10.3 Nature and further content of the contract

The circumstance 'nature and further content of the contract' (such as the principal obligation and any express or tacit guarantees) should not, in my opinion, have any hearing on whether the invocation of an exemption clause is deemed unacceptable on the basis of reasonableness and fairness.

The breach of a principal obligation should not preclude the invocation of an exemption clause since such a clause is generally entered into primarily with the principal obligation in mind.

Although I realise that there is a large range of different guarantees, I assumed, for the purposes of this book, that it is possible to speak of a 'normal type' guarantee. Such a guarantee should be characterised as an enhanced obligation to achieve a particular result (obligation de resultat). If breached, the supplier in principle cannot — in contrast to where a 'normar obligation to achieve a particular result is breached — invoke force majeure. By giving the guarantee, the supplier relinquishes this right in advance.

Contrary to the view expressed by many authors, a breach of an express guarantee does not, in my opinion, automatically result in the invocation of an exemption dause being deemed unacceptable on the basis of reasonableness and fairness. Like all other guarantees, express guarantees are, in my opinion, only relevant in the liability phase of a legai action. After that, they play no further role and therefore are of no special significance when deciding whether an exemption clause may be invoked. Tacit guarantees are — or in any case should be — used solely to circumvent the rules regarding hidden defects (verborgen gebreken) in the old Netherlands Civil Code. Once the hidden defect rules have been set aside, the function of the tacit guarantee is exhausted and it serves no further purpose. If parties wish to attach consequences to the invocation of an exemption clause where a principal obligation or guarantee is breached, they should agree on this explicitly.

An imbalance between the price and the possible damage (in the sense of low price, high possible damage) should not, in my opinion, influence whether or not the supplier is liable. It should also not influence the enforceability of an exemption clause even if there is, in addition, an imbalance between the possible damage and the scope of the exemption (in the sense of high possible damage, far-reaching exemption clause). In those situations, a supplier insists on such a far-reaching exemption clause precisely because the price is low.

The possibility of the supplier to take recourse against its prior suppliers, the availability of insurance coverage under third-party or first-party insurance policies and the question of insurability are circumstances that in my opinion should not, in view of their nature, influence whether or not the supplier is liable. These factors should also not influence whether an exemption clause can be invoked. For one thing, recovery against a prior supplier or under an insurance policy is never certain. Moreover, it should be no business of either the supplier or customer whether the other is insured or whether recovery from a third party is possible and neither of them should be allowed to benefit, other than indirectly, from the fact that this is the case. If a party wishes to benefit directly from the existence of a prior supplier or insurance, it should ensure there are clauses to this effect in the contract.

An ICT supplier can , in general, take out two types of third-party insurance, business liability insurance (AansprakelijkheidsVerzekering Bedrijven (AvB)) and professional liability insurance (BeroepsAanspralcelijkheidsVerzekering (BAv)). An AVB policy covers the liability of the supplier and its subordinates for property damage and personal injury suffered by third parties as well as the financial losses resulting therefrom. A BAV policy covers the liability of the supplier and its subordinates for damage suffered by third parties as a result of a professional error in the performance of the supplier's activities. Both types of policy contain exclusions from coverage, two of which almost always pertain to wilful misconduct and clauses leading to increased liability. These exclusions are not entirely parallel to the exception 'in the case of wilful misconduct or conscious recklessness of the supplier or its top level management'. There are situations in which the supplier cannot invoke the exemption clause but the AVB or BAV insurer must pay.

Guarantees, penalties, liability clauses and indemnity clauses are generally considered to be clauses increasing liability. It is the insurer who must prove that the contract in question contains a clause increasing liability. The exclusion does not apply, however, to the extent the supplier can prove that it would also have been liable in the absence of such a clause.

First-party insurance plays almost no role in ICT practice because (i) the damage usually caused during the performance of an ICT contract is not covered by the most common first-party insurance policies and (ii) first-party insurance covering all or part of that damage is largely unavailable.