As you (hopefully) expect with cross-border transactions, you include your general terms and conditions with your quote. Your German client does the same with their terms and conditions when accepting the order. What happens if neither party responds to this and takes action? In cross-border contracts between the Netherlands and Germany, disputes often arise (after the fact) about which general terms and conditions apply. In legal terms, this is called a battle of forms . If you conduct business across borders, it's important to fully understand the legal implications of this, under both Dutch and German law.
As you (hopefully) expect with cross-border transactions, you include your general terms and conditions with your quote. Your German client does the same with their terms and conditions when accepting the order. What happens if neither party responds to this and takes action? In cross-border contracts between the Netherlands and Germany, disputes often arise (after the fact) about which general terms and conditions apply. In legal terms, this is called a battle of forms . If you conduct business across borders, it's important to fully understand the legal implications of this, under both Dutch and German law.
A battle of forms arises when both parties in a commercial transaction refer to their own terms and conditions, and these have both been legally provided. This often happens unconsciously: you send a quote with your terms and conditions, and the other party responds with an order confirmation that includes their own. If no one then explicitly rejects the other's terms and conditions, confusion arises. Which terms and conditions then apply?
The answer to that question depends on the applicable law. And that's where a key difference lies between the Netherlands and Germany.
In the Netherlands, Article 6:225, paragraph 3, of the Civil Code applies. It reads as follows:
“ If the offer and acceptance refer to different terms and conditions, the second reference will have no effect unless the applicability of the general terms and conditions stated in the first reference is also expressly rejected.”
This is also called the first shot rule . In concrete terms, this means:
Example:
A Dutch supplier sends a quote with its general terms and conditions. The German customer orders based on its own purchasing terms and conditions, but doesn't mention the supplier's terms and conditions previously sent. In that case, under Dutch law, the supplier's terms and conditions apply.
In practice, disputes arise as soon as both parties refer to their own terms and conditions, without mutual rejection or a clear choice in the contract. This is especially risky in international transactions.
In Germany, the battle of forms is approached differently. There, the so-called knockout rule , also known as the "Restgültigkeitstheorie" (Residual Jurisdiction Theory), applies. In the event of conflicting terms and conditions, the provisions that conflict with each other are declared inapplicable. Only the non-conflicting parts remain valid. The resulting gaps are filled with the applicable statutory law.
In short:
Example:
A German parts exporter refers in its quotation to terms of delivery that exclude liability, except for intent and gross negligence, and the mandatory liability under statutory regulations. The Dutch buyer confirms the order but simultaneously refers to its own purchasing terms and conditions, which hold the supplier fully liable for all direct and indirect damages. Under German law, in the event of a "battle of forms," these provisions are inconsistent and are both declared inapplicable. The statutory rules then apply to determine liability.
This approach prevents one party from automatically "winning" because they sent something first or last. However, it also increases the risk of legal uncertainty, as it's not always clear where the law intervenes.
| Subject | Dutch law (first shot rule) | German law (knockout rule) |
|---|---|---|
| Applicable rule | Article 6:225 paragraph 3 BW | Jurisprudence / doctrine Restgültigkeitstheorie |
| Who wins? | The one who refers first, unless explicitly rejected | Neither: conflicting provisions shall be void |
| Consequence of collision | First conditions apply | Only non-conflicting provisions remain |
| Role of supplementary legislation | No role if preconditions apply | Fills in the gaps in conflicting provisions |
| Practical effect | Unilateral control lies with the fastest party | More balance, but possible uncertainty without a contract |
The best weapon against a battle of forms is clear agreements. We're happy to offer five concrete strategies for this:
In some cases, there's no room for negotiation when entering into an agreement. Large parties or government agencies simply want to contract exclusively under their own terms. In those cases, the principle is simple: sign or don't sign.
However, it's worthwhile to clearly document what you will and won't accept. Preferably in writing, and always in consultation with a legal advisor.
The battle of forms is not only about conditions, but also about the question:
Choose this consciously and explicitly document it. Only then will you avoid surprises in the event of a conflict.
Also read: ' General terms and conditions in Germany, how does that actually work? '
Have your terms and conditions and contracts reviewed by specialists familiar with both Dutch and German law. This will prevent misunderstandings and strengthen your position in cross-border matters.
Contact Heisterborg International for a free, no-obligation quick scan of your contract practice.
Please feel free to inquire about what we can do for you.
