The Bottom Line
- The burden of proof is on the claimant. In a dispute over payment terms, the party claiming a specific fixed price was agreed upon for contract work bears the legal responsibility of proving it.
- Verbal agreements create significant risk. Relying on oral agreements for major projects is a high-risk strategy. Without written confirmation, proving terms like a fixed price becomes a difficult and costly legal challenge.
- The default is a “reasonable price.” Under Dutch law, if no price is specified in a work contract, the law defaults to a “reasonable price,” which is often interpreted as fair compensation for time and materials.
The Details
This case highlights a classic “he said, she said” scenario in a business-to-business relationship. The dispute involved Indulux B.V., a lighting wholesaler, and its subcontractor, which was hired to install LED lighting on a new Porsche Centrum building. The subcontractor performed the work and invoiced Indulux for over €55,000 based on hours worked and costs incurred (a “time and materials” or “regiebasis” model). Indulux, however, paid only €18,150 (€15,000 plus VAT), insisting that the parties had orally agreed to this fixed amount for the entire job.
The legal question before the District Court of Overijssel was not about the quality of the work, but about the fundamental basis of the payment obligation. The court’s interim judgment focused squarely on the principle of the burden of proof. According to established Dutch case law, the party asserting the existence of a specific agreement—in this instance, Indulux’s claim of a €15,000 fixed fee—is responsible for providing evidence to support that assertion. The subcontractor, by invoicing on an hourly basis, was effectively relying on the legal safety net provided by Article 7:752 of the Dutch Civil Code, which states that a “reasonable price” is due when no price has been explicitly agreed.
While this is not the final verdict, the court’s direction is clear. It has formally ordered Indulux to prove its claim that a fixed price was agreed. If Indulux fails to produce sufficient evidence, such as witness testimony or written correspondence, the court will likely proceed on the basis that no price was set. The focus would then shift to determining a “reasonable price,” potentially validating the subcontractor’s time-and-materials invoices. This ruling is a critical reminder for CEOs and legal counsel: document all key commercial terms, especially pricing, to prevent your company from ending up on the wrong side of the burden of proof.
SOURCE: Rechtbank Overijssel
