Two letters, two purposes
In practice the terms are used interchangeably, but they do not mean the same thing.
A notice of default (ingebrekestelling) is a statutory concept. It is a written reminder in which you give the other party a reasonable period to still perform. If they let that period lapse, they are in default (art. 6:82 BW, Dutch Civil Code).
A demand letter (sommatie) is not a statutory concept. It is a firm letter in which you demand that someone does or pays something, often announcing further steps. A good demand letter is usually also a notice of default.
Why default matters
Only once the other party is in default can you, in many cases, claim damages or terminate the contract. Default is therefore often the key to your next step.
Sometimes a notice of default is not needed and default occurs automatically. For example, if a strict deadline was agreed, or if the other party itself says it will not perform (art. 6:83 BW). If in doubt, send the letter anyway: then you are in a stronger position.
Statutory interest
You may charge statutory interest on a late payment. There are two kinds:
- Statutory interest for consumers and non-commercial transactions (art. 6:119 BW). It runs from the moment the other party is in default.
- Statutory commercial interest between businesses (art. 6:119a BW). It is higher and, in a commercial transaction, runs from the end of the payment term, without you having to send a notice of default first.
The rates are set periodically. For the current rate, check the Dutch government website.
Collection costs and the 14-day letter
If you want to charge extrajudicial collection costs to a consumer, you must first send a reminder with a payment term of fourteen days after receipt. That letter also states which costs the consumer must pay if they do not pay on time (art. 6:96 lid 6 BW). If you skip that letter, you may not charge the costs.
Between businesses that fourteen-day letter is not mandatory. What you may then charge in collection costs depends in part on what you agreed in your contract or terms and conditions. So it pays to arrange that properly.
What goes in the letter?
- Who you are and which invoice or agreement it concerns.
- Exactly what the other party must do or pay, with the amount.
- A concrete and reasonable period, with a date.
- What happens if the period lapses: interest, costs, further steps.
- For a consumer: the fourteen days and the amount of the collection costs.
- A way to prove the letter was received, such as email with a read receipt or registered post.