Conversiebepaling

Conversion provision

A conversion provision is a contractual clause stipulating that an invalid or null and void provision shall automatically be converted into a valid provision that corresponds as closely as possible to the original intention.

In Dutch contract law, a conversion clause prevents an entire agreement or any part of it from being rendered invalid by a void provision. The clause ensures that the invalid text is replaced by a valid alternative that preserves the parties’ intentions to the greatest extent possible.

This clause is relevant because Dutch courts do not always apply conversion of their own motion when a contractual provision is found to be void. An explicit conversion clause affords the parties greater certainty and prevents the agreement from lapsing in whole or in substantial part.

In practice, conversion clauses are primarily included in commercial contracts, general terms and conditions, and employment agreements to safeguard the validity and enforceability of the remaining provisions.

“The conversion provision in Article 12.3 ensured that the void penalty clause was converted into a valid damages provision.”

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