Dutch court upholds incorporation of online terms and conditions referred to in hard copy contracts

28 April 2008

Elvira Bergansius, Wienke Zwier

Under Dutch law standard terms and conditions may be voidable if the other party has not been given sufficient opportunity to review these terms. Dutch law has accepted that an electronic link to standard terms will in many circumstances be sufficient in online transactions. In a recent case, however, a Dutch court decided that even where the transaction is not an online transaction, reference in a hard copy document to the address of a website containing standard terms may still be sufficient. As will be seen, this decision has proved to be controversial.

The general rule that standard terms may be voidable if the other party has not been given sufficient opportunity to review the terms, has lead to frequent debates as to whether standard terms have been successfully incorporated. These debates consider issues such as whether the standard terms were provided in the right way and at the right time; and also whether the circumstances of the case permit the other party to argue that the terms are voidable. The Subdistrict Court of Haarlem’s decision on 29 August 2007 addresses this issue, and looks specifically at whether a reference to a web address on a hard copy document is enough to incorporate these terms.

The facts

On 22 March 2006 designer Marijn Ontwerp offered to develop an illustration line and stencil series for Hanson Bedrijfsmakelaardij, a real estate agent. The offer, which was made in hard copy form, contained a reference to Marijn Ontwerp’s website from which its terms and conditions were available. The offer stated that these terms applied to the provision of the services and that a copy of these terms would be provided immediately upon request. Marijn Ontwerp and Hanson subsequently concluded an oral agreement for the provision of the services. When Hanson failed to comply with the timetable for payment that was set out in the standard terms, Marijn Ontwerp claimed for payment of statutory interest and collection costs. Hanson argued that the standard terms were not applicable as they were not handed over to him before, or at the time the agreement was concluded. Marijn Ontwerp argued that the terms applied because a copy of the terms was attached to the original offer of 22 March 2006, this offer contained a reference to Marijn Ontwerp’s website and Hanson was given the opportunity to request a copy of the terms.

The Court’s view was that as the internet has become such a commonly used medium, making standard terms available electronically is a valid alternative to handing over paper copies of the terms. Consequently, the Court’s view was that it was irrelevant whether the standard terms had actually been attached to the offer. The fact that the offer referred to the website of Marijn Ontwerp from which the terms were available was considered sufficient to meet the legal requirements of article 6:234 sub 1 of the Dutch Civil Code. As Hanson had not argued that it was impossible for him to view the terms online, the Court dismissed Hanson’s claim that the standard terms were voidable.

Legal justification for this decision?

As we have seen, the main question in this case was whether it is sufficient for non-electronically concluded agreements to refer to standard terms contained on a website in order for the terms to apply. Under Dutch law, the other party must be given sufficient opportunity to review the standard terms. Article 6:234 sub 1 Dutch Civil Code states that this opportunity is given when the standard terms are handed over to the other party prior to, or at the moment of, conclusion of the agreement. An exception to this general principle is where the supplier cannot reasonably be expected to hand over the terms at this moment. In this situation, it would be sufficient for the supplier to indicate where the terms can be found and to state that the terms will be sent over immediately upon request.

Under Dutch law, therefore, the question that should have been answered is whether Marijn Ontwerp could reasonably be expected to hand over the standard terms to Hanson at the time the agreement was concluded. Considering that Marijn Ontwerp stated that the terms were, in fact, handed over to Hanson as an attachment to the offer made on 22 March 2006, it can be assumed that handing over the terms at such moment was not a problem. It therefore seems unlikely that the exception would have been applicable to this case.

Providing a hyperlink to standard terms may be sufficient where the agreement is concluded electronically. In this case, provided that certain conditions are met, Dutch law permits the supplier to make terms available electronically, through a hyperlink for example, prior to, or at the moment of, conclusion of the agreement. As the agreement between Marijn Ontwerp and Hanson was not however, concluded electronically, this situation cannot apply.

In light of the above, the Court’s decision seems contrary to the provisions of the Dutch Civil Code.

Legislative proposal

A legislative change has been proposed that is significant to this decision. This proposal seeks to amend certain provisions of the Dutch Civil Code including article 6:234. The proposal may allow standard terms to be provided electronically even if the agreement is not concluded electronically. The proposal’s explanatory memorandum states however, that merely referring to a website is insufficient, as this would require the other party to search for the applicable terms on the website. The legislative proposal also states that standard terms which apply to non-electronically concluded agreements can only be provided electronically and in accordance with (the proposed) article 6:234 in the event the other party expressly consents to this. Therefore, also in light of the new legislative proposal, the Court’s ruling seems to exceed the limits of the law.