Termination Clauses and the Unacceptability Test: New Guidance from the Dutch Supreme Court

The Dutch Civil Code (DCC) does not contain a general provision on the (im)possibility of terminating such contracts. In principle, parties are therefore dependent on what they have contractually agreed in this regard. Additionally, the standards of reasonableness and fairness (“redelijkheid en billijkheid”) in Article 6:248 DCC may serve as a corrective mechanism.

The corrective effect of the standards of reasonableness and fairness manifests in two forms:

1. Supplementary effect: a contract not only has the legal consequences agreed to by the parties, but also those that, according to the nature of the contract, apply by virtue of law, usage or the standards of reasonableness and fairness;
2. Derogatory effect: a contractual rule binding the parties shall not apply insofar as, in the given circumstances, its application would be unacceptable by standards of reasonableness and fairness.

A key distinction is that invoking the derogatory effect requires satisfying an "unacceptability test", which sets a high threshold. This test does not apply when invoking the supplementary effect.

Reasonableness and Fairness as a Corrective Tool: The Case Law So Far

By their nature, the standards of reasonableness and fairness are difficult to capture in rigid rules. Nevertheless, in its judgment of 2 February 2018 (Goglio, ECLI:NL:HR:2018:141), the Dutch Supreme Court outlined how this corrective mechanism operates in the context of terminating continuing performance contracts. We discussed this judgment previously in this blog post. In brief, the Supreme Court ruled as follows:

• If the contract contains no termination clause, then it is, in principle, terminable. Based on the supplementary standards of reasonableness and fairness, additional conditions may apply – such as the requirement of a sufficiently compelling reason for termination or the observance of a notice period;
• If the contract does contain a termination clause, then, in principle, what the parties agreed applies. However, additional requirements may be imposed based on the supplementary standards of reasonableness and fairness;
• In both scenarios, termination may, in certain circumstances, be deemed unacceptable under the standards of reasonableness and fairness.

Despite this ruling, legal practitioners remained uncertain about the precise operation of these standards as a corrective mechanism. For example, it remained unclear to what extent a contractual termination clause could be supplemented without simultaneously derogating from it. This distinction is critical, as invoking the derogatory effect requires satisfying the unacceptability test.

The Supreme Court's 2025 Ruling

This issue lay at the heart of the present case. The parties had entered into a continuing performance contract that included a one-month notice period. DPD terminated the contract in line with that period. The counterparty, Get Moving et al., argued that the supplementary – or, if necessary, derogatory – standards of reasonableness and fairness precluded termination on such short notice.

The Court of Appeal agreed and ruled that, based on the supplementary standards of reasonableness and fairness, DPD should have observed a longer notice period. Since it had not, DPD was liable for damages.

In cassation, DPD argued, among other things, that the Court of Appeal had erred by failing to apply the unacceptability test. The Supreme Court upheld this argument. It held that the Court of Appeal had, in effect, nullified the contractual termination clause by ruling that DPD was required to observe a longer notice period. According to the Supreme Court, nullifying a contractual provision requires the application of the unacceptability test.

Furthermore, the Supreme Court noted that the unacceptability test would not have been necessary had the Court of Appeal instead ruled that DPD owed additional damages for terminating on one month’s notice. In that case, the contractual clause would have remained intact; a supplementary obligation would merely be layered on top, without undermining the contractual regime itself.

Navigating Contractual Boundaries: When is the Unacceptability Test Required?

This judgment further clarifies the boundary between the supplementary and derogatory application of the standards of reasonableness and fairness. When parties have agreed on a termination clause, departing from the specifically agreed terms is only permissible if the high threshold of the unacceptability test is satisfied.

However, a termination clause may be supplemented without satisfying that test, provided the parties have not made a specific arrangement on the point in question. Whether an issue has been addressed by the parties must be assessed by interpreting the contract.