What is the Plas/Valburg doctrine in Dutch law?

Dutch term: Plas/Valburg | Legal basis: HR 18 June 1982

The Plas/Valburg doctrine, named after the Dutch Supreme Court case of 18 June 1982, established that parties in advanced negotiations owe each other a duty of good faith that can give rise to pre-contractual liability if negotiations are broken off without proper justification.

The doctrine recognises three phases: a free phase where parties can walk away, a middle phase where costs liability can arise, and a final phase where the parties are so far advanced that the other party was entitled to expect a contract, giving rise to potential liability for lost profits. The phase boundaries depend on the circumstances: duration and intensity of negotiations, reliance, specificity of terms discussed.

Why it matters for international businesses

This is the leading Dutch case on pre-contractual liability. For international businesses used to the common-law freedom to walk away from negotiations at any time, Plas/Valburg is one of the most important Dutch-law distinctions to understand.