FRANCHISE AGREEMENTS AND SANCTIONS UNDER THE LAWS OF THE DUTCH CARIBBEAN
A general authority to impose fines could be unenforceable
A franchise agreement normally contains certain sanctions in case one of the parties is not or only partially performing its obligations, e.g. the imposition of fines.
In accordance with Netherlands Antilles law, the standards of reasonableness and fairness and all specific circumstances of the case must be taken into account when applying such sanctions. In practice, this means that these sanctions may not always be enforceable.
The imposition of fines is a severe sanction, especially if the non-compliance is irreversible and cannot be remedied. In case of a general authority to impose fines, it is arguable whether it is possible to allocate such a general authority without a predetermined description of which specific fines may be imposed on which specific (failure to comply with the) provisions.
Karel Frielink
Curacao-based Attorney (lawyer) / Partner
