Effects of COVID-19 on contracts under Dutch law

Current restrictions (25 March 2020)

• All public gatherings and meetings are prohibited until 1 June 2020 (excluding funerals and certain weddings).
• Shopkeepers and public transporters are obliged to take precautionary measures to ensure that people keep sufficient distance from each other.
• Hair dressers, beauty salons and other professionals which have close contact with individuals are prohibited to work until 6 April 2020.
• Schools are closed until 6 April 2020.
• Restaurants, bars and casino’s need to be closed until further notice.
• Offices must do teleworking where possible. People are advised to remain in their homes were possible and solely do shopping for daily needs.

Effects on existing contracts

• Important: the effects arise primarily from the specific wording of a contract.
• There are, however, some statutory rights, particularly where contracts don not have provisions for unforeseen circumstances.
• Where contracts cannot be fulfilled there may be an exception of force majeure stipulated in the contract, usually by interpretation of the wording in the contract.
• Where contracts cannot be fulfilled and where no exception of force majeure is stipulated in the contract, parties prevented from fulfilling their contractual obligations possibly can invoke the exception of force majeure.
• Where the prevention to fulfil a contractual obligation is temporary (whenever the crisis is over) this may result in a delay, whereas a force majeure exception may give relief for loss due to delay. The receiving party will have to extend reasonable deadlines before being able to rescind from the contract.
• Where the prevention is permanent, contracting parties may be able to rely on the concept of total hindrance under the force majeure, being able to terminate contracts (partly or as a whole), usually without costs.
• In cases where contracts can be fulfilled, but where the current circumstances were not foreseen in its provisions and create a real hindrance for one or both of the parties, it is possible to ask the court to decide how this unforeseen circumstance should be dealt with in perspective of all relevant circumstance.

Court operations

• Civil courts basically postponed all oral hearings. Oral hearings only take place in urgent cases. Nonetheless, all other procedural handlings continue.
• Criminal courts are also reduced to urgent cases.
• Arbitration tribunals (for example the Dutch Arbitration Institute) are still in operation.