Can somebody else's conduct qualify as your acknowledgement of a claim?

Can somebody else's conduct qualify as your acknowledgement of a clai

Can somebody else's conduct qualify as your acknowledgement of a claim?

14.07.2017 NL law

The acknowledgement of a claim interrupts the five years' prescription period for claims for payment (art. 3:318 DCC). On 21 April 2017, the Dutch Supreme Court answered the question whether the conduct of one company can qualify as the acknowledgement of a claim by another company (ECLI:NL:HR:2017:755). 

The answer was "yes", but the Supreme Court evaded the fundamental questions raised by this case – set out extensively by the Advocate General – and chose to render a judgment applicable solely to the case at hand. It would appear that there is room for further legal development on this issue.

The attribution of the acknowledgement of a claim is uncharted territory in Dutch law. While the Dutch Civil Code (DCC) provides rules about the attribution of legal acts (through a power of attorney or implied authority) and while there is clear case law about the attribution of wrongful acts to legal entities (in particular HR 6 April 1979, Kleuterschool Babbel, and HR 11 November 2005, ECLI:NL:HR:2005:AT6018), hardly any rules or legal literature exist about the attribution of other types of conduct. The criterion used by the Supreme Court  in its 21 April 2017 judgment is quite vague: the first company had "such a responsibility for the conduct of" the second company that this justified the conduct of the second company being attributed to the first company.

The Supreme Court rendered its judgment in a dispute between a construction company (Pellikaan) and a sports centre (Special Sports). One of the questions to be answered was whether the construction company's claim against the sports centre had prescribed. In 2003 and 2004, the parties had agreed that the sports centre would supply the construction company with so-called 'power plates' as a way of paying outstanding invoices. The last correspondence between the parties about the invoices dated from July 2005. It was not until 7 September 2012 that the construction company demanded payment again. The sports centre replied that the claim had prescribed, now that more than five years had passed since the last reminder. However, on 18 September 2007, four years and 354 days earlier, the construction company had requested a former affiliate company of the sports centre (Power Plate International) in writing to deliver three power plates, referring to the agreement with the sports centre. The affiliate company – which had the same parent company as the sports centre until February 2006 – had supplied the power plates as requested.

One of the central questions in this case was whether the supply of the power plates by a different legal entity than the debtor qualified as an acknowledgment by the debtor and interrupted the prescription period. In his opinion (ECLI:NL:PHR:2017:37) the Advocate General notes that Dutch law has rules for the attribution of legal acts (like entering into an agreement) and for the attribution of acts not intended to have legal effect (like wrongful acts), but not for acts that do not appear to classify as either, like the acknowledgement of a claim through certain conduct. I made a similar remark in par. 5.2 of my dissertation, on which I wrote my previous blog, with regard to, for example complaining (art. 6:89 and 7:23 DCC), abusing circumstances (art. 3:44 (4) DCC) and making a statement that the obligor will fail in his performance (anticipatory breach, art. 6:80 (1) under b DCC).

The Advocate General is of the opinion that an acknowledgment falls into a category in between a legal act and an act not intended to have legal effect. He calls it – inspired by the laws of Germany, Austria and Switzerland – a geschäftsähnlige Handlung ("a legal-like act"). He proposes adopting a rule holding that "the conduct of somebody else than the debtor qualifies as an acknowledgment by the debtor if the appearance created by such conduct is either a result of the debtor's own doing or must, according to public opinion, be attributed to him on other grounds". This criterion comes close to the criterion used by the Supreme Court for attributing the appearance of representative authority, i.e. holding a party responsible for a legal act performed by a person lacking the power to represent this party.

Adopting such a rule would mean a fundamental step in the development of law, not preceded by published case law in lower instances or by a fundamental discussion in the legal literature. It is therefore not surprising that the Supreme Court chose not to deliver a fundamental judgment, but one that only relates to the case at hand. According to the Supreme Court, the Court of Appeal's judgment implies that Special Sports "carried such a responsibility for the delivery by Power Plate International that this justifies this delivery being attributed to Special Sports as an acknowledgment." It would appear to me that there is room for a fundamental discussion – and legal development – with regard to this issue.

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