Is a reference to general terms and conditions between two professional parties sufficient for them to apply to the contract?
Almost every business you come across has general terms and conditions, whether you buy something online as a consumer or act as an entrepreneur with other businesses. General terms and conditions state the more general terms (as the term suggests) that apply to your contracts, such as payment conditions, liabilities or guarantees. General terms and conditions are not mandatory, but they offer an efficient way to prevent having to draw up endless individual contracts so you cover every potential risk. The general terms and conditions are usually sent with the contract and form an integral part of the agreement.
Referring to the general terms and conditions
Sometimes, however, a discussion of whether the general terms and conditions apply to the specific contract can arise. This happened in the case before the Court of Appeal Amsterdam.
Important to note is how the general terms and conditions were referred to in the contract:
- In the preamble of the agreement between the parties, a reference to the general terms and conditions was made: "These agreements should always be considered in conjunction with the General Terms and Conditions (GTC) in Annex 1 (…).
- In the following sentences, a few provisions of the GTC were excluded, and priority was given to the contract in case of a conflict between the GTC and the contract.
- At the end of the agreement, directly above the signatures of the parties, the following is stated: "The undersigned declares to have taken notice of attachment(s) listed below", and directly under the signatures of parties: "Annex 1 General Terms and Conditions (as defined by ICT-Office)."
The issue at hand was the arbitration clause in the GTC. The plaintiff claimed that merely a reference to the GTC was made in the agreement and no "declaration of application", resulting in the GTC not applying to the contract.
Haviltex criteria
The court disagrees with this reasoning. As usual in case law, the interpretation of an agreement is done by applying the so-called Haviltex criteria, which focuses on the meaning the parties "could reasonably attribute to those provisions in the circumstances and what they could reasonably expect from each other in that regard". Also important are the social circles the parties belong to and the legal knowledge that can be expected from these parties.
Reference to the GTC
The court continues to assess that both parties are professionals who may be expected to understand the meaning of a reference to terms and conditions. Looking at the wording and reference to the GTC, most notably the 'priority rule' in case of a conflict between the GTC and the contract, it is clear that the GTC apply as general terms and conditions and are not merely a source of reference for the terminology. Furthermore, the end of the contract also stated that the parties had taken note of the GTC, and they were attached to the signed contract. Therefore, in the court's opinion, it was sufficiently established that the GTC formed part of the agreement between the parties. Consequently, the arbitration clause in the GTC was also legally valid in this case.