How do representations and warranties work under Dutch law?

Dutch term: Garanties en verklaringen | Legal basis: Freedom of contract + Book 6 BW

Representations and warranties in Dutch commercial contracts (particularly in M&A share purchase agreements) are contractual statements by one party about the accuracy of specific facts or the status of specific matters. If a representation or warranty proves untrue, the warranting party is liable for damages without the other party needing to prove fault.

Dutch law does not distinguish between 'representations' and 'warranties' in the common-law sense. Both are treated as contractual undertakings, and breach triggers the general Dutch remedies for breach of contract (damages under article 6:74 BW, rescission under article 6:265 BW). However, SPA practice in the Netherlands increasingly follows Anglo-American drafting conventions, including disclosure letters, de minimis thresholds, basket/cap mechanisms and warranty insurance.

Why it matters for international businesses

For international buyers and sellers, understanding that Dutch law treats representations and warranties as standard contractual obligations, without the common-law distinction between representations (giving rise to misrepresentation claims) and warranties (giving rise to breach of contract claims), is important for drafting and dispute resolution.