THE BOTTOM LINE
- A buyer cannot unilaterally cancel an asset purchase agreement based on post-signing “red flags” if the contract already contains a specific mechanism, such as a price adjustment clause, to address those very risks.
- Courts may prevent a party from relying on a contract condition (e.g., successful integration of assets) if that party’s own inaction caused the condition not to be met. You cannot create the problem and then use it to void the deal.
- This ruling underscores the importance of clear, specific contractual remedies. The seller was saved by a clause that anticipated customer churn and provided for a price adjustment rather than allowing for termination.
THE DETAILS
In a dispute over the acquisition of a telecom customer portfolio, the Amsterdam District Court has ruled that the buyer, WeBellen B.V., could not unwind the deal despite discovering disappointing customer numbers immediately after signing. WeBellen had agreed to purchase the customer base of a sole proprietor for €88,000, paying 75% upfront. The day after signing, WeBellen received information from a provider suggesting significantly fewer active customers than expected and promptly sought to terminate the agreement by invoking suspensive conditions, demanding its €66,000 down payment back. The seller disputed the termination and countersued for the remaining purchase price.
The court sided firmly with the seller, rejecting all of the buyer’s claims. Central to the decision was the court’s interpretation of the purchase agreement. WeBellen argued that a suspensive condition—the “successful and proper use” of the seller’s dealer codes—had not been met. However, the court found that WeBellen itself had prevented this by choosing not to integrate or use the codes after its discovery. Citing principles of reasonableness and fairness, the court ruled that a party cannot engineer the failure of a condition and then use that failure to escape its obligations.
Furthermore, the court highlighted that the contract itself contained the appropriate remedy for the buyer’s concerns. The agreement included a price adjustment clause (Article 5.3) specifically designed to handle situations where customers were no longer generating revenue by the effective transfer date. The court noted that WeBellen was aware of the volatile nature of the customer base. Instead of trying to cancel the entire deal, the buyer’s correct contractual path was to use this clause to recalculate the final price. Because the contract provided this specific tool for managing customer churn, there were no grounds for termination, breach of warranty, or a claim of non-conformity. The court has issued an interim judgment, ordering the buyer to provide the financial data needed to calculate the price adjustment for one verifiably lost customer before a final decision on the remaining payment is made.
SOURCE
Source: Rechtbank Amsterdam
