damage of the injured person, but also the costs which a third party has made on behalf of the injured person, insofar the injured person, if he had made these costs himself, could have recovered them from the liable person. The pervious sentence does not affect costs which are made by virtue of an insurance.
- 2. A person who is held liable under the previous paragraph by a third party for damages may invoke the same defences against this third party as he may invoke or could have invoked against the injured person himself.

Article 6:107a Recovery right of an employer for wages paid to an employee who has been injured by a third person
- 1. If someone has sustained physical or mental injuries as a result of an event for which another person is liable, then the court shall also take into account, in determining the compensatory damages to which the injured person is entitled, the debt-claim of the injured person against his employer derived from the legal duty of the employer to continue the payment of wages based on Article 7:629, paragraph 1, of the Civil Code or on an individual or collective labour agreement.
- 2. As far as an employer, by virtue of Article 7:629, paragraph 1, of the Civil Code or by virtue of an individual or collective labour agreement, must continue the payment of wages during the time that his employee is unable to work as a result of sickness or a disability, caused by an event for which another person is liable, then the employer is entitled to claim compensatory damages from this other person, yet at the most to the amount for which this other person could have been held liable by the injured person himself if his wages would not have been paid unremittingly, reduced with the compensatory damages indebted by this other person to the injured person.
- 3. Where the liable person, meant in paragraph 2, is also an employee [of this specific employer], the employer is only entitled to claim compensatory damages from him if the inability to work of the injured employee is caused with intent or deliberate recklessness.

Article 6:108 Compensatory damages when the injured person has died
- 1. If someone has died as a result of an event for which another person is liable to him, then this other person is obliged to compensate the damage suffered due to the loss of the deceased’s prospective income:
a. by the not legally separated spouse, the registered partner and the children under age of the deceased, to at least the amount that would be indebted to them under law as maintenance;
b. by other blood and legal relatives of the deceased, provided that the deceased at the moment on which he died, supported them financially in the costs of living, either voluntary or by virtue of a judicial decision;
c. by persons who, prior to the event that has caused the liability, lived together with the deceased in a family relation and for whose maintenance the deceased provided entirely or for a large part, as far as it is plausible that he would have continued to do so if he would not have died, but only as far as these persons reasonably cannot provide for their own maintenance;
d. by a person who cohabited with the deceased in a family relation and in whose maintenance the deceased contributed by means of actually attending (running) the common household, as far as he suffers damage because he has to find another way to run the house after the deceased has died;
- 2. Moreover, the liable person is obliged to compensate the costs of the funeral and of the disposal of the dead, and this towards the person at whose account these costs are made, but only as far as these costs are in conformity with the standard of living of the deceased and with other relevant circumstances.
- 3. The person who is held liable for damages under the previous may invoke the same defences against the persons who are entitled to claim such compensatory damages as he could have invoked against the deceased himself.

Article 6:109 Moderation of compensatory damages
- 1. The court may reduce the amount of an obligation to pay for damages if a full award of damages would lead to obviously unacceptable results in view of the circumstances of the given situation, among which the nature of the liability, the legal relationship between parties and their financial resources.
- 2. The amount of the obligation to pay for damages cannot be reduced to a lower amount than that for which the debtor has covered his liability by insurance or was compelled to do so.
- 3. Every contractual provision in derogation from paragraph 1 is null and void.

Article 6:110 Maximising liability by Order in Council
In order to prevent that the liability for damages will exceed the damage that reasonably can be covered by insurance, it is possible to decree by Order in Council maximum amounts of liability. Separate amounts can be maximised in accordance with, among others, the nature of the event, the nature of the damage and the ground for liability.

Section 6.1.11 Obligations for the payment of money

Article 6:111 Nominal amount
An obligation to pay a sum of money must be settled to its nominal amount, unless something else results from law, common practice or a juridical act.

Article 6:112 Payment in common currency
The currency paid in order to comply with an obligation to pay a sum of money, must at the time of payment be a common currency in the country where the payment is made.

Article 6:113 [repealed on 01-01-2002]

Article 6:114 Bank-giro payments
1. When the creditor has a bank account suitable for bank-giro payments in the country where the payment must or may be made, then the debtor may pay his debt by transferring the indebted amount to that bank account, unless the creditor has validly excluded a payment to that account
- 2. In the event of the previous paragraph the payment is made at the moment on which the bank account of the creditor is credited.

Article 6:115 Place of payment
The place where the indebted sum of money must be paid, has to be determined in accordance with the provisions of Article 6:116 up to and including 6:118, unless the law, common practice or a juridical act imply that the money may be paid in another place.

Article 6:116 Domicile of the creditor
- 1. The payment of a sum of money must be made at the place where the creditor is domiciled at the time of the payment.
- 2. The creditor is entitled to point out another place of payment, provided that this place is located in the same country as where his domicile is located at the time of payment or as where his domicile was located at the time that the obligation came to existence.

Article 6:117 Another place of payment
If, pursuant to Article 6:116, the sum of money must be paid in another place than the place where the creditor was domiciled at the moment on which the obligation came to existence, with the result that it becomes considerably more difficult for the debtor to comply with his obligation, then the debtor is entitled to withhold payment until the creditor has pointed out another place of payment in one of the countries meant in Article 6:116 paragraph 2, where such difficulties do not exist.

Article 6:118 Place of business
If the money debt-claim results from an activity performed by the creditor in the pursuance (conduct) of his professional practice or business, then the place of business where he performs these activities shall be regarded as his domicile for the purpose of Articles 6:116 and 6:117.

Article 119 Damages for delay; statutory interest rate
- 1. The compensation for damages, chargeable because of a delay in payment of a sum of money, consist of the statutory interest on the unpaid part of that sum over the time that the debtor is in default of complying with his obligation.
- 2. At the end of each year the amount on which the statutory interest is to be calculated, shall be increased with the unpaid statutory interest chargeable over that year.
- 3. Where the stipulated contractual interest is higher than what would be chargeable to the debtor under the previous paragraphs, the creditor is entitled to this higher interest over the time that the debtor is in default of complying with his obligation.

Article 6:119a Statutory interest for commercial transactions *
- 1. The compensation for damages, chargeable because of a delay in payment of a sum of money, consists, in case of a commercial agreement, of the statutory interest on the unpaid part of that sum from the day following the date that has to be considered as the expiry date for payment under the agreement up until and including the day on which the debtor has paid the amount chargeable to him. By a commercial agreement is understood the agreement for remuneration (for consideration) which obliges one or more parties to deliver or to do something and which has been concluded between one or more legal persons or natural persons who, when entering into the agreement, acted in the pursuance of their professional practice or business.
- 2. Where no expiry date for payment has been agreed upon, the statutory interest shall be chargeable by operation of law without the necessity of a reminder [no necessity of a prior warning by letter of formal notice to perform]:
a. as from 30 days following the date on which the debtor has received the invoice, or
b. if the date of the receipt of the invoice is uncertain or if the debtor has received the invoice earlier than the performance (goods or the services), as from 30 days after the date of receipt of the performance;
c. if the agreement provides for a procedure of acceptance or verification, through which is to be ascertained whether the performance (goods or services) is in conformity with the agreement, and if the debtor receives the invoice earlier or on the date on which such acceptance or verification takes place, 30 days after the day on which the debtor has accepted or verified the performance or, if he does not give his opinion upon the acceptance or verification, 30 days after the day on which the period for acceptance or verification has expired.
- 3. At the end of each year the amount on which the statutory interest is to be calculated, shall be increased with the unpaid statutory interest chargeable over that year.
- 4. The period referred to in paragraph 2, under (c), does not exceed 30 days from the date of receipt of the performance, unless the parties expressly have agreed a longer period and this period is not evidently unfair for the creditor, in view of:
a. the question whether the debtor has any objective reason to deviate from the 30-day period;
b. the nature of the performance, and;
c. any significant deviation from good commercial practice.
- 5. The parties may agree a deadline for payment of at the most 60 days, unless they explicitly include a longer period of payment in the contract and this period is not evidently unfair for the creditor, in view of:
a. the question whether the debtor has any objective reason to deviate from the 60-day period;
b. the nature of the performance, and;
c. any significant deviation from good commercial practice.
- 6. No statutory interest is chargeable when the creditor himself is in creditor’s default as meant in Section 6.1.8.
- 7. The statutory interest is chargeable except as far as the delay cannot be attributed to the debtor.
- 8. For the purpose of this Article, another agreed or stipulated interest is equated with statutory interest.

*) This Article is based on Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions (OJ L48/1).

Article 6:119b Statutory interest due by public authorities*
- 1. The compensation for damages, chargeable by a public authority because of a delay in payment of a sum of money, consists, in case of a commercial agreement with a public authority, of the statutory interest on the unpaid part of that sum from the day following the date that has been agreed as the expiry date (deadline) for payment up until and including the day on which the debtor has paid the amount due. By a ‘public authority’ is understood: the State, a province, a municipality, a water board or a public body, or a partnership of such authorities or public institutions as referred to in Article 2 paragraph 2 of Directive 2011/7 of the European Parliament and the Council of 23 February 2011 on combating late payment in commercial transactions (OJ L48/11).
- 2. If no expiry date (deadline) for payment has been agreed, then statutory interest shall be due by operation of law:
a. as of 30 days after the start of the day following the one on which the debtor has received the invoice, or;
b. if the date of receipt of the invoice is uncertain, or if the debtor receives the invoice before receiving performance, as of 30 days after the start of the day following the one on which the performance is received, or;
c. if the debtor has stipulated a period in which he may accept or verify whether the received performance meets the contract, and if he receives the invoice before he as accepted or verified the performance, as of 30 days after the start of the day following the one on which the debtor has accepted or verified the performance, or if he does not make a statement about the approval or acceptance, as of 30 days after the start of the day following the one on which the period expires.
- 3. Each time after the end of a year, the amount on which the statutory interest is calculated, is increased with the interest due for that year.
- 4. The period referred to in paragraph 2, under (c), does not exceed 30 days from the date of receipt of the performance, unless the parties expressly have included a longer period in the contract or tender documents and this period is not evidently unfair for the creditor, in view of:
a. the question whether the debtor has any objective reason to deviate from the 30-day period;
b. the nature of the performance, and;
c. any significant deviation from good commercial practice.
- 5. It is not possible to derogate by agreement from the latest expiry date (deadline) of at the most 30 days referred to in paragraph 2, unless parties have explicitly included a longer period of payment in the contract and provided it is objectively justified in the light of the particular nature or features of the contract. In that case the period of payment shall be at the most 60 days.
- 6. No statutory interest is chargeable when the creditor himself is in creditor’s default as meant in Section 6.1.8.
- 7. The statutory interest is chargeable except as far as the delay cannot be attributed to the debtor.
- 8. For the purpose of this Article, a higher agreed or stipulated interest is equated with statutory interest.

*) This Article is based on Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions (OJ L48/1).

Article 6:120 Statutory interest rate
- 1. The rate of the statutory interest meant in Article 6:119 is determined by Order in Council. Statutory interest that already was running at the moment on which by Order in Council a new interest rate has become effective, will as of that moment be calculated according to the new interest rate.
- 2. The rate of the statutory interest meant in Article 6:119a and 6:119b equals the refinancing interest as determined by the European Central Bank for its most recent basic refinancing transaction, taken place for the first calendar day of the concerning six-month period, multiplied with eight percent points. Statutory interest which runs on the first day of the concerning six-month period is calculated as of that day according to the new interest rate for a time period of half a year.

Article 6:121 Payment in other currency
- 1. Where an obligation necessarily implicates the payment of another currency than that of the country where the payment must take place, the debtor may also pay his debt in the currency of the place of payment.
- 2. The previous paragraph does not apply when law, common practice or a juridical act imply that the debtor has to pay effectively in the currency specified by the obligation.

Article 6:122 A payment in foreign currency is impossible
- 1. Where an obligation necessarily implicates the payment of another currency than that of the country where the payment must take place and the debtor is not able or claims to be unable to pay his debt in this currency, the creditor may require payment in the currency of the place of payment.
- 2. The previous paragraph applies too if the debtor is obliged to pay effectively in the currency specified by the obligation.

Article 6:123 Right of action and enforcement of executorial titles denominated in foreign currency
- 1. When a right of action (legal claim) is instituted in the Netherlands to claim a sum of money, denominated (expressed) in foreign currency, then the creditor may claim in court, at his choice, payment in that foreign currency or in Dutch currency.
- 2. The creditor who is able to enforce, within the Netherlands, an executorial title denominated (expressed) in foreign currency, may demand at this enforcement (foreclosure) that the amount due to him will be paid in Dutch currency
- 3. The previous paragraphs apply too if the debtor is obliged to pay effectively in the currency specified by the obligation.

Article 6:124 Rate of exchange
Where an obligation as a result of the application of Articles 6:121, 6:122 or 6:123 is satisfied in another currency than the one specified by the obligation, the conversion shall occur at an exchange rate on the day on which the payment takes place. The previous sentence applies as well to an obligation that has been converted in accordance with the provisions of Subsection 6.1.1.9 of the Civil Code in an obligation for compensatory damages in another currency than the one specified by the converted obligation.

Article 6:125 Exchange rate damages
- 1. Article 6:119 [and 6:119a] leave[s] unimpaired the right of the creditor to claim a compensation for damage suffered because, after the day on which the debtor became liable for damages, the exchange rate of the currency specified by the obligation has changed in comparison to the currency of one or more other countries.
- 2. The previous paragraph does not apply if the obligation denominates the payment in Dutch currency and the payment must take place in the Netherlands, provided that the creditor at the moment on which the obligation came to existence had his domicile in the Netherlands.

Article 6:126 Definition of exchange rate
For the purpose of this Section the rate of exchange shall be the rate against which the creditor immediately can provide himself the money, taking into account what may result from law, common practice and the content and intention of the obligation.

Section 6.1.12 Right of setoff

Article 6:127 Requirements for a setoff
- 1. When a debtor is entitled to make a setoff and he announces to his creditor that he performes his obligation by offsetting it against a debt-claim he has against the creditor, both obligations cease to exist up to the amount of the obligation with the lowest value.
- 2. A debtor is entitled to make a setoff when he may claim a performance of the opposite party that corresponds to the performance which he is indebted to him, provided that he is entitled to perform his own obligation and to demand performance from the opposite party.
- 3. The right to make a setoff does not exist when the debt-claim and the obligation of the debtor belong to separated properties or when the debt-claim and the obligation of the opposite party belong to separated properties.

Article 6:128 Setoff against debt-claims to order or to bearer
- 1. The creditor of a debt-claim to order or to bearer may offset his debt-claim by writing his setoff announcement on the negotiable document and, subsequently, handing this document over to the opposite party.
- 2. If the setoff does not concern his entire debt-claim or he still needs the negotiable document to exercise other rights, then he may keep the document, provided that he not only writes his setoff announcement on it, but also separately addresses this announcement in writing to the opposite party.
- 3. Irrespective whether the setoff concerns his entire debt-claim, he may offset his debt-claim also, without writing a setoff announcement on the negotiable document, by handing over another written setoff statement to the opposite party, provided that, when the opposite party asks so, he is able to show that the negotiable document is destroyed or has become worthless or that he, when the opposite party asks him to do so, provides security for twenty years or for such shorter period as the opposite party may still be liable for this debt-claim on the basis of that document.

Article 6:129 Retroactive effect of a setoff
- 1. A setoff has retroactive effect to the moment on which the right of setoff arose.
- 2. If accrued interest has been paid already on one or both debt-claims, then the setoff has only retroactive effect to the end of the last period over which interest was paid.
- 3. If a currency value calculation is necessary to determine the effect of a setoff of money debts, then such a calculation shall be made on the same bases as if mutual payment had occurred on the day of the setoff.

Article 6:130 Passage and encumbrance (conveyance) of debt-claims
- 1. Where the debt-claim of the original creditor has passed (has been conveyed) under particular title to a new creditor, the debtor is nevertheless towards that new creditor entitled to offset a counter debt-claim which he has against his original creditor (against the obligation he now has to perform to the new creditor), provided that this counter debt-claim results from the same legal relationship as the debt-claim that has passed (has been conveyed) or that it already belonged to him and had already become due and demandable before the debt-claim passed (was conveyed) to the new creditor.
- 2. The previous paragraph applies accordingly to a debt-claim that has been seized or encumbered with a limited property right of which the debtor has been notified (informed).
- 3. The previous paragraphs do not apply to a debt-claim to order or bearer that has passed or has been encumbered (has been conveyed) in accordance with Article 3:93 of the Civil Code.

Article 6:131 Effect of a prescription of the right of action on a right of setoff
- 1. The right to make a setoff does not end by prescription of the right of action attached to one of the claims involved in the setoff.
- 2. An extension of payment or an extension of foreclosure (sale under execution), granted as a favour by the creditor, does not postpone or hinder the creditor’s right to make a setoff.

Article 6:132 Remove the effect of a setoff announcement
Where a setoff announcement is made by a person who is entitled to do so, the other party may nevertheless, if he has grounds to refuse performance of his own obligation, take away the effect of that setoff announcement by appealing to the ground of refusal immediately after that announcement was made and immediately after he was able to appeal to that ground.

Article 6:133 A counter setoff
After one of the parties has made a setoff announcement, the other party may take away its effect by exercising his own right to make a setoff, provided this is done immediately and his setoff has retroactive effect to a day prior to the day to which the first made setoff would have had retroactive effect.

Article 6:134 Setoff after a rescission of the mutual agreement by the opposite party
The debtor under a mutual agreement, who is entitled to make a setoff, may take away the effect of a notification of the other party through which this party intends to rescind that agreement on a breach of contract (non-performance), by immediately exercising his right of setoff.

Article 6:135 No right of setoff
A debtor is not entitled to make a setoff:
a. as far as a seizure of the obligatory claim of the opposite party would not be valid;
b. if his own obligation necessarily implicates to pay a compensation for damage which has been caused by him deliberately.

Article 6:136 Setoff as legal defence
Where a defendant during legal proceedings invokes his right to make a setoff, but the court cannot easily ascertain whether this defence is justified, it may award the legal claim of the opposite party without taking notice of this defence, provided that the legal claim is awardable otherwise.

Article 6:137 Ranking order of imputation of payments
- 1. As far as the setoff announcement not sufficiently indicates which obligations are involved in the setoff, the ranking order, set out in Article 6:43, paragraph 2, and 6:44, paragraph 1, will apply to the imputation of payments.
- 2. When a party has made a setoff announcement indicating an imputation of his payment to a principle debt, costs and interest in another ranking order than that of Article 6:44, paragraph 1, then the opposite party may take away the effect of this announcement by immediately making an objection against this imputation. In determining whether the imputation of payments is in accordance with the ranking order of Article 6:44 it has to be taken into account that the interest must be calculated in accordance with Article 6:129.

Article 6:138 Setoff of obligations with different places of performance
- 1. The fact that the place of performance of the obligations is not the same, does not exclude a setoff. In such an event the party who makes the setoff has to compensate the damage which the opposite party suffers from the fact that parties did not actually perform their obligations at the relevant places of performance.
- 2. When a party, despite of the fact that the place of performance of the obligations is not the same, has made a setoff announcement, the opposite party may take way the effect of this announcement by immediately making an objection against the setoff, provided that he has a justified interest that no setoff, but performance takes place.

Article 6:139 Position of a surety
- 1. A surety and a person whose property serves as security for someone else’s debt may invoke the suspension of their liability as far as the creditor is entitled to setoff his secured claim against a due and demandable obligation indebted by him to the debtor.
- 2. They may invoke that they are released from their liability as far as the creditor has lost his right of setoff (his right to offset his covered claim against his own obligation to the debtor), unless the creditor had reasonable grounds to waive this right or he is not to blame that it is lost.

Article 6:140 Setoff by operation of law (current accounts)
- 1. If law, common practice or a juridical act requires that all or specific money claims and money debts between two parties are booked on one account, then the involved amounts will be setoff against each other immediately by operation of law in the order in which these parties are entitled to make a setoff according to the previous Article or according to their mutual legal relationship, and, at all times, only the balance sheet shall be due. Article 6:137 does not apply.
- 2. The party administering such an account, shall close it annually and shall inform the opposite party of the outstanding balance at that moment, reporting to him as well the components of which the account exists as far as they have not yet been notified to him.
- 3. If the opposite party does not protest within reasonable time against the balance of the account as reported to him pursuant to the previous paragraph, that balance is regarded to be assessed between parties.
- 4. After the balance of the account has been assessed, it is no longer possible to appeal to a prescription or a statutory time-limit with regard to the separate components of the account. The right of action with regard to the balance becomes prescribed on the expiry of five years after the day following the one on which the account has been closed and the balance has become due and demandable.
- 5. From the legal relationship between parties may result something else than what is stipulated in the previous provisions.

Article 6:141 Receipt of payment or certificate of proof
If an obligation extinguishes entirely or partially because of a setoff, then Article 6:48, paragraph 1 and 2, applies accordingly.