AGENCY AND DISTRIBUTION AGREEMENTS IN THE NETHERLANDS CARIBBEAN (II)
Distribution agreement
So-called agency agreements frequently bear resemblance in actual practice, to (certain aspects of) distribution agreements. Hence, so-called ‘agency agreements’ are in actual fact not infrequently mixed type agreements, consisting of an agent and a distribution element.
In general, a distributor buys goods from a principal in his own name and for his own account and resells these goods to third parties in his own name and for his own account.
Distribution agreements are not defined in any Netherlands Antilles statute and are not subject to any specific Netherlands Antilles legislation. The distribution agreement is an agreement sui generis, …
Read the rest »
AGENCY AND DISTRIBUTION AGREEMENTS IN THE NETHERLANDS CARIBBEAN (I)
Commercial Agency Agreement
According to Section 7:428, Paragraph 1, of the Netherlands Antilles Civil Code, a commercial agency contract (agentuurovereenkomst) is a contract for services whereby one party, the principal, instructs the other party, the commercial agent, and whereby the latter binds himself, for a fixed or indeterminate term and for remuneration, to act as an intermediary in the conclusion of contracts, and, as the case may be, to enter into such contracts in the name and for the account of the principal, without being his subordinate.
No procedural requirements apply for entering into an agency agreement, and it may …
Read the rest »
UNLAWFUL ACTS UNDER ARUBAN LAW
Several requirements apply
Article 6:162 section 1 of the Aruba Civil Code (Aruba CC) stipulates four conditions for someone’s obligation to compensate damage based on an unlawful act (tort):
Article 6:163 Aruba CC provides for an exception to the general rule of article 6:162 Aruba CC: “There is no obligation to repair damage when the violated norm does not have …
Read the rest »
THE ANNUAL ACCOUNTS OF LARGE DUTCH CARIBBEAN COMPANIES
Stricter rules for large companies
Under Netherlands Antilles law the annual accounts of limited liability companies which do not qualify as so called large companies, need to be prepared in accordance with generally accepted standards and shall provide sufficient insight as to enable a sound judgment to be formed regarding the assets and the results and, to the extent the nature of the annual accounts so permit, regarding the solvency and liquidity of the company (article 2:116 (4) Netherlands Antilles Civil Code). This is comparable to the principles of good business practice (goed koopmansgebruik).
For large companies the legislator chose …
Read the rest »
CONVERSION OF A DUTCH CARIBBEAN LIMITED LIABILITY COMPANY
An NV may be converted into a BV and vice versa
The Netherlands Antilles Civil Code provides for an NV to be converted into a BV and vice versa. Conversion does not terminate the existence of the legal entity.
Conversion requires a resolution. A resolution to convert and to amend the articles has to be adopted, if only to satisfy similar requirements as for a resolution to amend the articles. The conversion shall become effective by execution of a notarial deed of conversion, and said deed must contain the new articles of association.
A conversion balance sheet must be attached to …
Read the rest »
TRANSACTIONAL POWER OF THE MANAGING BOARD OF A DUTCH CARIBBEAN CORPORATION (II)
Only corporations may plead absence of representative authority
Under the Netherlands Antilles Corporate Code, i.e. Book 2 of the Civil Code, transactions with third parties that violate either the law or any limitations on the transactional powers of the board of directors of a corporation, are not enforceable against the corporation if the limitations are properly disclosed at the trade register. According to Article 2:10(3) Netherlands Antilles Civil Code only corporations may plead the absence of representative authority.
A counterparty wishing to withdraw from a legal act on that ground, may only rely on the fourth paragraph of Article 2:10 …
Read the rest »
WHAT DAMAGES ARE RECOVERABLE UNDER ARUBAN LAW? (II)
Case law
The Supreme Court in its case law has held that relatives of a deceased person are only entitled to sue for damages against the person liable for his or her death, if and to the extent that their death has left them in need. The extent of need is measured by the standard of living of the surviving relatives during the life of the deceased. See, for example, Supreme Court dated December 13, 1985 and Supreme Court dated February 28, 1986. This rule may be considered one of the fundamental principles and values of the Aruban legal system, …
Read the rest »
WHAT DAMAGES ARE RECOVERABLE UNDER ARUBAN LAW? (I)
Nature and extent determined by the Civil Code
When considering the nature and extent of damages that are recoverable under Aruban law, the point of departure is Book 6, Title 1 (Obligations in General), Section 10 (Legal Obligations to Make Reparation of Damage), Article 95 of the Aruban Civil Code which states: ‘the damage which must be repaired pursuant to a legal obligation to make reparation consists of material damage and other harm (i.e., immaterial damage), the latter to the extent that the law grants a right to reparation thereof’.
Pursuant to Article 96, Paragraph 1, material damage comprises both …
Read the rest »
RIGHT OF SET-OFF UNDER DUTCH CARIBBEAN LAW
One of the most modern regimes in the world
The legal concept of set-off may be defined as setting cross-claims off against each other to produce a single balance. For instance, if A were to have a claim against B for a sum of money, and B would have a cross-claim against A for a sum of money, then B is entitled to be absolved from payment of A’s claim to the extent of his cross-claim and is also entitled to use his cross-claim in pleadings as a defense in an action by A to enforce his claim.
Set-off functions …
Read the rest »
GENERAL CONDITIONS UNDER THE LAWS OF THE DUTCH CARIBBEAN
General conditions may be nullified
Since 1 January 2001 the Civil Code (CC) of Aruba and the Netherlands Antilles contains a section on general terms and conditions. By including this section in the CC the legislator tried to strengthen judicial supervision of the terms of general conditions in order to protect contracting parties against the use of general conditions, since they, generally, have no knowledge of, or influence on, the contents of these conditions.
The CC gives a broad definition of general conditions. When a certain clause or condition is used in a number of contracts then the clause or …
Read the rest »
THE LAWS OF TORT IN THE DUTCH CARIBBEAN
Unlawful acts and damage
Section 6:162 paragraph 1 Netherlands Antilles Civil Code (NACC) stipulates four conditions for someone’s obligation to compensate damage based on an unlawful act (tort):
Section 6:163 NACC provides for an exception to the general rule of Section 6:162 NACC: “There is no obligation to repair damage when the violated norm does not have as its …
Read the rest »
THE MANAGEMENT BOARD OF A DUTCH CARIBBEAN CORPORATION
The concept of corporate officers is unknown
The management board has the function of managing the corporation, i.e., making policy and conducting the day-to-day management of the corporation. The management board is responsible for the management of the BV and is authorized to represent it, except where restricted by the articles of incorporation.
The management board is the corporation’s centre of gravity. The management board of a Netherlands Antilles corporation combines the functions of executive directors and senior officers in a U.S. corporation, unless the articles provide for a single-tier board. There is no position equivalent to that of chief …
Read the rest »