THE BOTTOM LINE
- Ambiguous contracts are interpreted against the drafter. A Dutch court has narrowly interpreted an exclusivity clause in a standard service agreement, finding it applied only to a single, specific project, not all future business.
- Clearly define the scope of exclusivity. If your business model relies on securing exclusive rights to a client’s future projects, this must be stated explicitly and unambiguously in your contracts. Relying on broad terms is a significant risk.
- Context matters more than boilerplate text. The court looked at pre-contract discussions to understand the parties’ intent, ultimately deciding that since only one project was discussed initially, the exclusivity was limited to that project.
THE DETAILS
A subsidy consultancy, Subvention B.V., found itself in a legal dispute with its former client, the software developer Sellabees B.V. The parties had signed a service agreement for Subvention to manage applications for R&D tax credits (WBSO). The agreement contained an exclusivity clause. When Sellabees, dissatisfied with the service, engaged a different firm for a new project’s subsidy application, Subvention sued for breach of contract, claiming damages for the lost “success fee”.
The case hinged on the interpretation of the contract’s exclusivity clause. The agreement referred broadly to Subvention managing the client’s “intended innovation projects” (plural). However, the specific restrictive clause stated it was not permitted to submit other applications “for the project” (singular). Subvention argued this granted them exclusivity over all of the client’s subsidy needs, while Sellabees contended it only applied to the specific “PSP” project they were then working on.
Ultimately, the District Court of Overijssel sided with the client, Sellabees. The court applied the well-established “Haviltex” standard, a Dutch legal principle that interprets contracts based on what the parties could reasonably expect from each other. Under this standard, the court found the clause to be ambiguous. As Subvention had drafted the standard agreement, this ambiguity worked against them. Crucially, the court noted that pre-contractual negotiations focused only on one specific project. Subvention failed to prove that a broader, ongoing exclusivity for all potential projects was ever mutually agreed upon. The court also determined that the new application was for a technically distinct project, providing a second basis for dismissing the claim.
SOURCE
Source: Rechtbank Overijssel
