Matiging

Mitigation means that the court may, at the request of the debtor, reduce an agreed penalty where it is disproportionate to the damage suffered or the gravity of the breach. This power is set out in Article 6:94 of the Dutch Civil Code and constitutes a corrective to the principle of freedom of contract.

The provision is relevant in that it prevents a party from being disproportionately prejudiced by an excessive penalty, while preserving the incentive to perform contractual obligations. In assessing a request, the court takes into account all circumstances of the case, including the nature of the contract and the respective positions of the parties.

In practice, mitigation is frequently sought in proceedings concerning non-performance or the termination of long-term contracts in which substantial penalties have been stipulated.