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An important legal question. Often, both the client and the contractor will (retrospectively) appeal to their own general terms and conditions. This conflict is referred to as the ‘battle of forms'.</p><p>This article will elaborate on the question of how to know which general terms and conditions apply. When answering this question, two situations can be distinguished: national disputes (ie, two parties from the Netherlands) and international or cross-border disputes (ie, a client from the Netherlands and a contractor from Germany). The consumer law side will be left out. </p> <h1>National disputes (first shot rule)</h1> <p>In national disputes, the so-called 'first shot rule' applies under Dutch law. This simply means that the party that refers to its general terms and conditions in the first (online) document sent ‘wins’ the battle.</p><p>Pursuant to Article 6:225(3) of the Dutch Civil Code, the second reference to the general terms and conditions has no effect if it does not also expressly reject the applicability of the general terms and conditions indicated in the first reference. Merely referring to one's general terms and conditions when accepting an offer is insufficient. For clarification purposes, here are three examples:</p><ol><li>Party X makes an offer containing a reference to its general terms and conditions. Party Y accepts this offer containing a reference to its general terms and conditions. In principle, under the first shot rule, Party X's general terms and conditions then apply.</li><li>Party X makes an offer containing a reference to its general terms and conditions. Party Y accepts this offer containing a reference to its general terms and conditions, and Party Y expressly rejects the applicability of Party X's general terms and conditions in that context. Party Y indicates that it only wants to do business if its general terms and conditions apply. In this case, in principle, Party Y’s general terms and conditions apply.</li><li>Party X makes an invitation to make an offer containing a reference to its general terms and conditions (of Party X). Party Y makes an offer containing a reference to its general terms and conditions. Party X accepts Party Y's offer with a reference to its general terms and conditions (of Party X) but does not expressly reject Party Y's general terms and conditions. In principle, Party X's general terms and conditions still apply in this case because Party X first referred to its general terms and conditions in writing (the invitation).</li></ol> <h1>The Vienna Convention</h1> <p>In international disputes, both parties will often have included a choice of law clause in their respective general terms and conditions. Therefore, when assessing which general terms and conditions apply, the competent court will first look at which law would apply to the contract in case the parties had not made a choice of law.</p><p>If the parties have concluded a contract of sale (movable goods), the United Nations Convention on Contracts for the International Sale of Goods – also known as the Vienna Convention – often applies. In that case, the competent court will judge directly based on the Vienna Convention which general terms and conditions apply to the contract, and thus also which law applies on the basis of those applicable general terms and conditions.</p><p>The starting point based on the Vienna Convention is the last shot rule (based on supply, demand and counteroffer). In other words, the general terms and conditions of the party who refers to them last apply.</p> <h1>Choice of law between parties</h1> <p>What if the Vienna Convention does not apply? As mentioned, when both parties refer to their general terms and conditions containing choice of law clauses different from each other, the competent court will consider which law would apply to the contract if the parties had not made a choice of law. This assessment takes place under the Rome I Regulation.</p><p>For example, the contract for the provision of services is governed by the law of the country where the service provider has its habitual residence, according to Article 4(1)(b) of Rome I. Based on the law of the country where the service provider has its habitual residence, it will be assessed which general terms and conditions apply. This can have far-reaching consequences, because the way countries deal with the battle of forms varies widely.</p> <h1>Battle of forms under German law</h1> <p>Germany, for instance, does not have the first shot rule but the knock-out rule. Both parties often use their respective general terms and conditions in contracts between companies. In addition, their forms include a protective clause. This clause explicitly declares the other party's forms as inapplicable and one's own as decisive.</p><p>Courts may determine that the parties did not reach an agreement if the dissent is too strong because both forms are too widely different on important contractual aspects. There has yet to be a meeting of the minds for a joint agreement.</p><p>However, courts mostly uphold the commercial interest of both parties to agree on common ground. For this, courts say that conflicting terms and conditions do not become part of the agreement. Instead, the default rules of dispositive statutory law will apply concerning these conflicting conditions.</p><p>Therefore, each case requires an examination of whether both parties wanted to conclude the contract even though there is no agreement on the contents regulated in the conflicting general terms and conditions. If the answer is yes, the contradictory terms must be conceptually replaced by the respective statutory provisions.</p><p>Despite the regular use of general terms and agreements, the knock-out rule in international B2B contracts will often not apply and protect the German counterpart for other reasons. This is due to German case law and companies' practice of merely referring to their forms instead of attaching them to the contractual communication. Mostly, companies refer to their forms as downloadable from their website. Between German B2B parties, this is generally valid. However, with a non-German company that usually triggers the Vienna Convention, the forms must be attached to the communication before the parties conclude a contract. German companies, used to their national customs which do not retain specialised counsel, often do not know about this exception. Thereby, their protective clause in their forms will not become applicable, and the non-German party will prevail with its general terms and conditions.</p> <h1>Large international differences</h1> <p>Please note that there is a large degree of uncertainty in international legal transactions with regard to the battle of forms. The outcome of the question of which general terms and conditions apply thus depends partly on which law applies, but also on which court in which country should answer this question. Therefore, it is advisable to make clear written agreements during contract negotiations as to which general terms and conditions apply, which law applies and which court has jurisdiction to rule on any disputes. Furthermore, as seen from the surprising outcome of the failed practice in Germany, one must also take the implementation of the local rules into account.</p><p>Finally, it is not a matter of which party prevails with the choice of its local laws and general terms and agreements. It is much more relevant to achieve the best result for the client, who can be only one of the parties. This forum shopping may require choosing the most preferential law, including the scrutiny of its battle of forms rules. In this context, it may be best for the client not to push forward its laws and instead refer to the Vienna Convention, known to both parties’ (specialised) counsel and available in the most widely used languages.</p><div class="row"> <div class="col-md-12"> <div class="related-links mt-2"> <h3>Similar topics</h3> <ul class="include-chevron"> <li><a href="/articles?tag=Terms and conditions; Battle of forms; Dutch law; German law" title="">Terms and conditions; Battle of forms; Dutch law; German law</a></li> <li><a href="/articles?tag=Vienna sales convention" title="">Vienna sales convention</a></li> <li><a href="/articles?tag=Choice of law; Competent court; Business-to-business; Rome I convention; Negotiate" title="">Choice of law; Competent court; Business-to-business; Rome I convention; Negotiate</a></li> </ul> </div> </div> </div> </div> <ul class="share"> <li> <a data-href="https://twitter.com/intent/tweet?url=https://www.ibanet.org/dutch-law-general-terms-and-conditions" target="_blank" class="fab fa-twitter"></a> </li> <li> <a href="https://www.facebook.com/sharer/sharer.php?u=https://www.ibanet.org/dutch-law-general-terms-and-conditions" target="_blank" class="fab fa-facebook-f"></a> </li> <li> <a href="https://www.linkedin.com/shareArticle?mini=true&url=https://www.ibanet.org/dutch-law-general-terms-and-conditions" target="_blank" class="fab fa-linkedin-in"></a> </li> </ul> </div></div></div> <div class="container-fluid"> <div class="yCmsContentSlot row"> </div></div> <div class="container"> <div class="yCmsContentSlot row"> </div></div> <div class="container-fluid"> <div class="yCmsContentSlot row"> </div></div> <div class="container"> <div class="yCmsContentSlot row"> </div></div> </div> <div class="bg-light border-top printOff"> <footer class="py-5"> <div class="container"> <div class="row"> <div class="yCmsContentSlot"> <div class="yCmsComponent w-100"> <div class="content"><style type="text/css">footer, .footer-bottom {background: #01277a !important;} .footer-bottom p, footer p, footer address ,footer li, footer a, .footer-bottom a {color: #FFFFFF!important; 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