2 important legal documents for freelancing in the Netherlands
Oct 16, 2023
Working in the Netherlands as a freelancer, you will need some legal documentation in place in accordance with Dutch law. The most widespread used are the Terms and Conditions and the Freelance Contract, both of which can come with varying names. NB: Dutch contracts and legal language may use English wording for the benefit of non-Dutch speakers, but Anglo-Saxon law is very different from Dutch law. In this article we explain what you should know.
So you have decided to start as a freelancer in the Netherlands. Sooner or later you need to agree on the exact terms of the assignment with your client. For example: the fee you agreed on, the period you will be working for and the rules for termination of the agreement. These are normally agreed upon in a freelance contract. This contract can go by a multitude of other names, such as service contract or consultancy contract. Under Dutch law they would all be considered “assignment contracts” as described in article 7:400 of the Dutch Civil Code. Laying down the rules of engagement in this way is not only sensible from a business point of view, you are also required to have a correct agreement in your administration to justify the freelance payments you are receiving.
The most important issue with Dutch freelance contracts is the question of false self employment. This may be the case when a freelancer is working for one main client, and in accordance with a freelance contract that contains clauses that are normally reserved for employment contracts. Examples include: giving directions to other co-workers, paid holiday leave or exclusivity of labour clauses. In these cases, the Dutch Tax Authorities may take the position that there is no freelance relationship, but a normal labour relationship over which regular employment taxes are owed. This is especially poignant for freelancers working in a ZZP/eenmanszaak legal form, which has certain tax benefits. These benefits can be taken away by the Tax Authorities if the freelance relationship is considered to be in fact false employment. This article explains the difference between BV and ZZP/eenmanszaak as a freelancer
The Dutch law prescribing these requirements is the so-called “DBA Act”. If you are working in the Netherlands for any client from anywhere in the world, your freelance contract must still meet the requirements from the Dutch DBA act in order to prevent false employment from being established. Lastly, bear in mind that having a correct agreement in place also means you have to live up to it in practice. If you have a correct agreement in place, but in fact are behaving like a “regular employee”, the Tax Authorities may still take position against you.
Terms and Conditions
Next to your Freelance Agreement, it is always a smart idea to have a set of general rules governing your contract. Take for example the liability for your work, rules for Force Majeure and warranties. This document is not compulsory but comes highly recommended. If you’re working in a B2B relationship, you have a certain amount of freedom to contract however you like. But if you’re dealing with consumers, however, you need to be very careful. Under Dutch law there are categories of clauses in your Terms and Conditions that are put on the so-called grey list (which makes them questionable before a judge) and black list (which makes them outright unacceptable). The grey list includes : contract terms of more than one year, notice periods of more than one month, penalties on ending the agreement. The black list includes : automatic extensions of contract, exclusion of liability, one-sided price increases. And for good reason. As a consumer you don’t want to find yourself trapped here either.
If you are working in a B2B relationship, the most important clause of your Terms and Conditions is the limitation of your liability. The catch here is: you may limit your liability but not ALL the way. If you limit all your liability for your performance under the contract, you will end up limiting none at all. A judge will simply throw the whole clause out the window. So here’s what you need to do:
(a) exclude full liability for indirect damages;
(b) cap your maximum liability for damages to the amount your insurance company will pay out to you;
(c) if your insurance company does not pay out to you, you limit your liability to the amount of the fees paid by your customer for the services or products purchased. If you run a subscription model, it’s customary to cap at one year’s amount of fees.
Also bear in mind that just having Terms and Conditions and applying them to your services, is not enough. Your customers must have had a chance to actually read them, too. Under Dutch law, they must have been physically offered to the customer. In reality this means, it must have been added as an attachment to an email to your client. If you have generic questions about freelancing in the Netherlands, visit our FAQ page about freelancing in the Netherlands.
Cardon & Company is well placed to draft your Freelance Contract or General Terms and Conditions for you, or review existing versions. If you have a question about this, please don’t hesitate to reach out.
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