What is a long-term contract (duurovereenkomst) under Dutch law?

Dutch term: Duurovereenkomst | Legal basis: Case law (HR)

A long-term contract (duurovereenkomst) is a continuing commercial relationship running for an indefinite or extended period, such as a distribution agreement, supply agreement, franchise or cooperation arrangement. Dutch law has developed specific case law on the termination of such contracts.

The Dutch Supreme Court has held in a line of cases that an indefinite-term duurovereenkomst can generally be terminated, but only with due observance of a reasonable notice period and, in some cases, against payment of compensation for specific investments made in reasonable reliance on continuation. What counts as reasonable depends on the duration, the dependency of the terminated party, the investments made, the time needed to find alternatives, and industry custom.

Why it matters for international businesses

For international businesses with long-running Dutch trading relationships, termination of a duurovereenkomst without adequate notice can trigger substantial compensation claims. Taking legal advice before serving notice is almost always worthwhile.