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Issued with a 5000 euro 'fine'?


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I have a dispute with a Dutch business supplier who states I have breached a confidentiality clause in a commercial contract.

 

The penalty for breaching the clause  states he can issue me with a 5000 euro fine.

 

He has issued a summons due to be heard in 3 weeks in Holland which I cannot attend due to travel restrictions etc. I intend to submit a written defence instead.  

 

My question relates to the word 'fine', regardless of whether or not a clause was breached (of course, I will argue there was no breach in any case).

 

However, it is my understanding (at least for the UK) , only the police and courts can issue a fine . Therefore the wording in the contract suggests the clause is unenforceable as a person or business cannot issue fines.  

 

I really need some help in arguing this and would love to hear any ideas how.

Its WAR

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Think you need Dutch legal help with this.  

 

I suspect that you can request the court suspend or cancel the proceedings, as you are not resident in Holland and cannot travel due to Covid-19 restrictions.

 

Did the claimant tell the Dutch court that you are resident in the UK and also confirm to the court that they have followed all required protocols, where the defendant is not resident in Holland ?  I suspect that they may not have followed  correct protocols, as I would have thought the court would have written to you with details of online video attendance at the hearing and other options etc.

 

Not sure just issuing a written defence to the court is the correct way to proceed. 

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If procedure follows like U.K. Law you should be able to submit a statement in absence ...but I would possibly be leaning on the current coved restrictions and why the hearing should be adjourned.

 

Was  the claim issued in Holland and served to you in the U.K.?

 

Andy

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Yes. Issued in Holland and served in the UK. Received the summons early December.  The hearing date says I need to attend or send a representative or submit a written defense. No info about whether the hearing can be online. Trying to get a Dutch solicitor but so far 350 to 500 euros an hour. So I get less than two months to prepare a defense while they have spent two years in preparing their case.

 

The confidentiality clause they are trying to pursue relates to me  telling my customers online that an event needed to be cancelled because the Dutch supplier refused to send the goods for the event. They say, I breached the clause because I had divulged why they were refusing to supply. The reason being they had increased the agreed price of the products and demanded payment in advance, rather than allowing the agreed 30 days after invoice (according to the contract and  the couple years of business previously placed with them) . Therefore they were in breach of contract.

 

The event had to be cancelled a few days before it was due as there was no guarantee the goods for it would arrive, and customers were travelling to the event from across the country, booking trains and hotels. In the end I cancelled the order for the goods and cancelled the event.  My customers were very supportive of my actions and a number of online  comments put the supplier in a bad light, blaming them.

 

Having cancelled the event 3 days before it was due and telling the supplier,  the next day the supplier then said he would send the goods and accept payment in 30 days, but the increase in price  would remain.  I confirmed the event and the order had been  cancelled the night before so it was too late to reinstate it. 

 

They sent the goods anyway,  and they arrived 2 days after the event should have gone ahead.  They didn't expedite delivery either so the goods were never going to reach us before the event. They refused to have the goods back as they were made specifically for the event. So they are suing for payment of the goods 4000 euros, plus 5000 euros fine, plus 1500 euros translation costs, plus legal fees,  I can probably win the argument regarding cancelling the order and thereby return the goods. 

 

In reality I doubt the word 'Fine' will make any difference as far as the confidentiality clause is concerned. It is stated  as Liquidated Damages, which just means it's a guess rather than a calculation of what the damages to their reputation might actually be.

 

The thing is, they say the price increase was not their fault but that of the manufacturer. I mentioned I would mention that on social media to let my customers know, and he said he would back me if I did. It seems he was just as upset as me. that I was cancelling the event and had cancelled the order.  Anyway, I cancelled the event on the events social media page and the supplier has decided to sue rather than back me up. Seems to me, he encouraged me by saying he would back me up if I reported the matter online, but maybe he got some flack from the manufacturer.

 

Its WAR

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OK, I don't think you have much choice but to submit written defence, but you should mention at the beginning the covid-19 issues and being UK based has not allowed adequate opportunity to address the claim being made.

 

 Explain that you had commercial obligations in regard to your own business reputation with your customers, where it was reasonable to explain the supply and cost problems that occurred.  That any commercial confidentiality clause in a contract between yourself and x company could not reasonably prevent you from offering your own customers an explanation. 

 

Also the company that you were dealing with could have issued you with details of the logistical and cost issues they unexpectedly faced to provide to your customers, but this was not offered. ( if this is true )

 

Go through what happened in chronological order first starting with the contract, explain the business and relationship. Then explain the breaches in contract and problems you faced as a consequence. Address each of the points in their claim.  Don't get stuck up on the fine issue. It is an unfair penalty term trying to gag companies they trade with from providing reasonable information to consumers  being supplied product. 

 

 

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