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Unclear TESLA contract. Managing director dodges personal liability

Recently, the Dutch Supreme Court held that the Court of Appeal was correct in assessing that (notwithstanding the personal name and signature on the standard TESLA loancontract – in Dutch: “bruikleen-overeenkomst” -) a TESLA was delivered on loan to a private company (B.V.) and not the managing director of that company. The Supreme Court followed the advice of the Attorney General in this matter (which advice provides more insight on the background of this matter).

An interesting case. What happened was that a company car was defect (which is rare for a TESLA, as far as I know) and during the repair another TESLA was handed on loan to the managing director of the company. Unfortunately, the latter TESLA crashed into a tree – while driven by an acquaintance of the managing director – and was declared “total loss”. TESLA claims damages from the managing director personally and stated that the (catastrophic) use by another driver was in breach of the contract between TESLA and the managing director.

The Court in first instance assessed that the contract was on the name of the managing director personally and he was therefor liable. The Court of Appeal however overturned that judgment because the first TESLA was a company car. Now that the repair of the first TESLA was based on a contract between TESLA and the company, logic dictated that the second TESLA was rendered on loan to the company and not its director. Contrary to the “personal” name and signature on the loan contract. Also, the fact that TESLA did declare that it did not give out TESLA’s in loan to other parties than those specific parties who are already client of TESLA, and the circumstance that the form was filled in by a TESLA employee, supported the case of the managing director. The Dutch Supreme Court upheld this line of reasoning by the Court of Appeal.

So, mere practical occurrences liberated the managing director from a very uncomfortable position / the judgment by the Court of first instance. Underscoring the importance of a meticulous drafting of standard contracts and a meticulous monitoring of filling in of such documents by your employees.