Hoofdstuk 9 Summary

Dutch civil law sets out several sanctions in the form of loss of rights due to inactive or inconsistent behaviour of the creditor. This book focuses on two specific manifestations of this mechanism: a specific application of the doctrine of estoppel in Dutch law of obligations and the statutory expiration periods set out by articles 6:89 and 7:23 under 1 of the Dutch Civil Code. These articles stipulate that the creditor loses all of its claims if he does not complain about any defects in the performance of the debtor as soon as possible after discovery of any such defect.

Estoppel in Dutch law of obligations is an old doctrine, which has lost some of its importance since the introduction of the new Dutch Civil Code in 1992. By introducing short, mostly five-year limitation periods, the doctrine of estoppel was pushed back. Moreover, in 1992, the statutory expiration periods of article 6:89 and 7:23 under 1 of the Dutch Civil Code were introduced. After their introduction, these statutory expiration periods led an almost dormant existence for about a decade. After the turn of the millennium, debtors discovered these favourable provisions and started to successfully raise defences based on them in legal proceedings.

Nowadays, situations in Dutch law of obligations formerly governed by the doctrine of estoppel are predominantly governed by these special provisions of the law. Academics tend to have a critical attitude towards these special provisions: the draconian nature of article 6:89 and 7:23 (1) of the Civil Code is denounced. The Supreme Court has mitigated the effect of these expiration periods in its case law. It has mainly done so by establishing that the expiration period of article 6:89 and 7:23 (1) of the Dutch Civil Code is not easily violated absent any concrete disadvantage on the part of the debtor.

The purpose of this book is to evaluate the current status of the doctrine of estoppel and the statutory expiration periods of article 6:89 and 7:23 under 1 Dutch Civil Code. This book also examines the relationship between these legal phenomena and the statutory limitation periods in the Dutch law of obligations.

The starting point of this dissertation consists of an examination of the legal nature of the doctrine of estoppel and the statutory expiration periods of article 6:89 and 7:23 under 1 Dutch Civil Code in Chapter 2. In the relevant Dutch literature, both doctrines are associated with the concept of Obliegenheit. I examine this concept by relying on German legal doctrine from which the concept originates. The conclusion is that an Obliegenheit essentially constitutes a duty for the creditor to behave consistently towards the debtor. Violation of an Obliegenheit results in a sanction that aims to eliminate the specific adverse consequences of reprehensible inconsistent creditor behavior on the debtor's side, or to protect the legitimate trust of the debtor. An Obliegenheit can thus be seen as a duty of consistency. The sanction has a proportional character. This ties in well with the doctrine of estoppel and the statutory expiration periods and provides useful starting points for an analysis of the current status of these legal figures.

Based on the Obliegenheit-character of the doctrine of estoppel and the statutory expiration periods of article 6:89 and 7:23 under 1 Dutch Civil Code, these legal phenomena can be distinguished from the limitation periods in Dutch law of obligations. Indeed, unlike estoppel, limitation periods as such do not involve a duty to take action against the debtor. Limitation periods merely impose a sanction on inaction for a certain period of time. Contrary to what has been suggested earlier in the literature, it is concluded in Chapter 3 that the limitation periods of mostly five years should not be viewed as a standardized form of estoppel.

Building on this distinction, Chapter 3 then examines the extent to which the doctrine of estoppel and the expiration periods of article 6:89 and 7:23 under 1 Dutch Civil Code cut short limitation periods. That is, is a defence based on estoppel or an expiration period accepted within a deadline as set out by relevant limitation periods? The conclusion is that in most cases estoppel and the expiration periods do not interfere with the relevant limitation rules in an undesirable way.

Next, chapter 4 discusses the scope of application of the statutory expiration periods. Based on the Obliegenheit-character of these expiration periods, this chapter attempts to provide guiding answers to matters of scope. Most of these questions specifically relate to article 6:89 of the Dutch Civil Code. The conclusion is that the scope of application of article 6:89 Dutch Civil Code extends to all obligations. Articles 6:89 and 7:23 under 1 Dutch Civil Code apply to situations of partial default, but not to a situation of full non-performance by the debtor. Article 6:89 Dutch Civil Code also applies to the obligation to pay a sum of money. In addition, article 6:89 Dutch Civil Code applies to the obligation of forbearance and continuous obligations. Finally, article 6:89 Dutch Civil Code does in principles not apply to claims based on directors' liability. The latter is likely different if the company's claim is alternatively based on a breach of an employment or management contract with the director.

My findings on the Obliegenheit-character of the doctrine of estoppel and the expiration periods of article 6:89 and 7:23 under 1 Dutch Civil Code raise a number of questions regarding the substantial criteria for application of these legal phenomena, which I discuss in Chapter 5. In that context, I first discuss whether it is desirable to assume estoppel in the absence of any disadvantage on the side of the debtor. The Supreme Court holds that this is possible in case the debtor legitimately expected that the creditor would not initiate a claim against him anymore. The conclusion on this point is that estoppel based on such legitimate expectations is not problematic if the bar for assuming a tacit waiver of rights is also met. In addition, it follows from case law about estoppel based on legitimate expectations that disadvantage on the debtor-side has often occurred anyway. Therefore, the number of problematic cases is probably fairly low. The second point that is discussed in this chapter is whether a duty to investigate is assumed to easily in the context of the expiration periods of article 6:89 and 7:23 under 1 Dutch Civil Code. Based on the available Dutch case law, the general conclusion is that this does not seem to be the case. In part, this can be explained by the fact that the Supreme Court raises thresholds for assuming a duty to investigate in cases of unequal relationships between opposing parties and in cases of information asymmetry. Thirdly, it is discussed that the Supreme Court has focused its case law on the expiration period itself, whereas it follows from the Obliegenheit nature of these expiration periods that the lapse of time is not the decisive element to determine whether the expiration period was violated. To the contrary, it is of key importance whether the creditor should have filed a complaint with the debtor at a specific moment but remained silent instead. In case law of lower courts, the Supreme Court’s approach sometimes leads to a focus on the length of the expiration period, where in fact a specific moment to complain occurred. Finally, the proportional element of the sanction for breach of an Obliegenheit raises the question of whether the sanction for breach of article 6:89 and/or article 7:23(1) of the Civil Code should only be a full forfeiture of rights. The conclusion on this point is that a wider array of sanctions is desirable, despite contrary views of the legislator and Supreme Court.

Finally, in Chapter 6 attention is paid to contractual expiration periods. This chapter discusses the interpretation of such contractual obligations and the role that the statutory framework of article 6:89 and/or article section 7:23 under 1 of the Dutch Civil Code may or may not play there. This analysis distinguishes between various types of clauses. For each type, a number of relevant aspects and circumstances are highlighted for their interpretation and application.