Breach of duty of care by contractor

Under certain circumstances, there may be a breach of the duty of care which a good contractor should observe. The District Court of Gelderland recently had to deal with an issue concerning an agreement for the collection and processing of waste, in which the contractor continued to send invoices to the principal without providing any service in return.

The facts

The parties, Ter Horst Milieu and Silverstar (a restaurant), had concluded an agreement with a term of 84 months for a (business) waste container with weekly emptying for an amount of € 65.00 per month. In practice this agreement meant that Ter Horst Milieu first placed a container, that the customer (Silverstar) could put waste in it which was then processed by Ter Horst Milieu who drives by weekly with a rubbish truck.

The contract was not terminable prematurely and the general conditions included the following:

In the event that the Customer has concluded a contract with Ter Horst on a subscription basis whereby a periodic emptying has been agreed and Ter Horst cannot empty the waste on the usual emptying day due to circumstances attributable to the Customer, the Customer cannot claim any form of refund or setoff. (...)

And

If the Customer ceases the operation of his business, other than as a result of bankruptcy, the Customer shall remain obliged to fulfil the contractual obligations, unless otherwise agreed in writing. Termination of business cannot be considered as an unforeseen circumstance as meant in article 6:258 of the Dutch Civil Code.

Before the commencement date, Silverstar asked ter Horst Milieu via WhatsApp to wait with the commencement of the contract, upon which ter Horst Milieu informed the company that this was no longer possible. The container was delivered to the restaurant and a few months later, in March 2020, Silverstar texted Ter Horst Milieu that the container had to be removed because the restaurant had been closed since January 2020 and other people were throwing waste into it.

Ter Horst Milieu continued to send monthly invoices to Silverstar from January 2020 through April 2021 and until July 2020, Ter Horst Milieu's rubbish truck continued to drive by Silverstar's restaurant weekly. In April 2021, Ter Horst Milieu finally suspended the agreement and stopped sending invoices.

Because Silverstar did not pay the invoices of Ter Horst Milieu, Ter Horst Milieu instituted proceedings and claimed payment of the invoices over the period January 2020 up to and including April 2021.

In the proceedings, Silverstar took the position that it was no longer bound by the agreement because it had cancelled it immediately after it had been concluded.

Judgment of the court

The subdistrict court ruled that Silverstar's defence did not hold because the request to terminate the contract had not been confirmed by Ter Horst Milieu, so that Silverstar could not rely on this. Silverstar also argued that it would be unjust and unfair that it would have to pay all those invoices, while it had indicated from the start that it wanted to terminate the agreement and had never made use of the service of Ter Horst Milieu. The restaurant has not been open because Silverstar did not have a licence, then because of water leakage and later because of corona. Silverstar tried several times to communicate with Ter Horst Milieu about this.

The judge ruled as follows:

The subdistrict court interprets this defence as an appeal by Silverstar to reasonableness and fairness. Silverstar fills in this defence by pointing out that Ter Horst Milieu has breached its duty of care to act as a good contractor. Whether this defence is successful will be assessed below.

Firstly, it is important that the agreement cannot be terminated prematurely and has been entered into for a period of seven years. It also follows from the agreement that the monthly invoices must be paid, even if no waste is actually processed. This means that Silverstar is in principle bound by the agreement and must pay the invoices.

However, reasonableness and fairness (and the duty of care) mean that under certain circumstances it may go too far to continue charging for service when that service is not being provided. This is what happened in this case. In July 2020 Ter Horst Milieu stopped visiting Silverstar for waste processing. At that moment Silverstar had not paid the invoices for months and Ter Horst Milieu knew that Silverstar wanted to end the agreement already in December 2019 and in March 2020. Ter Horst Milieu should have contacted Silverstar at that time. Without consulting with Silverstar, Ter Horst Milieu made the choice not to drive by from August 2020 onwards. It did continue to send monthly invoices until April 2021. Eventually Ter Horst Milieu chose to suspend the agreement in April 2021.

Because of these specific circumstances the Subdistrict Court held that Ter Horst Milieu did not act as a good contractor by continuing to send invoices in that period - from August 2020 until April 2021 - without providing service in return. For this reason it is unacceptable according to standards of reasonableness and fairness that Silverstar should have to pay these invoices."

Conclusion

The claim of Ter Horst Milieu was only awarded by the court with respect to the invoices up to and including July 2020. Silverstar did not have to pay the invoices for August 2020 up to and including April 2021. However, the claimed contractual interest as provided for in the general terms and conditions was awarded, as well as the extrajudicial collection costs related to the principal sum to be awarded. Silverstar also had to bear the costs of the proceedings.

Do you have any questions or need advice on contractual obligations? Please feel free to contact one of our lawyers. We will be happy to assist you.

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