Short Reads

Act against unreasonably long payment effective as of 1 july 2017

Act against unreasonably long payment effective as of 1 july 2017

Act against unreasonably long payment effective as of 1 july 2017

29.07.2017 NL law

On 1 July 2017, the act against unreasonably long payment terms came into effect (the 'Act').

The Act aims to shorten payment terms throughout the supply chain and for SMEs in particular. In short, the Act prohibits large companies acting as purchasers from imposing payment terms of longer than  60 days on SMEs acting as suppliers (or service providers). It does so by providing that:

  • any payment term between a large company as purchaser and an SME as a supplier over 60 days is null and void and will automatically be converted into a 30 days payment term (art. 6:119a section 6 (new) DCC);
  • if a large company makes a payment after the 30 day payment term has lapsed, it owes statutory interest over the days its payment was overdue (from 30 days onwards); and
  • parties cannot waive their right to statutory interest.

What qualifies as a large company or an SME is defined in accordance with accounting laws (Section 10, Book 2 DCC). In short, SMEs are all companies that comply with two or three of the following criteria:

  • balance sheet total < € 20 million
  • net turnover < € 40 million
  • employees < 250

Large companies are all other companies.

As of 1 July 2017 all new agreements between large companies (as purchasers) and SMEs (as suppliers) have to comply with the Act. The Act will only apply to existing agreements after 1 July 2018 (art. 183b (new) Transition Act DCC).

The Act is enforced by SMEs themselves. If a large company imposes a payment term of over 60 days and refuses to pay statutory interest over the days its payment was overdue (from 30 days onwards), the SME can initiate civil proceedings. It has five years to file its claim. After five years the claim becomes time barred, unless of course the time limit was interrupted.

Related news

23.05.2019 NL law
European regulatory initiatives for online platforms and search engines

Short Reads - As part of the digital economy, the rise of online platforms and search engines raises all kinds of legal questions. For example, do bicycle couriers qualify as employees who are entitled to ordinary labour law protections? Or should they be considered self-employed (see our Stibbe website on this issue)? The rise of online platforms also triggers more general legal questions on the relationship between online platforms and their users. Importantly, the European Union is becoming increasingly active in this field.

Read more

01.05.2019 NL law
Termination of an agreement: compelling grounds?

Short Reads - When does a reason given for termination of an agreement qualify as a compelling ground? That was the central question in the Dutch Supreme Court's decision of 29 March 2019 (ECLI:NL:HR:2019:446). Depending on the nature of the agreement and the circumstances of the case, termination may only take place under certain conditions, e.g. only on compelling grounds. 

Read more

21.05.2019 BE law
The International Comparative Legal Guide to Corporate Recovery & Insolvency 2019 - Belgian chapter

Articles - This Guide covers common issues in corporate recovery and insolvency - including issues that arise when a company is in financial difficulties, insolvency procedures, cross-border issues - in 30 jurisdictions. Pieter Wouters and Paul Van der Putten of Stibbe Brussels' Litigation department contributed to the Belgian chapter of the ICLG.

Read more

11.04.2019 NL law
Double roles in attributing knowledge

Short Reads - The knowledge of a person who in fact runs a company can be attributed to the company if the sole director and shareholder is a 'straw man', the Supreme Court confirmed in a judgment of 29 March 2019. The rules by the Supreme Court are not revolutionary or even new. But circumstances essential for the attribution of knowledge are ignored. The double role played by the 'man in charge' raises questions about how to apply the rules as identified by the Supreme Court to the facts

Read more

01.05.2019 NL law
Arbitral award obligating Ecuador to prevent enforcement of USD 8.6 billion order does not violate public order

Short Reads - Due to environmental damage as a result of oil extraction in the Ecuadorian Amazon, oil company Chevron was ordered to pay USD 8.6 billion to Ecuadorian citizens. In order to claim release of liability, Chevron and Texaco initiated arbitration proceedings against Ecuador. Arbitral awards ordered Ecuador to prevent enforcement of the Ecuadorian judgment, leaving the Ecuadorian plaintiffs temporarily unable to enforce their judgment. According to the Supreme Court (12 April 2019, ECLI:NL:HR:2019:565), these arbitral awards did however not violate public order.

Read more

10.04.2019 NL law
Damage due to a defective driveway and the Dutch twenty year limitation period: When does limitation start in case of a continuous event that causes damage?

Short Reads - On 22 March 2019, the Dutch Supreme Court ruled (ECLI:NL:HR:2019:412) that the strict liability for buildings (opstalaansprakelijkheid) is not linked to a specific damaging act but to a damaging condition, as referred to in section 6:174 DCC. Therefore, there is no reason to regard a damaging act as an 'event that caused damage' as referred to in section 3:310 DCC concerning the limitation period for claims for damages.

Read more

Our website uses functional cookies for the functioning of the website and analytic cookies that enable us to generate aggregated visitor data. We also use other cookies, such as third party tracking cookies - please indicate whether you agree to the use of these other cookies:

Privacy – en cookieverklaring