In the Netherlands a contract is concluded by an offer and the acceptance of that offer. Both oral and written contracts are binding, but difficulties may arise in case the existence of an oral agreement is contested. Although you are free to conclude a contract, there are certain rules you have to observe in order to make sure your contract is legally valid. There are three exceptions to the principle of freedom of contract: a contract may not infringe upon (1) the law, (2) public morality or (3) public order. The conclusion of a contract is often preceded by negotiations. During the negotiating process, parties can agree on the meaning of their behavior and statements. They can, for example, include reservations in the contract such as “subject to board approval”. Parties can even determine a break-up fee. A letter of intent or a memorandum of understanding can be considered a binding contract.
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