THE BOTTOM LINE
- Informal Agreements are Binding: Be aware that definitive agreements made via email or messaging apps can be enforced by a court. The judge will focus on the clear intent of the parties, not the formality of the communication.
- “Get-Out” Clauses Must Be Explicit: If you want an agreement to be conditional (e.g., subject to financing or no negative financial impact), this must be stated clearly and unambiguously. A court is unlikely to interpret vague negotiation points as formal, deal-breaking conditions.
- A “Clean Break” is Assumed in Business Divorces: When partners agree to separate, courts will likely interpret this as a complete termination of all roles—shareholder, director, and employee—unless a continuing role is explicitly carved out in the agreement.
THE DETAILS
This case involved a dispute between the two 50/50 corporate shareholders of a Dutch healthcare company. When their relationship deteriorated, they began negotiating a “business divorce.” Through a series of emails and WhatsApp messages, they agreed that one partner (the claimant) would take over the other’s (the defendant’s) shares. In return, the defendant’s director would receive her salary for several more months without having to work, and the company would pay for her training course. After the agreement was reached and partially executed, the defendant attempted to back out and resume her management duties.
The defendant argued that no binding contract had been formed. She claimed their agreement was conditional on her suffering “no financial disadvantage,” a condition she argued was triggered by a separate, unrelated financial claim the company made against her. Furthermore, she contended that the agreement only covered the share transfer and the termination of her personal employment, not the separate role her holding company held as a statutory director on the board. Therefore, she argued, her holding company was still entitled to act as a director.
The District Court of Gelderland rejected these arguments in a preliminary ruling. The judge looked past the informal nature of the communications and focused on the clear intention of the parties. Messages stating “our ways could part this summer” demonstrated a clear goal: a complete and total separation. The court found that the “no financial disadvantage” comment was a general negotiation concern, not a formal, legally defined “dissolving condition” that could nullify the entire deal. Crucially, the court ruled that it was illogical to assume the defendant would sell all shares and terminate her employment but intend for her holding company to remain a director. The court enforced the spirit of the “clean break” and issued an injunction, suspending the defendant’s director and shareholder rights pending a final decision.
SOURCE
District Court of Gelderland
