The Bottom Line
- Context Over Text: A Dutch court has reinforced that the shared understanding and history between parties can override the literal, seemingly clear text of a contract. What you discuss before signing matters just as much as what you sign.
- Costly Assumptions in M&A: A buyer lost out on a €200,000 price reduction because a staffing clause in a Share Purchase Agreement (SPA) was interpreted based on the business’s prior operational level, not the clause’s explicit new requirement for double the capacity.
- Third-Party Clause Risk: Be cautious when inserting contract language provided by an outside party (even a future business partner) into your agreements. Without direct discussion between the signatories, its intended meaning may not hold up in court.
The Details
This case involved the sale of shares in a company linked to a specialist dermatological clinic. The parties, Medicargentum (the buyer) and Boever Beheer (the seller), agreed to a provisional purchase price of €400,000. The final price, however, was subject to a crucial condition: the successful staffing of the clinic post-acquisition. A specific clause stipulated that if the clinic did not have “two doctors/dermatologists working at least six working days per month per doctor/dermatologist” for a set period, the price would be reduced by €200,000. This clause was added late in the negotiations after one of the clinic’s two key dermatologists announced their departure.
The buyer, Medicargentum, argued for a literal interpretation. The text clearly required two dermatologists, each working six days a month—a total of twelve workdays. Since this level was not met, they claimed their €200,000 refund. The seller, Boever Beheer, countered that this was a gross misrepresentation of their agreement. Before the sale, the two dermatologists worked a combined total of about six days per month. The seller argued the clause’s only purpose was to ensure the clinic retained its two-dermatologist certification after the unexpected resignation, thereby maintaining the status quo upon which the original €400,000 price was based, not to double the clinic’s capacity.
The District Court of Noord-Nederland sided with the seller, rejecting the buyer’s claim. The court applied the well-established Dutch legal principle that contract interpretation goes beyond a purely linguistic analysis. It focuses on what the parties could reasonably expect from one another based on all circumstances. The court found it decisive that the €400,000 price had already been agreed upon based on the clinic’s original, lower staffing levels. It was unreasonable to believe the seller would have silently agreed to a last-minute clause that effectively doubled their obligations without any change in price or explicit discussion. The court also noted that the specific text was provided by a third party—the future owner of the clinic—and inserted into the SPA without direct negotiation between the actual buyer and seller. Boever Beheer was therefore entitled to assume the text reflected their shared understanding: to secure the certification by replacing the departing dermatologist, not to fundamentally alter the business model.
Source
Source: Rechtbank Noord-Nederland
