1. Overall
In purchases governed by NS 8412, the seller shall manufacture the product agreed between the parties.
Normally, the parties also agree on a deadline for when the product should be finished and delivered.
If the seller is delayed, the buyer is entitled to compensation for his financial loss. If the parties have agreed on dayleave, the buyer may be entitled to dayleave. The daily mulch requirement must be paid by the seller regardless of whether the buyer has a corresponding loss, or not.
Since manufacturing purchase presupposes an interaction between buyer and seller, it is not inconceivable that the buyer could be the one who inflicts a delay on the seller. If this is the case, it will not be reasonable if the seller has to pay compensation and/ or daily allowance to the buyer for the delay.
It is also not reasonable if one reaches the agreed deadline without the product being finished, and then the seller claims that the delay is due to the buyer. If the seller is of the opinion that he is being delayed as a result of something the buyer is either responsible for or has the risk of, the buyer needs to be told this as quickly as possible. Without knowledge of what the buyer may be causing the delay, the buyer cannot be expected to do anything about the situation.
This type of issue occurs relatively frequently in construction contracts, and the standardised contracts have detailed rules for how the parties should deal in such situations. In this connection, reference may be made, for example, to NS 8415, paragraph 24 and NS 8417, paragraph 33.
NS 8412 paragraph 11.4 contains similar rules to the two contract law standards mentioned above.
2. Overview of the rules
3. Seller's right to an extension of the deadline
3.1 Seller's relationship
NS 8412 paragraph 11.4.1 sets out three different alternative reasons why the seller may be entitled to an extension of the deadline, and the common denominator being that the buyer is responsible and/or the risk of the delay.
The first option (letter a) concerns amendments and the provisions in this regard refer to NS 8412 paragraph 37 on amendments. This provision is dealt with in the Chapter IX folder and the article can be read here.
The second option (letter b) concerns obstacles arising from the failure of the buyer's fulfillment of his duties. The provision lists some examples of such failure, but it is not exhaustive. Examples include errors or delays in the buyer's deliveries of drawings or descriptions, or the failure of the seller to access the construction site.
The third example (letter c) is a sack provision for “other conditions the buyer has the risk of”.
3.2 Force majeur
In addition, events outside the seller's control and such as this will not “reasonably” had the opportunity to anticipate and take into account at the time of the agreement giving the seller the right to an extension of the deadline.
It usually takes a lot of effort for an event to be characterized as a force majeur event. We have written about this type of incident, and the conditions under which it should be considered to exist, in an article on hardship included in the joint collection which can be read here.
Note also the provision in the third paragraph, which states that the seller may demand a deadline extension if the buyer is entitled to a deadline extension in accordance with the provisions of NS 8412, paragraph 35.
It follows from paragraph 35 that the buyer may have the right to an extension of the deadline with his duties (such as producing drawings or descriptions) as a result of circumstances for which the seller has responsibility and/ or risk, if any, force majeur.
In such cases, it follows from paragraph 11.4.1.2, third paragraph, that the seller is entitled to an extension of the deadline.
Please note in the last paragraph that force majeur events only entitle to an extension of the deadline. If the seller will demand a remuneration adjustment to the rules in paragraph 41 on “hardship” applied, ref the link to that article above.
4th. Deadline extension requirements
4.1 Seller Neutral Notice
If the seller wants to extend the deadline, he must notify the buyer of this “without undue residence”, see NS 8412 paragraph 11.4.2.1.
If the seller does not comply with the notification deadline, the claim is lost, cf. second paragraph.
The rules are taken from the notification regime in the four contract law standards NS 8405, NS 8407, NS 8415 and NS 8417. These also require notice to be made “without undue delay” and if the deadline is missed, the rule is that the claim is lost.
However, NS 8412 has moderated this rule to some extent by the inclusion of a small safety mechanism. It follows from the last sentence of the second paragraph that the claim for an extension of the deadline is nevertheless not lost if the buyer “knew or needed to know the seller's claim for an extension of the deadline”.
A recurring question when conducting courses or assisting clients who are not fully experienced with these rules is how far is “without undue residence”.
The first part of the answer is that only grounded stays are accepted. It is meant that the seller should be given the opportunity to obtain a certain overview if a situation occurs or he discovers a circumstance that may indicate that he is delayed. He also needs to be given some time to clarify whether this is a relationship that can be reverted to something the buyer has responsibility and/ or the risk of.
That said, an activity obligation is required on the part of the seller. The seller cannot register that such a possible relationship has occurred and so go on vacation to then grab this when he returns.
In the field of construction contracts, we like to say that days are counted when the deadline is to be fixed, but not weeks and in any case not months.
It may be that one should be somewhat more spacious with the parties in terms of how quickly one has to give notice to comply with the “without undue stay” deadline since this is a NS 8412 contract where the parties are normally less experienced with such preclusive deadlines, but that almost gets case law clarifying.
Our advice is to follow the same line as in the construction law standards to make sure that no rights are lost.
The provision does not say anything about how the notice should be made. The only thing that is clear is that the seller should “alert” buyer. We therefore recall the provision of NS 8412 paragraph 4.2 “Notifications, Requirements and Notices” where it appears that, inter alia, notifications “shall be done electronically to agreed addresses”.
In other words, it is not enough to notify orally — the notification must be in writing (electronically) and it must be sent to the right person with the buyer.
We have written about point 4.2 of a joint article for NS 8411 and NS 8412 which you can read here.
Finally, it is clarified that the seller does not need to spend time surveying how long the delay the relevant relationship will cause - on the contrary. If the seller begins to spend time surveying this, there is a high risk that they will miss the notification deadline and then lose their claim.
4.2 Seller's number fixing of the deadline extension requirement
As soon as the seller has “basis for calculating the extent” of the delay, it follows from NS 8412 paragraph 11.4.2.2 that the seller must indicate and justify the number of days for which he requires an extension of the deadline.
The substantiated claim must the seller “state and justify” to buyer “without undue residence”.
Unlike the neutral notice rule, where overstaying the deadline results in the loss of claims, the entire claim is not lost when the deadline for reporting the number of days is exceeded.
It follows from the last paragraph of the provision that in that case the seller is not entitled to a deadline extension of more days than that “the buyer had to understand” the delay would last.
4.3 Buyer Responds to Numbered Claim for Deadline Extension
NS 8412 contains no provision that buyer must respond to seller after receiving a neutral notice in accordance with clause 11.4.2.1.
Buyer's reply obligation is only actualized when Buyer has received Seller's declaration and justification for the assumed days required.
This follows from NS 8412 paragraph 11.4.3.
The buyer must also note that if he does not respond to the seller “without undue delay” after receiving a substantiated claim, the seller's numerical claim shall be taken as the basis.
The only exception to this is in the situation of the seller “had to understand that the claim was untenable”. For the record, it is mentioned that in the event of a legal dispute, it will not be the seller's subjective understanding, or lack thereof, that becomes the subject of evidence. The court would then have to ask itself what a normally diligent and sensible “seller” might have understood about the claim in question.
In conclusion, it is mentioned that the provision does not say anything about how or to whom a response to the seller's numerical claim should be sent.
We refer to NS 8412 clause 4.2 and strongly recommend that the reply be sent electronically and to the buyer's address where this is specified, possibly to regular mail reception as indicated in section 4.2.
