How a contract works

An agreement or contract is an understanding between 2 or more parties. Rights and obligations arise from this agreement. For example, to do or deliver something, or to pay for it. In this article you will read all about contracts.

Verbal or on paper

A contract is not always in writing. A verbal agreement is just as valid. Nevertheless, agreements on paper are more convenient. Then, if something goes wrong, it is easier to find out what the intention is and hold the other party accountable.

Will agreement

It is important that the parties want the same thing. This is called will agreement. Without an agreement of will, there is no agreement. For example, there is no agreement of will if you conclude an agreement while being threatened. This also applies, for example, if deliberate misinformation is given. This is called fraud.

Determining the content yourself

In the Netherlands, you can determine the content of an agreement yourself. This is called freedom of contract. However, you may not agree anything that is against the law.

Entering into an agreement to commit a robbery, for example, is not allowed. You cannot enforce such an agreement through a court and the law assumes that such a contract never existed. That is called a void agreement.

Some agreements are subject to a compulsory, legal procedure. For example, the delivery of a house or commercial property always must be done via a notarial deed. 

Types of agreements

Contracts can be divided into named and unnamed agreements. With named agreements, the content is regulated by law and you follow a kind of model. These are, for example, contracts for rent and for a loan. For unnamed agreements, the law does not specifically prescribe what must be in them. Think of an agreement you make to get your bike repaired.

Most agreements are 'obligation creating' as well as 'reciprocal'. In such an agreement, both parties are obliged to do something. Think of an employment agreement, rental agreement, exchange agreement or general partnership (vof) agreement.

There are also unilateral agreements, such as a gift agreement. Only the donor is obliged to transfer the property to be donated. The recipient has no legal obligations.

18 or older and legally competent

If you are legally competent and 18 or older, you may enter into an agreement. Are you younger? Then you need permission from your parents or guardian. A contract signed without such consent is subject to reversal.

If you are between 16 and 18 years old, you can ask a judge to 'declare' you an adult by applying for limited legal capacity. Then you will not need permission from your parents or guardian every time. This is cakelike if you run a business at a young age, for example.

Under 16, you can also enter into agreements. Think, for instance, of buying a loaf of bread or an ice cream. That is socially accepted and you can do without parental consent. But you are not allowed to take out an energy or telephone contract without that permission.

Drawing up a contract

Drawing up a basic contract is not difficult at all. However, the contract must contain at least eight points:

  • Who are the parties?
  • What do the parties want from each other?
  • What product or service will be provided?
  • What is the delivery time?
  • What is the duration of the contract?
  • What is the agreed price?
  • Do general terms and conditions apply?
  • Date, place and signature

These points must be adequately described in a contract. The agreements must also be clear to each party. Make sure you have several signed or copied copies of an agreement, so everyone has their own copy to fall back on if needed.

General terms and conditions

Besides a contract, it is wise to regulate peripheral matters via general terms and conditions: 'the small print'. It is useful to draw up general terms and conditions that apply to all your agreements. Then you do not have to discuss all sorts of points with each contract with a customer.

Your contract and the general terms and conditions form one whole. Give the general terms and conditions to your customer before concluding an agreement. If you do not do this, there is a good chance your terms and conditions will not apply.

Read the contract and the terms and conditions carefully beforehand. Take your time to understand what it says. Make sure that the provisions of the main contract correspond with the provisions of the general terms and conditions.

Examples and models

Online you can find all kinds of information on general terms and conditions or contracts. A model agreement is available for each type of agreement. These are standard documents that you can download and adapt or supplement.

Sometimes these documents are free of charge and sometimes providers charge a small fee. Service providers make tailor-made agreements. This is usually more expensive.

KVK and sample contracts

KVK does not have models or sample agreements. KVK is part of the government and is not allowed to compete with commercial service providers. This results in unfair competition.

KVK does provide information on contracts. If you have questions about agreements, please feel free to contact us.