Article 6:248 of the Dutch Civil Code explained: good faith in contracts

Dutch term: Artikel 6:248 BW | Legal basis: Article 6:248 of the Dutch Civil Code

Article 6:248 of the Dutch Civil Code is the most powerful provision in Dutch contract law. Paragraph 1 (supplementary effect / aanvullende werking): a contract binds the parties not only to what they have agreed, but also to what follows from the nature of the contract, from law, from custom and from the requirements of reasonableness and fairness. This means the court can supplement the contract with obligations the parties did not explicitly agree on. Paragraph 2 (derogatory effect / derogerende werking): a rule that would follow from the contract does not apply to the extent that, in the circumstances, its application would be unacceptable according to the standards of reasonableness and fairness. This means the court can override even clearly drafted contractual terms.

The derogatory effect is the more dramatic power: it allows a Dutch court to set aside a contractual provision that produces an unacceptable outcome in the specific circumstances. The threshold is high in commercial cases between professional parties, but the power is real and is exercised. Relevant factors include the nature of the contract, the parties' relative positions, the consequences of the provision, and whether the outcome was foreseeable at the time of contracting.

Why it matters for international businesses

For international businesses contracting under Dutch law, article 6:248 means that overly aggressive or one-sided clauses carry a risk of judicial correction. It also means that gaps in the contract will be filled by reasonableness, which can work for or against either party.