Café Hesp and Grolsch squabble over contract takeover, this is what judge found

Café Hesp and Grolsch stechelen over contract takeover, this is what judge found

The owners of the 135-year-old Amsterdam café Hesp have sued beer brewer Grolsch. The dispute concerned a bonus of more than €40,000. Hesp, recently taken over by the owners of the also Amsterdam café De Ysbreker, felt they were entitled to that bonus. After all, they had taken over the contract between the old owners and Grolsch, they thought. Grolsch disagreed and put up a defense: there was no question of taking over the contract. The contract would not have been automatically transferred to the new owners when they took over the pub. Moreover, Hesp stopped selling Grolsch. The Overijssel court therefore vindicated the brewer. Contract law lawyer Robert van Ewijk explains what was going on between Hesp and Grolsch.

Bonus contract between Grolsch and Hesp taken over?

Café Hesp has had several agreements with Grolsch since 2014. These include the supply of beer. Under that agreement, Hesp was obliged to purchase beer exclusively from Grolsch for the duration of 5 years. In exchange, Hesp received an annual bonus payment on the hectoliters of beer purchased. After De Ysbreker took over the pub in 2018, it claimed that there would be contract takeover. Therefore, Hesp's new owners would be entitled to the bonus payment for the year 2019. After that year, Hesp stopped selling Grolsch beers. Instead, it started serving the Amstel and Heineken ranges.

To take over a contract or not?

The law (art. 6:159 BW) states that a contract between two parties can be taken over by another party. However, this requires the consent of the other party. In addition, the law requires that the contract takeover must be recorded in a deed: it must therefore be in writing. In this example, although Hesp could transfer the agreement with Grolsch to (owners of) De Ysbreker, it could only do so if Grolsch subsequently agreed to it and if it was put in writing. And that, according to Grolsch, had not happened.

Contract acquisition must be in writing

Hesp pointed out that an email from Grolsch dated Nov. 2, 2018 stated:

“To be eligible for, and in sign of agreement to, the above bonus agreements, you must sign this letter of agreement.”

Therefore, Grolsch would have tacitly agreed to the contract takeover. However, the judge did not go along with this. The letter was not signed by Hesp. So there is no written consent from Hesp either. And even if Grolsch would have tacitly consented, which the judge did not assume, the written requirement that the law imposes on contract assumption.

Lawyer contract law in contract acquisition

There is a lot involved in the acquisition of a business. Depending on how exactly the takeover takes place, contracts are not automatically transferred to the new owner. This was also the experience of the new owners of Hesp, when they found out that tacit contract transfer is out of the question. That ‘joke’ cost them more than € 40.000,- in lost bonus and, they had to pay the legal costs of Grolsch reimbursed. In this case, that also added up to over €5,000. Therefore, avoid surprises later and consult a lawyer contract law. Who can ensure that all formalities of a contract takeover are fulfilled. In this case, that was too late and the pub owners, as Quote that aptly noted a ‘hangover’ after losing the case against Grolsch.