Hans has much satisfaction in his work. "The fresh produce industry always appealed to me. These people are hard workers with a down-to-earth kind of mentality. And then there’s the dynamics of international trade. You're dealing with people from all over the world, all of whom have their own culture, but who share a common passion for the product."
“Nothing is written down”
Also, from a legal standpoint the sector is an interesting one, says Hans. "You have on-going cross-border commerce, with all its complications and legal issues. Many of these are difficult to resolve, because in the fruit and vegetable sector there exist few written agreements. People tend to trust each other, so nothing is written down. People don’t think it’s necessary to lay down arrangements in a contract.”
Written agreements and general conditions
Hans, however, always advises clients to put everything down on paper. "A verbal agreement is certainly just as binding as a written one, but often difficult to prove. I always suggest people put their things in writing. For one thing, you can control which judge or arbitrator should rule on any dispute. Recently a Dutch importer requested me to start proceedings against an exporter from Ethiopia. It turned out the dispute had to be settled in accordance with Ethiopian arbitration in Addis Ababa, causing the importer to abandon the procedure.” Hans points out that it is not sufficient to have general conditions. "You must determine what these conditions pertain, and what they mean to someone on the other side of the globe, someone possibly harbouring a different set of morals. You must evaluate the appropriateness of any condition, not rely on its general nature. Then you have to make sure the other party has read and approved the conditions, otherwise he might loophole his way out." In many proceedings, it’s not just about whether general conditions are applicable, but also on whether a party may reasonably rely on a general condition. "It depends on all the circumstances of the case. One of those conditions is the capacity of the other party. If you are doing business with consumers, you have very little contractual manoeuvrability. That license is much broader if you’re dealing with international trading companies."
You snooze, you lose
Traditionally, most of the fruit and vegetable trade relies on commission sales. "In recent years, however, you see a perceptible shift to fixed sales,” says Hans. “More and more exporters prefer the security of a fixed price over the uncertainty of after-sale proceeds and the deduction of commission and expenses. Not that this security is absolute. If the quality of the goods is wanting, a buyer won’t be willing to pay the full amount. In order not to lose his rights, the buyer has to meet inspection and complaint obligations: he must check perishable goods within a brief period of time, notifying the seller immediately about the nature of any defects. Hence the phrase: you snooze, you lose." The urgent advice from Hans to all traders is therefore to react quickly and adequately in case of quality problems. "When you neglect your obligations, you basically forfeit your rights."
Advising, litigation and preventing legal procedures
The seasoned counsellor stresses that his efforts have always been directed towards preventing legal proceedings. "I am very well aware that fruit and vegetable companies want to focus on their business and not waste their time in a courtroom. If a conflict occurs, it is therefore preferable – at an early stage – to examine the possibilities of a settlement. For this you need two parties, but my experience is that fruit and vegetable companies tend to work things out, so as to continue doing business. Sometimes a settlement entails a form of compensation in the following season, so procedures aren’t delayed or stalled indefinitely. It’s also amazing to see how many industry people remain close friends, in spite of intervening legal disagreements.”
Abroad
Hans also represents Dutch produce companies in foreign proceedings. "I always do this in cooperation with a local lawyer. Each country has its own legal system and I always employ local knowledge and experience. Even in Belgium, I will still enlist the help of local specialists. I have been living there for twenty years, but the Belgian legal system is vastly different than the Dutch one, forcing me to delegate."
Industry knowledge
At Borsboom & Hamm, Hans and his brother Jos focus specifically on the fruit and vegetable sector. Where Hans focuses on (international) contract law and procedural law, his brother engages primarily in corporate law. "All lawyers at our firm are specialized in one or more jurisdictions," says Hans. "To effectively advise our clients, specific industry knowledge is of great importance. If you have been around in the fruit and vegetable sector, you know how things work. And communication with AGF entrepreneurs goes a lot smoother if you understand and speak their language."
Contact:
hans.borsboom@borsboomhamm.nl