New Rules for Tacit Extension and Termination of Subscriptions and Other (Consumer) Contracts
Background to the New Rules
According to the Explanatory Memorandum, the purpose of this
bill is to bring an end to "the constant and socially very
undesirable situation that subscriptions and memberships are being
extended, while consumers have no need for these products and
services anymore". At the moment consumers are often bound by
a contract for another year because they did not terminate the
contract in time. This is the reason why restraints will be imposed
on the tacit extension or continuation of contracts. The
termination of contracts will be made easier for consumers as well.
Furthermore, this bill is well in line with the earlier amendment
of Section 7.2a of the Dutch Telecommunications Act, as a result of
which the position of consumers in long-term contracts in the
electronic communications sector has been strengthened.
Brief Overview of the New Rules
The changes will be implemented in the Dutch Civil Code
("DCC") by means of an amendment of the rules pertaining
to unfair contract terms. In this respect, a distinction has to be
made between two types of unfair clauses in general terms and
conditions. On the one hand, there are clauses that are deemed to
be unreasonably onerous and may thus be annulled by the courts (the
so-called black list of Section 6:236 of the DCC). On the other
hand, there are clauses that are only presumed to be
unreasonably onerous (the so-called grey list of Section 6:237 of
the DCC). As a result of this mere presumption, this type of
clauses may be deemed acceptable under certain circumstances which
have to be established by their users.
Changes in relation to clauses deemed unreasonably onerous per se
(Section 6:236 of the DCC)
The key element is the consumers' right to be able
to terminate contracts for the regular delivery of goods or for the
regular performance of services (such as subscriptions). Such
termination must be possible at all times after tacit extension or
renewal with due observance of a notice period of one month. It
does not matter whether the contract has been extended or continued
for a definite or indefinite period of time. It should be noted
that this change is a considerable restriction of the possibility
of tacit extensions. After all, in the current situation extensions
are only deemed unfair as such if they concern tacit extensions for
more than a year (Section 6:236 under j of the BW).
In addition, two new unfair clauses have been added to the black
list. According to sub-section (o), the party using general terms
and conditions is not allowed to demand that the termination should
occur in a different manner than the manner in which the contract
was concluded. This means that if a contract has been concluded by
e-mail, it must also be possible to terminate this contract by
e-mail and that it may not be demanded, for instance, that the
notice of termination is given in a letter. The same applies to the
registration and termination by fax and/or letter and also to oral
agreements.
Finally, pursuant to sub-section (r) it may not be stipulated that
a contract must be terminated at a certain moment (for instance in
November).
Exceptions for (daily) newspapers, weeklies and periodicals
According to the Explanatory Memorandum, the bill provides for an
exception for papers and periodicals on the grounds of their
vulnerable situation. As a result, a tacit extension of no more
than three months is allowed (Section 6:236 under p of the DCC). If
a contract for the regular delivery of (daily) newspapers, weeklies
and periodicals is continued for an indefinite period of
time, the consumers must henceforth always be able to terminate the
contract with due observance of a notice period of one month
or a maximum of three months in the case of a
regular delivery of less than once a month (Section 6:236 under q
of the DCC). Finally, a new sub-section (s) prohibits the
continuation of the contract in the case of trial subscriptions.
Changes in relation to clauses presumed to be
unreasonably onerous (Section 6:237 of the DCC)
At present, contracts with a duration of more than a year are
presumed to be unreasonably onerous, unless consumers have the
right to early termination of the contract after the lapse of each
contract year (Section 6:237 under k of the DCC). This provision
has now been tightened, as from now on consumers must, after the
lapse of the first contract year, have the possibility to terminate
the contract at all times with due observance of a notice period of
one month.
Section 6:237 under l of the DCC will be amended such that as a
rule, the notice period of termination will be one month (instead
of three months) and, within these boundaries, this notice period
may never be a longer period for consumers than for users of the
general terms and conditions. This is confirmed once again by the
new sub-section (o) which stipulates with respect to contracts that
have not been prolonged, renewed or continued that consumers may
not be bound by a notice period of more than one month. However,
this does not mean that consumers may always terminate the contract
prematurely with a notice period of one month during the first
(contract) year, but only that a notice period for early
termination - if included in the contract - may not be longer than
one month.
Conclusion
As this bill is still pending at this moment, it is not known yet
when it will be adopted by the Senate. Besides, these amendments
will only enter into force one year after their official
publication. This means that businesses still have at least one
year to prepare for the new situation. Because this period may be
tight in view of having to adjust contracting processes, it is wise
to examine the possible impact on the business operations already
now.