In an acquisition, you rely on information from the seller and your own research. In practice, you see that contracts exclude recourse to rescission or annulment and that the value of the deal stands or falls with due diligence and well-formulated warranties. A recent ruling of 2 July 2025, ECLI:NL:RBDHA:2025:11815 by the District Court of The Hague underlines that your company bears the risk if clear signs of imperfections already emerge during the transaction process and you go ahead anyway. This is relevant for contract law, avoiding litigation and liability proceedings.
Core topic
The crux of the judgment is that in an asset liability transaction, the buyer could not rely on annulment and dissolution. During the process, several indications were visible that the company was not in order in parts. The seller had shared information via a data room and the buyer had had a technical analysis done that identified substantial licensing issues. The buyer chose mainly to reduce the purchase price and go ahead with the deal. The court ruled that the exclusion clause in the agreement stood and that the warranties had not been breached. This lacked a ground for non-conformity, breach of contract or tort. This shows how the allocation of risks in contract law in acquisitions in the Netherlands plays out in liability and damages proceedings.
Explanation and practical example
Relevantly, the seller gave access to 199 documents in a virtual data room and the buyer explicitly asked research questions, including about licences and set-up of the ICT environment. The technical analysis revealed a serious compliance issue with licences and further investigation was advised. The buyer did not do this and only negotiated a lower price. In that context, a rescission and annulment exclusion works, especially if the contract also states that the buyer cannot claim warranties for facts that were already known based on the data room information.
The case also shows that the assessment of turnover and customer base listens closely. Much of the turnover turned out to be due to a one-off supply of refurbished hardware to the largest customer. The court found that the buyer was aware of this and that this was not regular, recurring turnover. When arguing that customers would not be real customers of the seller, because self-employed people worked for these customers, the court does not follow the seller. The contracts and invoicing were through the company and the departure of customers was partly attributed to the post-acquisition services offered.
In addition, claims for penalties for breach of confidentiality obligations stranded because there was no evidence that confidential information had been shared or acquisitions made. A claim for an asset conservation declaration failed because that obligation related to the holding company and not the acquired entity. In counterclaim, the court rejected unpaid invoices because hours had not been accounted for as agreed.
Roadmap and solutions
For your company, this means that due diligence is not just a formality, but a core tool to manage contractual risk. When your team gets signals of compliance or licensing issues, you continue the investigation and record findings and inferences. This helps to negotiate specific warranties, indemnities and carve outs that cover those very risks. If the agreement contains an exclusion of dissolution and annulment, make sure you have a robust alternative in the form of precisely worded warranties, a clear knowledge qualification and an effective liability mechanism, for instance via escrow or an earn-out that depends on recurring revenue. Also pay attention to turnover quality. A one-off delivery is no basis for valuing regular turnover. Lay down in contract law how you look at normal and sustainable turnover and what figures the seller guarantees.
Furthermore, work carefully with confidentiality and information agreements in the transition. If you still use the seller on the basis of a contract for services, guarantee reporting obligations and timesheets. This will prevent discussion in a dispute and strengthen your position in proceedings. These lessons apply to domestic deals and are at least as relevant in international trade, where differences in licensing policy, compliance and contract practice require extra attention.
More information.
TK can help you set up an effective due diligence process, structure the transaction and tailor warranties and liabilities, including knowledge qualifications and indemnities. Our team will guide you in the assessment of ICT environments, licence compliance and revenue quality, and act in dispute resolution and litigation when litigation does occur.
Do you want to tighten up your acquisition contracts or have a dispute about warranties or non-compliance? Then contact the Corporate & Commercial Litigation team.
