Do I always need a notice of default before terminating in the Netherlands?

Often yes. Unless performance is permanently impossible or a deadline has passed, BW generally requires putting the party in default with a cure period first.

Is any breach enough to terminate under BW 6:265?

In principle, but a breach that is too minor given its consequences does not justify dissolution; parties often narrow this by contract.

What happens to payments already made after a contract is dissolved?

Dissolution triggers a mutual duty to undo what has been performed (ongedaanmaking) under BW 6:271, so payments and deliveries must be settled; only partly performed contracts may allow a reasonable price claim.

Can a party terminate immediately for insolvency of the other?

Yes, if the clause lists insolvency as an automatic termination trigger. Without such a clause, insolvency alone is not necessarily a breach, and termination still depends on the contractual and statutory tests.

What damages can an innocent party claim after terminating for cause?

Damages for all losses caused by the breach, including the cost of sourcing a replacement, subject to the duty to mitigate and any liability cap in the contract.

Termination for Cause Clause

Allows a party to end the contract when the other materially breaches, often after a chance to cure.

What it is

Termination for cause lets the innocent party end the agreement when the other commits a material breach, becomes insolvent, or repeatedly defaults. Under Dutch law this typically takes the form of ontbinding, available for any non-trivial failure to perform under BW 6:265.

Why it matters

It is the contract's safety valve against a defaulting counterparty. Clear cure periods and a precise definition of "material breach" prevent disputes about whether termination was justified; wrongful termination can itself be a breach.

How to apply it

Define material breach and list automatic triggers such as insolvency.
Provide a cure period and require a notice of default (ingebrekestelling) where needed.
State the effect of termination and which obligations survive.
Address restitution and settlement of work performed up to termination.

Sample wording

Either party may terminate this Agreement with immediate effect if the other commits a material breach that, being curable, is not cured within thirty (30) days of written notice.

Negotiation tips

• Negotiate which breaches are "incurable" and allow immediate termination.
• Consider contractually narrowing the broad BW 6:265 right for minor failures.

Common pitfalls

• Terminating without the required notice of default, making the termination wrongful.
• Leaving "material breach" undefined, so any minor default is argued to justify exit.

Legal references

Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.

Frequently asked questions

Common questions about this clause.