THE BOTTOM LINE
- Clients Can Walk Away: Under Dutch law, clients can terminate service agreements at any time, even if a fixed term or a multi-month package has been agreed upon.
- Full Contract Value Isn’t Guaranteed: If a client terminates early, the service provider is not automatically entitled to the full contract price but rather a reasonable fee for work completed, which may differ from the pro-rata contract rate.
- Informal Cancellation is Valid: A clear message of termination, even through an informal channel like WhatsApp, can be legally effective. This puts the onus on providers to recognize and act on cancellation notices immediately.
THE DETAILS
The case involved Starspace Marketing, a recruitment agency, and a restaurant owner who had contracted their services for a two-month campaign to find a new chef. The parties agreed to a fixed price for the two-month package, payable in advance. However, dissatisfied with the quality of candidates after just a few weeks, the client sent a WhatsApp message stating, “I don’t want to take a second month… As far as I’m concerned, you can take everything offline immediately.” When the client refused to pay for the second, unused month, Starspace initiated legal proceedings to claim the full contract value.
The Amsterdam District Court sided with the client, highlighting a powerful but often overlooked provision in Dutch contract law. The court classified the arrangement as an “overeenkomst van opdracht” (an agreement for services). Article 7:408 of the Dutch Civil Code grants the client the right to terminate such an agreement “at any time.” The court determined that the client’s direct and unambiguous WhatsApp message constituted a valid and immediate termination of the contract. The fact that a two-month term had been agreed upon did not override this fundamental statutory right of the client to cancel the work before its completion.
While the termination was upheld, the agency wasn’t left empty-handed. The court then turned to another provision (Article 7:411 BW) to determine the financial outcome. This article dictates that the service provider is entitled to a “reasonably determined” portion of the fee. Since the original €2,500 per month fee was a discounted package price, the court ruled it was reasonable for the agency to receive its standard, non-discounted single-month rate of €3,000 for the work it had performed. This ruling serves as a crucial reminder for businesses: while clients have an easy exit, service providers may be able to argue for a fee that reflects the true value of the partial work delivered, rather than a simple pro-rata calculation of a discounted package.
SOURCE
Rechtbank Amsterdam
