Bonaire in Business: Offer and general terms and conditions

Blog

30 May 2018

If parties intend to conclude a contract with each other then there will often be question of an offer of the one party that is accepted by the other party or not. Important aspects of an offer are often the price, the delivery time and the description of what is offered or done. In addition, it is important to agree on detailed legal arrangements about, for instance, the billing and payment method, insurances, liabilities, warranties, confidentiality, personal data, intellectual property rights and the way that and by whom disputes are settled.

Many entrepreneurs use general terms and conditions for this that are declared applicable to the contract. The use, but also the content, of general terms and conditions is regulated mandatorily by law as a result of which it is important, as an entrepreneur, to know how you need to handle this.

Applicability of general terms and conditions

General terms and conditions are only applicable when the general terms and conditions were declared applicable in the contract. As a purchasing entrepreneur you should therefore be aware that it may be included in the offer of your supplier that general terms and conditions are applicable. If you accept the offer, you also accept the general terms and conditions.

Sometimes the general terms and conditions contain provisions that you do not agree with at all. It is then important to expressly indicate in the reaction to the offer that you “reject the general terms and conditions”. The general terms and conditions are then not applicable, but your supplier may decide not to accept your revised counteroffer (after all, you did not accept the general terms and conditions that were part of the offer) as a result of which a contract is not concluded.

Please note that it is not sufficient to refer to your own general terms and conditions. The general terms and conditions of the other party must expressly be rejected.

Taking note of general terms and conditions

To avoid that you are bound by general terms and conditions that you are not familiar with, the law states that you must have been given a reasonable possibility to take note of the general terms and conditions. If this was not the case then you can rely on full or partial cancellation of the general terms and conditions. This implies that the party that uses these general terms and conditions must make sure that a reasonable possibility is offered to take note of them.

The most certain method is to print the general terms and conditions overleaf the stationery or to include the general terms and conditions in the same digital file as the offer and to send this as one set. Should this not be possible (for instance because the general terms and conditions are too extensive to be printed overleaf an airline ticket) then the user of the general terms and conditions must communicate prior to the conclusion of the contract that the terms and conditions are available for inspection with the user or at the office of the Chamber of Commerce or the Court Registry and that they will be forwarded, if so requested.

Content of the general terms and conditions

A clause in the general terms and conditions can be nullified if it is ‘unreasonably onerous’. This is a broad term that was elaborated further in the law. The law includes a so-called ‘black list’ of unreasonable stipulations in contracts with persons (not corporations), examples are: a stipulation that permits the one party to establish whether the contract is complied with properly, the limitation of the rights to rescind and suspend, a possibility of a price increase within three months after the conclusion of the contract without possibility of canceling the contract and automatic renewal for more than a year. If this kind of stipulation occurs in the general terms and conditions then you can rely on its cancellation as a result of which it is no longer applicable.

Apart from the black list the law also contains a ‘gray list’ of stipulations of which it is assumed that they are unreasonably onerous, e.g.: an uncommon term for compliance, no obligation to pay compensation and a notice period exceeding three months. If this kind of stipulation occurs in the general terms and conditions then this clause may be cancelled, unless the user of the general terms and conditions can demonstrate that it is by no means unreasonably onerous in light of the circumstances.

Although both lists are only applicable to the use of general terms and conditions with persons (not corporations), upon application between corporations there may be question of a ‘consequential effect’. Depending on the circumstances and the size of the corporations, the lists can still form a basis for reliance on cancellation of clauses in the general terms and conditions.

Conclusion

General terms and conditions can be a useful tool to agree on further arrangements when concluding a contract. However, it is important that the general terms and conditions are declared applicable (or are actually expressly rejected) and that the other party can take notice of the general terms and conditions in the course of which it is recommended to make the general terms and conditions available when concluding the contract in a way that can be demonstrated afterwards (e.g. by printing them overleaf the offer or indicate upon signature that cognizance was also taken of the general terms and conditions).

The law protects the other party of a user of general terms and conditions by determining that general terms and conditions cannot be unreasonably onerous. For contracts with persons (not corporations) this is elaborated further in black and gray lists that may, however, under certain circumstances also apply to contracts between entrepreneurs.

Tom Peeters is an experienced and specialized real estate lawyer and head of our Bonaire office. He regularly publishes about project development, sustainable energy projects, cooperative structures and (public) procurement. Via this blog he shares his knowledge about these and other legal topics that concern entrepreneurs in Bonaire.