Terms and Conditions – The Black and Grey List for Non-Consumers 📝

Consumer or Entrepreneur, Everyone Encounters the "Small Print" Daily

Using terms and conditions is common practice and can be encountered when entering into any agreement. However, the use and content of terms and conditions are subject to regulations.

For instance, a clause in the terms and conditions can be voidable if, considering the nature and other contents of the agreement, the manner in which the conditions were established, the mutually apparent interests of the parties, and other circumstances of the case, it is unreasonably onerous for the other party. Relevant circumstances include the parties' status, their social positions, their relationship, and their expertise. If a clause in the terms and conditions is voidable, the user of those terms cannot rely on that clause.

For agreements with a consumer, the law includes a list of provisions that are deemed unreasonably onerous (the 'black list') and a list of provisions that are presumed to be unreasonably onerous (the 'grey list').

While the black and grey lists apply to agreements with consumers, it can also be relevant, even if the other party is not a consumer, to consider whether a clause in the terms and conditions appears on one of these lists when determining if it is unreasonably onerous for that party. When establishing the black and grey lists, the legislator noted that a small legal entity that is materially indistinguishable from a consumer may also invoke the black or grey list. In practice, we refer to this as 'reflex effect.'

Reflex effect is also possible in other cases, for example, if the other party has entered into an agreement in the course of its profession or business, but the agreement does not relate to its core professional or business activities. There can be cases where the other party is not a consumer, but their position closely resembles that of a consumer. In such cases, the fact that the clause appears on the black or grey list can be considered when assessing whether the clause is unreasonably onerous for that party.

This was addressed in a Supreme Court ruling on 8 September 2023. A couple runs a cheese and dairy business, initially as a partnership and later as a private limited company. They entered into an agreement with a party involved in financial advice and mediation. The agreement concerned a subsidy program from the Dutch Ministry of Economic Affairs that promotes innovative investment projects in developing countries. The advisor's terms and conditions included:

“1. Complaints about the work performed must be reported to the user in writing by the client within 8 days of discovery, but no later than 14 days after the completion of the work in question. The notice of default must contain a detailed description of the shortcoming, allowing the user to respond adequately. (…)”

Such a clause is in conflict with the grey and black lists and is presumed unreasonably onerous because it shortens a statutory limitation or expiration period within which a right must be exercised.

The advisor argued that the couple could not invoke the black and/or grey list because they were acting as a legal entity (B.V.). However, the Supreme Court ruled that the clause is unreasonably onerous. In its judgment, the Supreme Court considered the nature of the couple's business (cheese and dairy), their lack of knowledge and experience with the complex financial matters related to the agreement with the advisor, the fact that they had engaged the advisor for this reason, and the fact that the clause appears on the black and/or grey list.

The Court concluded that the couple's position, or at least that of the company, resembles that of a consumer and thus deserves protection. The agreement did not relate to the core activities of the business.

The Supreme Court's ruling demonstrates that the applicability of the black and/or grey list is not only relevant for consumers and/or small entrepreneurs. Reflex effect can indeed be relevant between larger parties.

Read the ruling here.