What is annulment (vernietiging) of a contract under Dutch law?

Dutch term: Vernietiging | Legal basis: Articles 3:44 and 6:228 BW

Annulment (vernietiging) under Dutch law invalidates a contract that was defective at the time of formation, treating it as if it had never validly come into existence. The grounds include mistake (dwaling, article 6:228 BW), fraud (bedrog, article 3:44(3) BW), duress (bedreiging, article 3:44(2) BW), and abuse of circumstances (misbruik van omstandigheden, article 3:44(4) BW).

Annulment is invoked by extrajudicial declaration or court order and must be exercised within three years of the moment the ground became known. The retroactive effect means that performance already rendered must be reversed. Annulment is distinct from rescission (ontbinding), which applies to valid contracts terminated for breach, and from termination (opzegging), which ends a contract prospectively.

Why it matters for international businesses

For international businesses, annulment is most commonly encountered in transactions where one party relied on inaccurate financial information, product specifications or regulatory representations.