Exit payment terms of more than 60 days
On 1 July 2017 the Dutch act dealing with payment terms of maximum sixty days for large companies (Wet uiterste betaaltermijnen van zestig dagen voor grote ondernemingen) has entered into force.
Before the new act entered into force, it was allowed to agree upon a payment term of maximum 60 days (irrespective of the type and size of the parties). Even longer payment terms were permitted if this was not 'apparently unreasonable' towards the creditor.
It is now prohibited for large companies (as debtor) to agree upon payment terms of more than 60 days when entering into commercial contracts with small to medium sized enterprises or independent entrepreneurs (as creditor). Agreeing upon a longer payment term leads to the conversion thereof into a payment term of 30 days, by operation of law. The large company must then pay the applicable statutory interest in respect of the term that exceeds the payment term of 30 days. A notice of default is not required.
For the application of this act, a company qualifies as a large company if it has met (during 2 consecutive financial years) 2 out of the 3 criteria mentioned below:
Asset valua on the balance sheet > 20 million
Net turnover during a financial year > 40 million
Average amount of employees in a financial year > 250
All other enterprises are considered medium sized or small.
The new act shall apply as of 1 July 2017 for all new agreements. For existing agreements the new act shall apply as of 1 July 2018. Ad agencies and advertisers are well advised to review their client / agency agreements for compliance with the new rules.
Daniël Haije