Future extra-contractual liability law: implications for your contracts
Blog
20 June 2024
We try to answer these questions using a brief summary of the new regulations, followed by a concrete example.
There are essentially two important changes:
- Abolition of the ban on concurrence
Currently: The ban on concurrence means that a client (A) who suffers damage due to the non-performance of a contractual obligation by their contractor (B) cannot file a non-contractual claim against (B) unless a crime was committed.In the future: With the abolition of this ban, the client (A) can choose to file a non-contractual claim against (B) without a crime having to be committed.This provides (A) with more flexibility and options to obtain compensation, especially in situations where (B)’s insurance excludes contractual damage but covers non-contractual damage.
- Abolition of the quasi-immunity of the performing agent (coexistence prohibition)
Currently: A client (A) cannot directly hold an auxiliary person (C) (i.e., performing agent) of their contractor (B) accountable for errors unless these errors also constitute a crime. This granted the auxiliary person (C) quasi-immunity.In the future: With the abolition of the coexistence prohibition, (A) can now also file a non-contractual claim against (C) for errors that caused damage without a crime having to be committed. This means that auxiliaries such as employees, directors, or subcontractors can now be held directly liable for their mistakes.
Concrete Example
What is the impact?
| Previously | From now on |
| DataDrive and Hans Techson have not entered into a contract between themselves. Unless Hans Techson is alleged to have committed a crime, Hans Techson cannot be sued by DataDrive. | Although Hans Techson and DataDrive have still not entered into a contract, Hans Techson can be sued directly by DataDrive and should therefore cover himself. |
How can Hans protect himself?
Fortunately, the legislation provides a protection mechanism for Hans Techson (the liable party/performing agent).
(A) Hans Techson can invoke: (i) statutory as well as (ii) contractual defenses.
Statutory defenses include, among others: statute of limitations, or the limitation of directors’ liability under the Companies and Associations Code.
Contractual defenses include: exoneration and liability-limiting clauses included in the contract.
Hans Techson can invoke not only the defenses in his own contract (v) but also those included in the main contract (u).
(B) Additionally, non-contractual liability can also be contractually excluded, except in the case of intent or when damage is the result of a crime or physical harm. To the extent that non-contractual liability is excluded in the main contract, DataDrive can no longer hold Hans Techson accountable.
When does this new law come into effect?
The entry into force of this legislation has no transition period or arrangement. Consequently, these rules will be immediately applicable to your new agreements from January 1, 2025. Whether they will also apply to your existing agreements is already a matter of debate. To be on the safe side, you should assume that this will be the case.
What can I do today?
It is advisable to have your agreements screened and, if necessary, adjusted before the end of 2024 to meet the protections you wish to provide. It is crucial to identify and minimize the risks in your current agreements.
Contact one of the members of the DGDM Corporate Law Team to discuss how we can help you with concrete proposals to make your contracts future-proof.
Want to know more?
Do you have any questions or need advice for your business?
