Your spouse is being sued privately: what can you do?

Entrepreneurs are often required to privately warrant for a debt owed by their company. Whether it is a limited liability company or a VOF: a bank or other lender would like to have certainty that its claim will be satisfied. A private guarantee from the director-owner provides that assurance to some extent. This guarantee also gives the entrepreneur an incentive to actually pay the debt (or have it paid) by the company. Otherwise, he then ‘hangs’ in private.

Consent of spouse or registered partner when entering into high-risk agreement

What is often overlooked is that if the business owner is married, then spousal consent is required. Without that consent, such a bond is voidable. This can be convenient for both spouses. If consent is forgotten to be sought, and the agreement is voided, the creditor is missing out.

The legal provision that governs all this and is discussed in this blog applies not only to married couples, but also to registered partners. Furthermore, I will write below mainly about the male variant ‘spouse. I do so because the law does. However, this refers to both ’husband‘ and ’wife‘.

Deposit without spouse's consent

All this is regulated in article 1:88 BW. That article states that one spouse needs the consent of the other for certain legal acts. These are legal acts that potentially endanger the financial position of the family. These may include:

• the agreement by which the spouse personally bail Or vouch for another;
• the agreement whereby the spouse commits himself as joint and several debtor or provides security outside his normal profession or business;
• the contract of purchase or installment or installment plan, again if done outside the ordinary course of business or profession.

If those agreements are entered into without the consent of the spouse or registered partner, the agreement is voidable (article 1:89 BW). Should that happen, the agreement is retroactively invalid (article 3:53 BW). When your spouse subpoenaed is to pay by virtue of the bond, the claim will presumably be dismissed.

Destruction of agreement spouse

Only the spouse who was not a party to the agreement and whose consent was required can set it aside. However, that action to set it aside must be taken promptly after discovery. If it is waited too long, the power to annul may birthday. This occurs three years after the opportunity to destroy arises (article 3:52 paragraph 1 sub d BW).

Destruction, however, can only occur once you are aware of the existence of the agreement for which consent was required. Therefore, the annulment period only begins to run at the time of discovery. Often that is the moment your spouse is sued. Only then did the existence of the claim come to your attention. The Arnhem-Leeuwarden Court of Appeal formulated this as follows in its judgment of November 27, 2012 (ECLI:NL:GHLEE:2012:BY4476):

“Pursuant to article 3:52 paragraph 1 opening words under d of the Dutch Civil Code, the limitation period commences at the moment that the power to invoke this ground for annulment has come ’to the service’ of the person to whom this power belongs. In the present case, this means that the limitation period commenced at the moment that [the defendant's] wife became aware of the guarantee.”

However, it is then important to act quickly: as long as the contract has not been voided, it is legally valid and the other party can Enforce compliance (and thus payment).

Abuse of rights when relying on 1:88 BW

If you knew in advance that a particular agreement required consent and cooperated to ensure that it was not given, then it may be the case that the destruction abuse of right yields. For example, if you knew the agreement would be made and knew your spouse was concealing the fact that they were married. In that case, moreover, there is deception and possibly a wrongful act.

What can you do about agreement that required a spouse's consent?

Therefore, for the contractor's counterparty who needs a spouse's consent, it may be prudent to have their contractor declare that they are not married. Finding out for yourself whether someone is married is not easily possible. However, you can request a copy of the register of marital property, but only if you know the names of both partners and the date of their marriage. In some cases some information can still be obtained from public registers such as the Land Registry, but this is not conclusive. Therefore, you can often do little more than look closely at the ring finger and ask ‘offhand’ if they are married.

Debt collection lawyer for claim under 1:88 BW agreement

The debt collection lawyer of Lexys Lawyers knows how to handle disputes over agreements that required a spouse's consent. We have represented plaintiffs to collect claims against a spouse as well as the debtor himself or herself or his or her spouse. We then bring an action to set aside the agreement. In both cases, the first step we take is the same. We check whether the agreement falls under 1:88 BW, such as a surety, a guarantee, installment purchase, and so on. Then we check whether the partner has destroyed or can still destroy the agreement. Then the further strategy is determined in consultation with you. Whether you are the creditor or the debtor being sued for payment. Take contact on with our specialized debt collection lawyer for defending or filing a claim.