Large counterparties and general terms: when does the right to nullify standard clauses lapse?

Large counterparties and general terms: when does the right to nullify standard clauses lapse?

Every entrepreneur using general terms and conditions knows: those terms can be nullified if they were not properly provided to the other party. But does that also apply when the counterparty is a large, professional corporation? The Dutch Supreme Court gave an important answer on 20 May 2022 (ECLI:NL:HR:2022:719) in a case involving a silo fire, wood pellets, and a liability cap of just over €22,000.

The facts: a silo fire with millions in damages

Peterson Agricare & Bulk Logistics B.V. (Peterson ABL) had deposited a large quantity of wood pellets — owned by energy company Essent — with European Bulk Services B.V. (EBS) for storage. The storage agreement was governed by EBS's general terms and conditions, which included a liability cap of only €22,689.01 per assignment.

On 7 March 2004, a fire broke out in the silo due to self-heating (spontaneous combustion) of the wood pellets. All pellets were destroyed and the silo suffered serious damage. The resulting claims and counterclaims eventually reached the Supreme Court.

Peterson ABL argued that EBS's general terms were voidable because they had not been properly provided (Articles 6:233(1)(b) and 6:234 of the Dutch Civil Code). The key question: could Peterson ABL — as a large corporation — invoke that defence?

The legal framework: Article 6:235(1) of the Dutch Civil Code

Dutch law protects small, inexperienced parties against unfair standard clauses. But for large counterparties, an exception applies. Under Article 6:235(1) of the Dutch Civil Code, certain legal entities cannot invoke the nullification of general terms on the grounds of improper delivery. This applies to legal entities that:

• at the time of concluding the agreement had most recently published their annual accounts (Article 2:360 of the Dutch Civil Code); or
• to whom Article 2:403(1) of the Dutch Civil Code had been applied (the so-called 403 declaration, under which a group company may publish limited annual accounts because the parent publishes consolidated accounts).

The rationale: large corporations are professional enough to request and assess the terms themselves. They do not need the protection of the delivery rules.

The key question: does the 403 declaration apply even if not all conditions were met?

Peterson ABL argued that Article 2:403(1) had not been correctly applied to its annual accounts — claiming not all formal requirements had been met. Therefore, so the argument went, it was not a 'large counterparty' within the meaning of Article 6:235(1) and could invoke nullification of the terms.

The Supreme Court rejected this argument. The answer is clear:

For the application of Article 6:235(1), it is sufficient that Article 2:403(1) was 'applied' in drawing up the annual accounts, even if it subsequently turns out that not all formal requirements were met.

Whether the 403 declaration was legally watertight is therefore irrelevant for Article 6:235(1). If a company has factually made use of the 403 arrangement — however it was applied — it qualifies as a large counterparty and cannot nullify the general terms on the grounds of improper delivery.

Other rulings: storage and contributory negligence

Beyond the general terms issue, the ruling also contained important holdings on:

Risk liability of the depositor (Article 7:601(3) of the Dutch Civil Code)

The Supreme Court confirmed that Peterson ABL as depositor was liable for EBS's damage. The risk of self-heating is inherent to storing biomass; this risk falls within the depositor's sphere of risk. The fact that EBS itself had also fallen short (by failing to conduct temperature measurements) did not fully discharge Peterson ABL's liability.

Contributory negligence of EBS (Article 6:101 of the Dutch Civil Code)

EBS had failed to conduct regular temperature measurements in the silos as required by its operating permit. This was attributed to EBS as contributory negligence: the court applied a split of 2/3 (Peterson ABL) versus 1/3 (EBS's own fault), leading to an adjusted damages apportionment in cassation.

What does this mean in practice?

1. Verify whether your counterparty is a 'large' entity

Before invoking improper delivery of general terms, check whether your counterparty falls under Article 6:235(1). Has it published its annual accounts, or has the 403 arrangement been applied? If so, as the user of the terms you have extra protection: the counterparty cannot nullify the terms on formal grounds.

2. Factual use of the 403 arrangement is sufficient

If your counterparty has factually made use of the 403 exemption — even if that exemption may not have been fully compliant — it qualifies as a large counterparty. As the user of general terms, you do not need to verify whether all formal requirements of Article 2:403(1) were correctly met.

3. Proper delivery remains essential for small counterparties

The protection of Article 6:235(1) does not apply to small companies, sole traders, or parties not required to publish annual accounts. For that group, correct delivery of general terms — preferably demonstrable in writing or digitally — remains essential.

4. Storage of hazardous goods: be alert to risk liability

Anyone depositing goods with inherent hazards (such as biomass) for storage may be liable under Article 7:601(3) for damage suffered by the storage operator — even without personal fault. Ensure adequate insurance cover and make clear agreements on risk management.

5. Contributory negligence can reduce liability

The contributory negligence provision of Article 6:101 can also play a role in storage disputes. A storage operator who itself falls short of its duty of care (such as failing to conduct temperature measurements) risks having its damage only partially compensated.

Conclusion

The Supreme Court's ruling of 20 May 2022 clarifies the scope of Article 6:235(1): even if the 403 declaration did not fully meet all formal requirements, the company qualifies as a 'large counterparty' that cannot invoke nullification of general terms on the grounds of improper delivery. For entrepreneurs using general terms and conditions, this is good news: the protection of the delivery rules does not reach large professional counterparties. For smaller counterparties, that protection remains fully in force.

Ruling

This blog post is based on ECLI:NL:HR:2022:719, judgment of the Dutch Supreme Court of 20 May 2022.