The Netherlands recognizes the principle of freedom of contract. This means that parties, in principle, have the freedom to commence and terminate negotiations.
Under certain circumstances, however, it may be unlawful to terminate advanced on-going negotiations. Whether this is the case, will depend on the specific circumstances of the case. An important factor is whether at a certain point in the negotiations, the other party may expect that the negotiations would yield a contract.
The party that wrongfully terminates negotiations may be required to compensate damage to the other party. If investments have already been made during the negotiation, this damage could be high. It is therefore important that you seek professional advice if you or your opponent wish to terminate negotiations.
Do you have questions about terminating negotiations or would you like to discuss a case? Please contact the Company and Insolvency section.