The Great War and Dutch Contract Law

Throughout the Great War, the Kingdom of the Netherlands tried frantically to maintain a position of armed neutrality between the Central Powers and the Entente Forces. Although it more or less succeeded in doing so, the war did leave distinct marks on Dutch society and economy. These marks caused both sudden and more gradual legal change. Overall, the impact of the Great War on Dutch law and regulation was enduring and lasting, even though this was not always appreciated at the time.

I recently published an article on the influence of the Great War on these sudden and more gradual changes of Dutch private law (“The Great War and Dutch Contract law – Resistance, Responsiveness and Neutrality” (2014) 2(2) Comparative Legal History 303–324). This blog entry briefly summarizes some of findings.

Sudden changes and gradual shifts

Never since the introduction of the Dutch Civil Code in 1838 had the Netherlands been exposed to such a disruptive international conflict as the Great War. Therefore, the war presented the first systemic test of Civil Code doctrines such as impossibility and force majeure. As far as these doctrines are concerned, some have argued that the Great War was no different from other, less disruptive economic events. However, on closer inspection one may find that the application of private law doctrines under war conditions seemed to reflect the Dutch neutrality doctrine. The courts strictly construed and enforced contracts, mostly rejected defences involving ‘impossibility’ and vis maior, and often held that contracting parties had knowingly assumed the risks associated with contracting during a war. Moreover, the Great War marked the end of nineteenth-century laissez-faire notions in regulatory policies, which in turn caused a gradual shift in balance between public law and freedom of contract. In hindsight, the War can also be regarded as the turning point in Dutch doctrinal thinking on the respective roles of and the relationship between force majeure, unforeseen circumstances and good faith. Another way of looking at judicial application of contract law during the Great War is to consider this as an extension of the Dutch neutrality doctrine. Both viewpoints are explored in  “The Great War and Dutch Contract law – Resistance, Responsiveness and Neutrality“.

The article discusses the impact of the war on Dutch society and economy and it then goes on to explain the peculiar role that its private law system played in keeping Dutch international trade afloat. The discussion serves to sketch the background against which we should understand the development in Dutch case law and academic legal debate of the key contract law doctrines of impossibility and force majeure. Then, the article turns to the influence of the Great War on the gradual development of the good faith principle and a proper doctrine of unforeseen circumstances in Dutch law. In the concluding section, Dutch contract law is considered in terms of its contribution to the wider Dutch neutrality doctrine during the Great War.

Hard on all parties, irrespective of nationality

The Great War was the first intensive test of the contract law framework of the 1838 Civil Code. This test showed that the conceptual structure of impossibility and vis maior was flawed: the judicial application of these concepts brought to light the fact that impossibility is not identical to vis maior, nor is it a necessary condition for vis maior. Thus, the courts felt compelled to bend these two statutory concepts to evaluate subjective impossibility as a potential excuse for non-performance. The war conditions also showed that the courts were extremely unwilling to let debtors off the hook easily, that the vis maior defence was more often rejected than sustained, and that the Dutch Supreme Court long resisted attempts to jeopardise the ‘neutrality of private law’. In this sense, the Dutch courts were predictable and firm enforcers of promises. Interestingly enough, they were also trying, or so it appears, to emulate the Dutch neutrality doctrine through their contract law decisions. Dutch courts were hard on all sellers, debtors and whoever defaulted on promises, irrespective of nationality.

Influence on courts through legal scholarship?

In terms of the marks left by the Great War on Dutch legal scholarship, two influential post-war monographs stand out. Wery’s 1919 book on vis maior benefited from pre-war work by others but it also offered an outline for the future development of ‘imputable and non-imputable non-performance’ as an alternative model for dealing with vis maior. As such, it signified a move away from the malleable concept of ‘impossibility’ towards a more transparent approach of assigning responsibility. The 1923 monograph by Levenbach on the disruption of the contractual synallagma fuelled the debate on unforeseen circumstances as a separate doctrine of contract law. Although the Supreme Court was late in acknowledging good faith as the engine for the introduction of such an innovation in contract law, it was clear after the Great War that several lower courts and academics were convinced that this was indeed the right path. It was not until well after the Second World War that the Supreme Court proved them right.

References

See also:

  • J.W. Oosterhuis, Unexpected Circumstances Arising from World War I and its Aftermath: ‘Open’ Versus ‘Closed’ Legal Systems, Erasmus Law Review, Vol. 7, No. 2, 2014. Available at SSRN: http://ssrn.com/abstract=2520398
  • C. Jansen, De Impact van de Eerste Wereldoorlog op het Nederlandse
    privaatrecht, Nederlands Juristenblad 2014, p. 1491 e.v.

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