About BPJ
Articles
E-course
Mediation
Konsulenttjenester
Contact Us
FAQ
Log inSign up
Logout
Log inSign up
Logout

Obsolescence and complaints

Kortversjonen

Lytt til artikkelen

1. Introduction

The topic of this article is the obsolescence of claims.

Within construction law, two types of claims are in particular at issue, namely the obsolescence of monetary claims and the obsolescence of deficiency claims.

The title also includes “complaint”. We will not spend a lot of space on complaint rules since these are processed in connection with the individual standard contracts. For the parent contracts you will find the article on complaints here. The point of this article is to point out that obsolescence and warranty claims are two different sets of rules, and both need to be taken into account. It is primarily through shortcomings that we see that one treads wrong here.

2. Briefly about the complaint rules

If there is a defect, you must complain to the person responsible.

A complaint must be made “within a reasonable time” after that man “have or should have discovered” the shortage.

In contract situations where NS contracts are used or where the Bust Registration Act applies, the absolute deadline for advertising is five years after the takeover.

Exceptions to this apply where the defect is due to gross negligence or intent.

What is “reasonable time” to advertise after you “have or should have discovered” will be able to vary.

In consumer affairs, “reasonable time” be several months, whereas in contractual relationships between professionals (where an NS contract has been used), the deadline for advertising will be only a few weeks.

Regardless of whether you advertise within a “reasonable time” as a consumer or professional, you can advertise for up to five years from the takeover.

3. About complaints and obsolescence

From experience, we see many people mixing up the rules on obsolescence and complaints.

Many people believe that as long as one has made a claim, the rights are safeguarded, and do not think that claims become obsolete after a certain time.

However, the rules on limitation and the rules on complaints are two completely different sets of rules, and these must not be confused.

This is a serious misconception that can lead to large losses of value because legitimate claims for defect rectification, price reduction and/ or replacement are obsolete.

Therefore, it is crucial to understand the difference.

In short, the absolute deadline for complaints in the various standard contracts is five years from the takeover. The same is true in matters governed by the bustad entry law.

On the other hand, the general limitation period for e.g. deficiency claims is only three years, cf. Section 3 no. 2 of the Statute of Limitations. That means defects that are advertised more than three years after a takeover are obsolete. This is the starting point. However, in the statute of limitations (section 10 no. 1) there is a provision for an additional period of one year counted from the time one discovered, or should have discovered, a hidden defect or defect. The consequences, and how to deal with such situations, we will come back to.

Even if you advertise on time, claims may be obsolete.

In other words, it is not sufficient to advertise, for example, the takeover or during the first three years after the takeover in order to avoid obsolescence. You have to follow up with whoever you think is responsible for a deficiency.

If you have advertised, time passes and nothing happens, you risk that the requirements you had will become obsolete. It does not help if you are in a dialogue with the person responsible for the shortage. The limitation period is interrupted only in strictly defined, legally regulated ways.

We therefore move on to dealing with the statute of limitations.

4. About obsolescence

4.1 Introductory comment

As mentioned in paragraph 1, in particular in two situations, the statute of limitations presents particular challenges in construction and construction contracts. Firstly, the statute of limitations is of particular relevance in connection with deficiencies. Secondly, they are important to keep in mind when it comes to non-payment of contractor invoices, and especially for invoices sent during the construction period.

We treat the two situations separately.

4.2 Expiration of Deficiency Liability

As mentioned in paragraph 3, the limitation period for defects begins to run from the time of the takeover transaction, cf. statute on limitation of 18.5.1979 no. 18, section 3 no. 2.

It is only at the time of the takeover that the contracting authority is entitled to obtain the flawless “good”, and each defect thus represents a breach of contract.

This means that a deficiency invoked on the takeover business itself becomes obsolete on the day three years after the takeover, unless care has been taken to cancel the statute of limitations.

We deal with timeout breaks in section 4.4 below.

What then about hidden flaws and shortcomings that are not discovered at the time of the takeover, but at a later date?

As mentioned, advertising is available for a period of five years from the takeover, and from experience most hidden errors and shortcomings are discovered during the first year.

The starting point is that claims for such deficiencies are obsolete three years counted from the takeover.

As mentioned in paragraph 3, Section 10 (1) of the statute of limitations contains a separate additional period of one year, which can be applied in case of hidden errors and defects.

It follows from this provision that an additional period of one year is granted to cancel the limitation period provided that one has been unaware of the deficiency (“lacked the necessary knowledge”). The deadline of one year starts to run on the day one “got or should have acquired” knowledge of the deficiency (which in that case we would call a hidden deficiency.

The provision's “should have procured” option might be a bit murky.

Often it is the case that defects can be complicated to uncover. Many times you need the assistance of experts, and it can take some time before the situation is clarified.

Regarding the complaint rules, one should — as soon as one suspects that something is, or may be, a defect — submit a neutral complaint even if further investigation is required.

As mentioned, the additional period of one year begins to run when “got or should have acquired” enough information to understand that there was a hidden error or defect. It is conceivable that the courts will accept that the time only existed when a report was received from an expert — provided that one did not hesitate unnecessarily to obtain one. However, we would advise anyone to justify themselves that the deadline is at the time when one understands that something may be thought to be wrong, and one should understand that an expert should be obtained. In other words, at the time one sent, or should have sent, a neutral complaint.

Since there can be many shortcomings in larger projects, one should have a system in which everything is logged, and in this regard also the deadlines that must be taken care of in order not to risk the requirements becoming obsolete.

We will try to illustrate what we have written with an example.

A contract subject is transferred/-delivered on 1.1.2021.

It follows from the Standard Contracts and the Bust Registration Act, respectively, that the absolute deadline for complaints expires on 1 January 2026.

The ordinary limitation period also begins to run on 1.1.2021, but as mentioned, it expires after three years, i.e. 1.1.2024.

If a hidden defect is discovered on 1 January 2023, the remaining part of the ordinary limitation period will be one year (it expires on 1 January 2024).

In such a situation, the additional deadline of one year will not be helped, since it also expires on 1.1.2024.

The additional deadline of one year is only granted when deficiencies are discovered, or should have been discovered, on or after 2 January 2023. A claim resulting from defects discovered as of 2.1.2023 is successively deprecated one year after they were, or should have been, discovered.

Therefore, if a defect is detected, for example, on June 1, 2025 and complains as it should, the remaining part of the complaint period will be 6 months while the claim is deprecated no later than June 1, 2026.

The additional period of one year is also beneficial when the absolute deadline for complaints of five years has expired and serious hidden errors and deficiencies are discovered. If it can be assumed that such serious hidden errors and deficiencies are due to gross negligence or intent, the deadline for complaint does not apply, but one must nevertheless adhere to the statute of limitations.

4.3 Obsolescence of monetary claims

For monetary claims, the rule of these is that they become obsolete three years after the person was entitled to due payment, cf. Section 3 (1) of the Statute of Limitations.

For a contractor who submits invoices during the construction period, and final invoice in connection with the final settlement, it is not difficult to determine when the limitation period begins to run.

Many have previously dealt with the final settlement and the final invoice, possibly the time of the takeover, in terms of the time of the start of the limitation period.

On 12 November 2013, the Supreme Court handed down a judgment (Rt 2013 p. 1476) in which precisely the timing of the limitation period was the subject of the dispute. This was a construction contract regulated by NS 8405, but the central provisions concerned invoicing which are identical in the various standard contracts and therefore essential to all.

The Supreme Court came to the conclusion that NS 8405 paragraph 28.1, which gives the contractor the right to demand installment payment during the performance of the work, implies that the limitation period under section 3 paragraph 1 of the statute of limitations begins to run as the contractor can claim payment for the work performed. The exact time of commencement of the deadline must be adjusted for the provision in the second paragraph of paragraph 28.1 that installment invoice may not be sent more often than once a month.

The starting point must then be that the limitation period for installment notes begins to run at the due date of each individual invoice, cf. Section 3 (1) of the Limitation Act, which states that “the limitation period shall be counted from the date on which the claimant is entitled at the earliest to claim fulfilment”.

The same must apply to other types of invoices sent during a construction phase, such as invoices relating to additional works. For such works, the starting point in the standard is that you cannot send an invoice until the relevant additional works are “finalized”, cf. NS 8405 paragraph 28.2, first paragraph.

However, the standard allows for invoicing to take place on the way if the works are “of longer duration”.

The starting point should therefore be that the limitation period for any invoice - regardless of the type of work - begins to run at maturity.

Since the Supreme Court states so clearly that the limitation period begins to run as payment can be claimed, a contractor should not be reluctant to send an invoice whenever he has the opportunity to do so. In addition, he should provide a good system for following up on the statute of limitations (in addition to his regular leek routines).

4.4 Cancellation of limitation periods

In practice, there are two forms of deadline interruption that are applicable in contract matters.

Either the limitation period is terminated by the responsible party acknowledging the deficiency and the liability for deficiency, cf. Section 14 of the Limitation Act, or legal action is taken by filing a settlement complaint, subpoena to the district court or initiating arbitration proceedings where this has been agreed, cf. Section 15 of the Limitation Act.

Often it is not desirable to take legal action to cancel the limitation period. If the person considered responsible also does not acknowledge their responsibility, a middle way may be for the parties to agree to extend the limitation period. This is often done when more time is needed to work out causal and possible liability circumstances.

The fact that the limitation period can be extended by agreement opens up Section 28 of the statute of limitations. The deadline cannot be extended by more than three years at a time, but not for claims that are already obsolete.

5. Judgment of the Supreme Court of 12.1.2023 (HR-2023-00093-A)

In our articles on agreements, we have written, among other things, an article about the fact that agreements can be concluded through what is called conclusive behavior, read here.

Thus, a recognition within the meaning of section 14 of the statute of limitations can also be made by conclusive conduct.

If a (sub-) contractor initiates remediation work after the builder or main/general contractor has made a complaint, this will normally be considered recognition through conclusive conduct.

In a relatively recent judgment of the Supreme Court of 12 January 2023, the extent to which such recognition can be understood is problematic.

In that case, contractor had tried in vain to remediate problems with water-borne heat. The remediation attempts focused on something that later turned out not to be the problem. After the limitation period had expired, it was revealed that the cause of the problems was entirely different, and that the remediation of this would be substantially more extensive. A claim for compensation was therefore made. The Supreme Court concluded — after an overall assessment — that it cannot be inferred that even if a contractor tries to remedy in some way, it also implies an acknowledgement of any kind of liability for defects. Therefore, the limitation period for any kind of defect liability was not considered interrupted by recognition (in the form of conclusive conduct).

We have commented on the ruling under “Recent Case Law”, read here.

For both builders and contractors, it is therefore important to observe the limitation period when you have defects that take time to correct.

Tilbake

Obsolescence and complaints

Kortversjonen

Lytt til artikkelen

1. Introduction

The topic of this article is the obsolescence of claims.

Within construction law, two types of claims are in particular at issue, namely the obsolescence of monetary claims and the obsolescence of deficiency claims.

The title also includes “complaint”. We will not spend a lot of space on complaint rules since these are processed in connection with the individual standard contracts. For the parent contracts you will find the article on complaints here. The point of this article is to point out that obsolescence and warranty claims are two different sets of rules, and both need to be taken into account. It is primarily through shortcomings that we see that one treads wrong here.

2. Briefly about the complaint rules

If there is a defect, you must complain to the person responsible.

A complaint must be made “within a reasonable time” after that man “have or should have discovered” the shortage.

In contract situations where NS contracts are used or where the Bust Registration Act applies, the absolute deadline for advertising is five years after the takeover.

Exceptions to this apply where the defect is due to gross negligence or intent.

What is “reasonable time” to advertise after you “have or should have discovered” will be able to vary.

In consumer affairs, “reasonable time” be several months, whereas in contractual relationships between professionals (where an NS contract has been used), the deadline for advertising will be only a few weeks.

Regardless of whether you advertise within a “reasonable time” as a consumer or professional, you can advertise for up to five years from the takeover.

3. About complaints and obsolescence

From experience, we see many people mixing up the rules on obsolescence and complaints.

Many people believe that as long as one has made a claim, the rights are safeguarded, and do not think that claims become obsolete after a certain time.

However, the rules on limitation and the rules on complaints are two completely different sets of rules, and these must not be confused.

This is a serious misconception that can lead to large losses of value because legitimate claims for defect rectification, price reduction and/ or replacement are obsolete.

Therefore, it is crucial to understand the difference.

In short, the absolute deadline for complaints in the various standard contracts is five years from the takeover. The same is true in matters governed by the bustad entry law.

On the other hand, the general limitation period for e.g. deficiency claims is only three years, cf. Section 3 no. 2 of the Statute of Limitations. That means defects that are advertised more than three years after a takeover are obsolete. This is the starting point. However, in the statute of limitations (section 10 no. 1) there is a provision for an additional period of one year counted from the time one discovered, or should have discovered, a hidden defect or defect. The consequences, and how to deal with such situations, we will come back to.

Even if you advertise on time, claims may be obsolete.

In other words, it is not sufficient to advertise, for example, the takeover or during the first three years after the takeover in order to avoid obsolescence. You have to follow up with whoever you think is responsible for a deficiency.

If you have advertised, time passes and nothing happens, you risk that the requirements you had will become obsolete. It does not help if you are in a dialogue with the person responsible for the shortage. The limitation period is interrupted only in strictly defined, legally regulated ways.

We therefore move on to dealing with the statute of limitations.

4. About obsolescence

4.1 Introductory comment

As mentioned in paragraph 1, in particular in two situations, the statute of limitations presents particular challenges in construction and construction contracts. Firstly, the statute of limitations is of particular relevance in connection with deficiencies. Secondly, they are important to keep in mind when it comes to non-payment of contractor invoices, and especially for invoices sent during the construction period.

We treat the two situations separately.

4.2 Expiration of Deficiency Liability

As mentioned in paragraph 3, the limitation period for defects begins to run from the time of the takeover transaction, cf. statute on limitation of 18.5.1979 no. 18, section 3 no. 2.

It is only at the time of the takeover that the contracting authority is entitled to obtain the flawless “good”, and each defect thus represents a breach of contract.

This means that a deficiency invoked on the takeover business itself becomes obsolete on the day three years after the takeover, unless care has been taken to cancel the statute of limitations.

We deal with timeout breaks in section 4.4 below.

What then about hidden flaws and shortcomings that are not discovered at the time of the takeover, but at a later date?

As mentioned, advertising is available for a period of five years from the takeover, and from experience most hidden errors and shortcomings are discovered during the first year.

The starting point is that claims for such deficiencies are obsolete three years counted from the takeover.

As mentioned in paragraph 3, Section 10 (1) of the statute of limitations contains a separate additional period of one year, which can be applied in case of hidden errors and defects.

It follows from this provision that an additional period of one year is granted to cancel the limitation period provided that one has been unaware of the deficiency (“lacked the necessary knowledge”). The deadline of one year starts to run on the day one “got or should have acquired” knowledge of the deficiency (which in that case we would call a hidden deficiency.

The provision's “should have procured” option might be a bit murky.

Often it is the case that defects can be complicated to uncover. Many times you need the assistance of experts, and it can take some time before the situation is clarified.

Regarding the complaint rules, one should — as soon as one suspects that something is, or may be, a defect — submit a neutral complaint even if further investigation is required.

As mentioned, the additional period of one year begins to run when “got or should have acquired” enough information to understand that there was a hidden error or defect. It is conceivable that the courts will accept that the time only existed when a report was received from an expert — provided that one did not hesitate unnecessarily to obtain one. However, we would advise anyone to justify themselves that the deadline is at the time when one understands that something may be thought to be wrong, and one should understand that an expert should be obtained. In other words, at the time one sent, or should have sent, a neutral complaint.

Since there can be many shortcomings in larger projects, one should have a system in which everything is logged, and in this regard also the deadlines that must be taken care of in order not to risk the requirements becoming obsolete.

We will try to illustrate what we have written with an example.

A contract subject is transferred/-delivered on 1.1.2021.

It follows from the Standard Contracts and the Bust Registration Act, respectively, that the absolute deadline for complaints expires on 1 January 2026.

The ordinary limitation period also begins to run on 1.1.2021, but as mentioned, it expires after three years, i.e. 1.1.2024.

If a hidden defect is discovered on 1 January 2023, the remaining part of the ordinary limitation period will be one year (it expires on 1 January 2024).

In such a situation, the additional deadline of one year will not be helped, since it also expires on 1.1.2024.

The additional deadline of one year is only granted when deficiencies are discovered, or should have been discovered, on or after 2 January 2023. A claim resulting from defects discovered as of 2.1.2023 is successively deprecated one year after they were, or should have been, discovered.

Therefore, if a defect is detected, for example, on June 1, 2025 and complains as it should, the remaining part of the complaint period will be 6 months while the claim is deprecated no later than June 1, 2026.

The additional period of one year is also beneficial when the absolute deadline for complaints of five years has expired and serious hidden errors and deficiencies are discovered. If it can be assumed that such serious hidden errors and deficiencies are due to gross negligence or intent, the deadline for complaint does not apply, but one must nevertheless adhere to the statute of limitations.

4.3 Obsolescence of monetary claims

For monetary claims, the rule of these is that they become obsolete three years after the person was entitled to due payment, cf. Section 3 (1) of the Statute of Limitations.

For a contractor who submits invoices during the construction period, and final invoice in connection with the final settlement, it is not difficult to determine when the limitation period begins to run.

Many have previously dealt with the final settlement and the final invoice, possibly the time of the takeover, in terms of the time of the start of the limitation period.

On 12 November 2013, the Supreme Court handed down a judgment (Rt 2013 p. 1476) in which precisely the timing of the limitation period was the subject of the dispute. This was a construction contract regulated by NS 8405, but the central provisions concerned invoicing which are identical in the various standard contracts and therefore essential to all.

The Supreme Court came to the conclusion that NS 8405 paragraph 28.1, which gives the contractor the right to demand installment payment during the performance of the work, implies that the limitation period under section 3 paragraph 1 of the statute of limitations begins to run as the contractor can claim payment for the work performed. The exact time of commencement of the deadline must be adjusted for the provision in the second paragraph of paragraph 28.1 that installment invoice may not be sent more often than once a month.

The starting point must then be that the limitation period for installment notes begins to run at the due date of each individual invoice, cf. Section 3 (1) of the Limitation Act, which states that “the limitation period shall be counted from the date on which the claimant is entitled at the earliest to claim fulfilment”.

The same must apply to other types of invoices sent during a construction phase, such as invoices relating to additional works. For such works, the starting point in the standard is that you cannot send an invoice until the relevant additional works are “finalized”, cf. NS 8405 paragraph 28.2, first paragraph.

However, the standard allows for invoicing to take place on the way if the works are “of longer duration”.

The starting point should therefore be that the limitation period for any invoice - regardless of the type of work - begins to run at maturity.

Since the Supreme Court states so clearly that the limitation period begins to run as payment can be claimed, a contractor should not be reluctant to send an invoice whenever he has the opportunity to do so. In addition, he should provide a good system for following up on the statute of limitations (in addition to his regular leek routines).

4.4 Cancellation of limitation periods

In practice, there are two forms of deadline interruption that are applicable in contract matters.

Either the limitation period is terminated by the responsible party acknowledging the deficiency and the liability for deficiency, cf. Section 14 of the Limitation Act, or legal action is taken by filing a settlement complaint, subpoena to the district court or initiating arbitration proceedings where this has been agreed, cf. Section 15 of the Limitation Act.

Often it is not desirable to take legal action to cancel the limitation period. If the person considered responsible also does not acknowledge their responsibility, a middle way may be for the parties to agree to extend the limitation period. This is often done when more time is needed to work out causal and possible liability circumstances.

The fact that the limitation period can be extended by agreement opens up Section 28 of the statute of limitations. The deadline cannot be extended by more than three years at a time, but not for claims that are already obsolete.

5. Judgment of the Supreme Court of 12.1.2023 (HR-2023-00093-A)

In our articles on agreements, we have written, among other things, an article about the fact that agreements can be concluded through what is called conclusive behavior, read here.

Thus, a recognition within the meaning of section 14 of the statute of limitations can also be made by conclusive conduct.

If a (sub-) contractor initiates remediation work after the builder or main/general contractor has made a complaint, this will normally be considered recognition through conclusive conduct.

In a relatively recent judgment of the Supreme Court of 12 January 2023, the extent to which such recognition can be understood is problematic.

In that case, contractor had tried in vain to remediate problems with water-borne heat. The remediation attempts focused on something that later turned out not to be the problem. After the limitation period had expired, it was revealed that the cause of the problems was entirely different, and that the remediation of this would be substantially more extensive. A claim for compensation was therefore made. The Supreme Court concluded — after an overall assessment — that it cannot be inferred that even if a contractor tries to remedy in some way, it also implies an acknowledgement of any kind of liability for defects. Therefore, the limitation period for any kind of defect liability was not considered interrupted by recognition (in the form of conclusive conduct).

We have commented on the ruling under “Recent Case Law”, read here.

For both builders and contractors, it is therefore important to observe the limitation period when you have defects that take time to correct.

Tilbake

Obsolescence and complaints

Kortversjonen

Lytt til artikkelen

1. Introduction

The topic of this article is the obsolescence of claims.

Within construction law, two types of claims are in particular at issue, namely the obsolescence of monetary claims and the obsolescence of deficiency claims.

The title also includes “complaint”. We will not spend a lot of space on complaint rules since these are processed in connection with the individual standard contracts. For the parent contracts you will find the article on complaints here. The point of this article is to point out that obsolescence and warranty claims are two different sets of rules, and both need to be taken into account. It is primarily through shortcomings that we see that one treads wrong here.

2. Briefly about the complaint rules

If there is a defect, you must complain to the person responsible.

A complaint must be made “within a reasonable time” after that man “have or should have discovered” the shortage.

In contract situations where NS contracts are used or where the Bust Registration Act applies, the absolute deadline for advertising is five years after the takeover.

Exceptions to this apply where the defect is due to gross negligence or intent.

What is “reasonable time” to advertise after you “have or should have discovered” will be able to vary.

In consumer affairs, “reasonable time” be several months, whereas in contractual relationships between professionals (where an NS contract has been used), the deadline for advertising will be only a few weeks.

Regardless of whether you advertise within a “reasonable time” as a consumer or professional, you can advertise for up to five years from the takeover.

3. About complaints and obsolescence

From experience, we see many people mixing up the rules on obsolescence and complaints.

Many people believe that as long as one has made a claim, the rights are safeguarded, and do not think that claims become obsolete after a certain time.

However, the rules on limitation and the rules on complaints are two completely different sets of rules, and these must not be confused.

This is a serious misconception that can lead to large losses of value because legitimate claims for defect rectification, price reduction and/ or replacement are obsolete.

Therefore, it is crucial to understand the difference.

In short, the absolute deadline for complaints in the various standard contracts is five years from the takeover. The same is true in matters governed by the bustad entry law.

On the other hand, the general limitation period for e.g. deficiency claims is only three years, cf. Section 3 no. 2 of the Statute of Limitations. That means defects that are advertised more than three years after a takeover are obsolete. This is the starting point. However, in the statute of limitations (section 10 no. 1) there is a provision for an additional period of one year counted from the time one discovered, or should have discovered, a hidden defect or defect. The consequences, and how to deal with such situations, we will come back to.

Even if you advertise on time, claims may be obsolete.

In other words, it is not sufficient to advertise, for example, the takeover or during the first three years after the takeover in order to avoid obsolescence. You have to follow up with whoever you think is responsible for a deficiency.

If you have advertised, time passes and nothing happens, you risk that the requirements you had will become obsolete. It does not help if you are in a dialogue with the person responsible for the shortage. The limitation period is interrupted only in strictly defined, legally regulated ways.

We therefore move on to dealing with the statute of limitations.

4. About obsolescence

4.1 Introductory comment

As mentioned in paragraph 1, in particular in two situations, the statute of limitations presents particular challenges in construction and construction contracts. Firstly, the statute of limitations is of particular relevance in connection with deficiencies. Secondly, they are important to keep in mind when it comes to non-payment of contractor invoices, and especially for invoices sent during the construction period.

We treat the two situations separately.

4.2 Expiration of Deficiency Liability

As mentioned in paragraph 3, the limitation period for defects begins to run from the time of the takeover transaction, cf. statute on limitation of 18.5.1979 no. 18, section 3 no. 2.

It is only at the time of the takeover that the contracting authority is entitled to obtain the flawless “good”, and each defect thus represents a breach of contract.

This means that a deficiency invoked on the takeover business itself becomes obsolete on the day three years after the takeover, unless care has been taken to cancel the statute of limitations.

We deal with timeout breaks in section 4.4 below.

What then about hidden flaws and shortcomings that are not discovered at the time of the takeover, but at a later date?

As mentioned, advertising is available for a period of five years from the takeover, and from experience most hidden errors and shortcomings are discovered during the first year.

The starting point is that claims for such deficiencies are obsolete three years counted from the takeover.

As mentioned in paragraph 3, Section 10 (1) of the statute of limitations contains a separate additional period of one year, which can be applied in case of hidden errors and defects.

It follows from this provision that an additional period of one year is granted to cancel the limitation period provided that one has been unaware of the deficiency (“lacked the necessary knowledge”). The deadline of one year starts to run on the day one “got or should have acquired” knowledge of the deficiency (which in that case we would call a hidden deficiency.

The provision's “should have procured” option might be a bit murky.

Often it is the case that defects can be complicated to uncover. Many times you need the assistance of experts, and it can take some time before the situation is clarified.

Regarding the complaint rules, one should — as soon as one suspects that something is, or may be, a defect — submit a neutral complaint even if further investigation is required.

As mentioned, the additional period of one year begins to run when “got or should have acquired” enough information to understand that there was a hidden error or defect. It is conceivable that the courts will accept that the time only existed when a report was received from an expert — provided that one did not hesitate unnecessarily to obtain one. However, we would advise anyone to justify themselves that the deadline is at the time when one understands that something may be thought to be wrong, and one should understand that an expert should be obtained. In other words, at the time one sent, or should have sent, a neutral complaint.

Since there can be many shortcomings in larger projects, one should have a system in which everything is logged, and in this regard also the deadlines that must be taken care of in order not to risk the requirements becoming obsolete.

We will try to illustrate what we have written with an example.

A contract subject is transferred/-delivered on 1.1.2021.

It follows from the Standard Contracts and the Bust Registration Act, respectively, that the absolute deadline for complaints expires on 1 January 2026.

The ordinary limitation period also begins to run on 1.1.2021, but as mentioned, it expires after three years, i.e. 1.1.2024.

If a hidden defect is discovered on 1 January 2023, the remaining part of the ordinary limitation period will be one year (it expires on 1 January 2024).

In such a situation, the additional deadline of one year will not be helped, since it also expires on 1.1.2024.

The additional deadline of one year is only granted when deficiencies are discovered, or should have been discovered, on or after 2 January 2023. A claim resulting from defects discovered as of 2.1.2023 is successively deprecated one year after they were, or should have been, discovered.

Therefore, if a defect is detected, for example, on June 1, 2025 and complains as it should, the remaining part of the complaint period will be 6 months while the claim is deprecated no later than June 1, 2026.

The additional period of one year is also beneficial when the absolute deadline for complaints of five years has expired and serious hidden errors and deficiencies are discovered. If it can be assumed that such serious hidden errors and deficiencies are due to gross negligence or intent, the deadline for complaint does not apply, but one must nevertheless adhere to the statute of limitations.

4.3 Obsolescence of monetary claims

For monetary claims, the rule of these is that they become obsolete three years after the person was entitled to due payment, cf. Section 3 (1) of the Statute of Limitations.

For a contractor who submits invoices during the construction period, and final invoice in connection with the final settlement, it is not difficult to determine when the limitation period begins to run.

Many have previously dealt with the final settlement and the final invoice, possibly the time of the takeover, in terms of the time of the start of the limitation period.

On 12 November 2013, the Supreme Court handed down a judgment (Rt 2013 p. 1476) in which precisely the timing of the limitation period was the subject of the dispute. This was a construction contract regulated by NS 8405, but the central provisions concerned invoicing which are identical in the various standard contracts and therefore essential to all.

The Supreme Court came to the conclusion that NS 8405 paragraph 28.1, which gives the contractor the right to demand installment payment during the performance of the work, implies that the limitation period under section 3 paragraph 1 of the statute of limitations begins to run as the contractor can claim payment for the work performed. The exact time of commencement of the deadline must be adjusted for the provision in the second paragraph of paragraph 28.1 that installment invoice may not be sent more often than once a month.

The starting point must then be that the limitation period for installment notes begins to run at the due date of each individual invoice, cf. Section 3 (1) of the Limitation Act, which states that “the limitation period shall be counted from the date on which the claimant is entitled at the earliest to claim fulfilment”.

The same must apply to other types of invoices sent during a construction phase, such as invoices relating to additional works. For such works, the starting point in the standard is that you cannot send an invoice until the relevant additional works are “finalized”, cf. NS 8405 paragraph 28.2, first paragraph.

However, the standard allows for invoicing to take place on the way if the works are “of longer duration”.

The starting point should therefore be that the limitation period for any invoice - regardless of the type of work - begins to run at maturity.

Since the Supreme Court states so clearly that the limitation period begins to run as payment can be claimed, a contractor should not be reluctant to send an invoice whenever he has the opportunity to do so. In addition, he should provide a good system for following up on the statute of limitations (in addition to his regular leek routines).

4.4 Cancellation of limitation periods

In practice, there are two forms of deadline interruption that are applicable in contract matters.

Either the limitation period is terminated by the responsible party acknowledging the deficiency and the liability for deficiency, cf. Section 14 of the Limitation Act, or legal action is taken by filing a settlement complaint, subpoena to the district court or initiating arbitration proceedings where this has been agreed, cf. Section 15 of the Limitation Act.

Often it is not desirable to take legal action to cancel the limitation period. If the person considered responsible also does not acknowledge their responsibility, a middle way may be for the parties to agree to extend the limitation period. This is often done when more time is needed to work out causal and possible liability circumstances.

The fact that the limitation period can be extended by agreement opens up Section 28 of the statute of limitations. The deadline cannot be extended by more than three years at a time, but not for claims that are already obsolete.

5. Judgment of the Supreme Court of 12.1.2023 (HR-2023-00093-A)

In our articles on agreements, we have written, among other things, an article about the fact that agreements can be concluded through what is called conclusive behavior, read here.

Thus, a recognition within the meaning of section 14 of the statute of limitations can also be made by conclusive conduct.

If a (sub-) contractor initiates remediation work after the builder or main/general contractor has made a complaint, this will normally be considered recognition through conclusive conduct.

In a relatively recent judgment of the Supreme Court of 12 January 2023, the extent to which such recognition can be understood is problematic.

In that case, contractor had tried in vain to remediate problems with water-borne heat. The remediation attempts focused on something that later turned out not to be the problem. After the limitation period had expired, it was revealed that the cause of the problems was entirely different, and that the remediation of this would be substantially more extensive. A claim for compensation was therefore made. The Supreme Court concluded — after an overall assessment — that it cannot be inferred that even if a contractor tries to remedy in some way, it also implies an acknowledgement of any kind of liability for defects. Therefore, the limitation period for any kind of defect liability was not considered interrupted by recognition (in the form of conclusive conduct).

We have commented on the ruling under “Recent Case Law”, read here.

For both builders and contractors, it is therefore important to observe the limitation period when you have defects that take time to correct.

Tilbake

Obsolescence and complaints

Kortversjonen

Lytt til artikkelen

1. Introduction

The topic of this article is the obsolescence of claims.

Within construction law, two types of claims are in particular at issue, namely the obsolescence of monetary claims and the obsolescence of deficiency claims.

The title also includes “complaint”. We will not spend a lot of space on complaint rules since these are processed in connection with the individual standard contracts. For the parent contracts you will find the article on complaints here. The point of this article is to point out that obsolescence and warranty claims are two different sets of rules, and both need to be taken into account. It is primarily through shortcomings that we see that one treads wrong here.

2. Briefly about the complaint rules

If there is a defect, you must complain to the person responsible.

A complaint must be made “within a reasonable time” after that man “have or should have discovered” the shortage.

In contract situations where NS contracts are used or where the Bust Registration Act applies, the absolute deadline for advertising is five years after the takeover.

Exceptions to this apply where the defect is due to gross negligence or intent.

What is “reasonable time” to advertise after you “have or should have discovered” will be able to vary.

In consumer affairs, “reasonable time” be several months, whereas in contractual relationships between professionals (where an NS contract has been used), the deadline for advertising will be only a few weeks.

Regardless of whether you advertise within a “reasonable time” as a consumer or professional, you can advertise for up to five years from the takeover.

3. About complaints and obsolescence

From experience, we see many people mixing up the rules on obsolescence and complaints.

Many people believe that as long as one has made a claim, the rights are safeguarded, and do not think that claims become obsolete after a certain time.

However, the rules on limitation and the rules on complaints are two completely different sets of rules, and these must not be confused.

This is a serious misconception that can lead to large losses of value because legitimate claims for defect rectification, price reduction and/ or replacement are obsolete.

Therefore, it is crucial to understand the difference.

In short, the absolute deadline for complaints in the various standard contracts is five years from the takeover. The same is true in matters governed by the bustad entry law.

On the other hand, the general limitation period for e.g. deficiency claims is only three years, cf. Section 3 no. 2 of the Statute of Limitations. That means defects that are advertised more than three years after a takeover are obsolete. This is the starting point. However, in the statute of limitations (section 10 no. 1) there is a provision for an additional period of one year counted from the time one discovered, or should have discovered, a hidden defect or defect. The consequences, and how to deal with such situations, we will come back to.

Even if you advertise on time, claims may be obsolete.

In other words, it is not sufficient to advertise, for example, the takeover or during the first three years after the takeover in order to avoid obsolescence. You have to follow up with whoever you think is responsible for a deficiency.

If you have advertised, time passes and nothing happens, you risk that the requirements you had will become obsolete. It does not help if you are in a dialogue with the person responsible for the shortage. The limitation period is interrupted only in strictly defined, legally regulated ways.

We therefore move on to dealing with the statute of limitations.

4. About obsolescence

4.1 Introductory comment

As mentioned in paragraph 1, in particular in two situations, the statute of limitations presents particular challenges in construction and construction contracts. Firstly, the statute of limitations is of particular relevance in connection with deficiencies. Secondly, they are important to keep in mind when it comes to non-payment of contractor invoices, and especially for invoices sent during the construction period.

We treat the two situations separately.

4.2 Expiration of Deficiency Liability

As mentioned in paragraph 3, the limitation period for defects begins to run from the time of the takeover transaction, cf. statute on limitation of 18.5.1979 no. 18, section 3 no. 2.

It is only at the time of the takeover that the contracting authority is entitled to obtain the flawless “good”, and each defect thus represents a breach of contract.

This means that a deficiency invoked on the takeover business itself becomes obsolete on the day three years after the takeover, unless care has been taken to cancel the statute of limitations.

We deal with timeout breaks in section 4.4 below.

What then about hidden flaws and shortcomings that are not discovered at the time of the takeover, but at a later date?

As mentioned, advertising is available for a period of five years from the takeover, and from experience most hidden errors and shortcomings are discovered during the first year.

The starting point is that claims for such deficiencies are obsolete three years counted from the takeover.

As mentioned in paragraph 3, Section 10 (1) of the statute of limitations contains a separate additional period of one year, which can be applied in case of hidden errors and defects.

It follows from this provision that an additional period of one year is granted to cancel the limitation period provided that one has been unaware of the deficiency (“lacked the necessary knowledge”). The deadline of one year starts to run on the day one “got or should have acquired” knowledge of the deficiency (which in that case we would call a hidden deficiency.

The provision's “should have procured” option might be a bit murky.

Often it is the case that defects can be complicated to uncover. Many times you need the assistance of experts, and it can take some time before the situation is clarified.

Regarding the complaint rules, one should — as soon as one suspects that something is, or may be, a defect — submit a neutral complaint even if further investigation is required.

As mentioned, the additional period of one year begins to run when “got or should have acquired” enough information to understand that there was a hidden error or defect. It is conceivable that the courts will accept that the time only existed when a report was received from an expert — provided that one did not hesitate unnecessarily to obtain one. However, we would advise anyone to justify themselves that the deadline is at the time when one understands that something may be thought to be wrong, and one should understand that an expert should be obtained. In other words, at the time one sent, or should have sent, a neutral complaint.

Since there can be many shortcomings in larger projects, one should have a system in which everything is logged, and in this regard also the deadlines that must be taken care of in order not to risk the requirements becoming obsolete.

We will try to illustrate what we have written with an example.

A contract subject is transferred/-delivered on 1.1.2021.

It follows from the Standard Contracts and the Bust Registration Act, respectively, that the absolute deadline for complaints expires on 1 January 2026.

The ordinary limitation period also begins to run on 1.1.2021, but as mentioned, it expires after three years, i.e. 1.1.2024.

If a hidden defect is discovered on 1 January 2023, the remaining part of the ordinary limitation period will be one year (it expires on 1 January 2024).

In such a situation, the additional deadline of one year will not be helped, since it also expires on 1.1.2024.

The additional deadline of one year is only granted when deficiencies are discovered, or should have been discovered, on or after 2 January 2023. A claim resulting from defects discovered as of 2.1.2023 is successively deprecated one year after they were, or should have been, discovered.

Therefore, if a defect is detected, for example, on June 1, 2025 and complains as it should, the remaining part of the complaint period will be 6 months while the claim is deprecated no later than June 1, 2026.

The additional period of one year is also beneficial when the absolute deadline for complaints of five years has expired and serious hidden errors and deficiencies are discovered. If it can be assumed that such serious hidden errors and deficiencies are due to gross negligence or intent, the deadline for complaint does not apply, but one must nevertheless adhere to the statute of limitations.

4.3 Obsolescence of monetary claims

For monetary claims, the rule of these is that they become obsolete three years after the person was entitled to due payment, cf. Section 3 (1) of the Statute of Limitations.

For a contractor who submits invoices during the construction period, and final invoice in connection with the final settlement, it is not difficult to determine when the limitation period begins to run.

Many have previously dealt with the final settlement and the final invoice, possibly the time of the takeover, in terms of the time of the start of the limitation period.

On 12 November 2013, the Supreme Court handed down a judgment (Rt 2013 p. 1476) in which precisely the timing of the limitation period was the subject of the dispute. This was a construction contract regulated by NS 8405, but the central provisions concerned invoicing which are identical in the various standard contracts and therefore essential to all.

The Supreme Court came to the conclusion that NS 8405 paragraph 28.1, which gives the contractor the right to demand installment payment during the performance of the work, implies that the limitation period under section 3 paragraph 1 of the statute of limitations begins to run as the contractor can claim payment for the work performed. The exact time of commencement of the deadline must be adjusted for the provision in the second paragraph of paragraph 28.1 that installment invoice may not be sent more often than once a month.

The starting point must then be that the limitation period for installment notes begins to run at the due date of each individual invoice, cf. Section 3 (1) of the Limitation Act, which states that “the limitation period shall be counted from the date on which the claimant is entitled at the earliest to claim fulfilment”.

The same must apply to other types of invoices sent during a construction phase, such as invoices relating to additional works. For such works, the starting point in the standard is that you cannot send an invoice until the relevant additional works are “finalized”, cf. NS 8405 paragraph 28.2, first paragraph.

However, the standard allows for invoicing to take place on the way if the works are “of longer duration”.

The starting point should therefore be that the limitation period for any invoice - regardless of the type of work - begins to run at maturity.

Since the Supreme Court states so clearly that the limitation period begins to run as payment can be claimed, a contractor should not be reluctant to send an invoice whenever he has the opportunity to do so. In addition, he should provide a good system for following up on the statute of limitations (in addition to his regular leek routines).

4.4 Cancellation of limitation periods

In practice, there are two forms of deadline interruption that are applicable in contract matters.

Either the limitation period is terminated by the responsible party acknowledging the deficiency and the liability for deficiency, cf. Section 14 of the Limitation Act, or legal action is taken by filing a settlement complaint, subpoena to the district court or initiating arbitration proceedings where this has been agreed, cf. Section 15 of the Limitation Act.

Often it is not desirable to take legal action to cancel the limitation period. If the person considered responsible also does not acknowledge their responsibility, a middle way may be for the parties to agree to extend the limitation period. This is often done when more time is needed to work out causal and possible liability circumstances.

The fact that the limitation period can be extended by agreement opens up Section 28 of the statute of limitations. The deadline cannot be extended by more than three years at a time, but not for claims that are already obsolete.

5. Judgment of the Supreme Court of 12.1.2023 (HR-2023-00093-A)

In our articles on agreements, we have written, among other things, an article about the fact that agreements can be concluded through what is called conclusive behavior, read here.

Thus, a recognition within the meaning of section 14 of the statute of limitations can also be made by conclusive conduct.

If a (sub-) contractor initiates remediation work after the builder or main/general contractor has made a complaint, this will normally be considered recognition through conclusive conduct.

In a relatively recent judgment of the Supreme Court of 12 January 2023, the extent to which such recognition can be understood is problematic.

In that case, contractor had tried in vain to remediate problems with water-borne heat. The remediation attempts focused on something that later turned out not to be the problem. After the limitation period had expired, it was revealed that the cause of the problems was entirely different, and that the remediation of this would be substantially more extensive. A claim for compensation was therefore made. The Supreme Court concluded — after an overall assessment — that it cannot be inferred that even if a contractor tries to remedy in some way, it also implies an acknowledgement of any kind of liability for defects. Therefore, the limitation period for any kind of defect liability was not considered interrupted by recognition (in the form of conclusive conduct).

We have commented on the ruling under “Recent Case Law”, read here.

For both builders and contractors, it is therefore important to observe the limitation period when you have defects that take time to correct.

Obsolescence and complaints

Kortversjonen

Lytt til artikkelen

1. Introduction

The topic of this article is the obsolescence of claims.

Within construction law, two types of claims are in particular at issue, namely the obsolescence of monetary claims and the obsolescence of deficiency claims.

The title also includes “complaint”. We will not spend a lot of space on complaint rules since these are processed in connection with the individual standard contracts. For the parent contracts you will find the article on complaints here. The point of this article is to point out that obsolescence and warranty claims are two different sets of rules, and both need to be taken into account. It is primarily through shortcomings that we see that one treads wrong here.

2. Briefly about the complaint rules

If there is a defect, you must complain to the person responsible.

A complaint must be made “within a reasonable time” after that man “have or should have discovered” the shortage.

In contract situations where NS contracts are used or where the Bust Registration Act applies, the absolute deadline for advertising is five years after the takeover.

Exceptions to this apply where the defect is due to gross negligence or intent.

What is “reasonable time” to advertise after you “have or should have discovered” will be able to vary.

In consumer affairs, “reasonable time” be several months, whereas in contractual relationships between professionals (where an NS contract has been used), the deadline for advertising will be only a few weeks.

Regardless of whether you advertise within a “reasonable time” as a consumer or professional, you can advertise for up to five years from the takeover.

3. About complaints and obsolescence

From experience, we see many people mixing up the rules on obsolescence and complaints.

Many people believe that as long as one has made a claim, the rights are safeguarded, and do not think that claims become obsolete after a certain time.

However, the rules on limitation and the rules on complaints are two completely different sets of rules, and these must not be confused.

This is a serious misconception that can lead to large losses of value because legitimate claims for defect rectification, price reduction and/ or replacement are obsolete.

Therefore, it is crucial to understand the difference.

In short, the absolute deadline for complaints in the various standard contracts is five years from the takeover. The same is true in matters governed by the bustad entry law.

On the other hand, the general limitation period for e.g. deficiency claims is only three years, cf. Section 3 no. 2 of the Statute of Limitations. That means defects that are advertised more than three years after a takeover are obsolete. This is the starting point. However, in the statute of limitations (section 10 no. 1) there is a provision for an additional period of one year counted from the time one discovered, or should have discovered, a hidden defect or defect. The consequences, and how to deal with such situations, we will come back to.

Even if you advertise on time, claims may be obsolete.

In other words, it is not sufficient to advertise, for example, the takeover or during the first three years after the takeover in order to avoid obsolescence. You have to follow up with whoever you think is responsible for a deficiency.

If you have advertised, time passes and nothing happens, you risk that the requirements you had will become obsolete. It does not help if you are in a dialogue with the person responsible for the shortage. The limitation period is interrupted only in strictly defined, legally regulated ways.

We therefore move on to dealing with the statute of limitations.

4. About obsolescence

4.1 Introductory comment

As mentioned in paragraph 1, in particular in two situations, the statute of limitations presents particular challenges in construction and construction contracts. Firstly, the statute of limitations is of particular relevance in connection with deficiencies. Secondly, they are important to keep in mind when it comes to non-payment of contractor invoices, and especially for invoices sent during the construction period.

We treat the two situations separately.

4.2 Expiration of Deficiency Liability

As mentioned in paragraph 3, the limitation period for defects begins to run from the time of the takeover transaction, cf. statute on limitation of 18.5.1979 no. 18, section 3 no. 2.

It is only at the time of the takeover that the contracting authority is entitled to obtain the flawless “good”, and each defect thus represents a breach of contract.

This means that a deficiency invoked on the takeover business itself becomes obsolete on the day three years after the takeover, unless care has been taken to cancel the statute of limitations.

We deal with timeout breaks in section 4.4 below.

What then about hidden flaws and shortcomings that are not discovered at the time of the takeover, but at a later date?

As mentioned, advertising is available for a period of five years from the takeover, and from experience most hidden errors and shortcomings are discovered during the first year.

The starting point is that claims for such deficiencies are obsolete three years counted from the takeover.

As mentioned in paragraph 3, Section 10 (1) of the statute of limitations contains a separate additional period of one year, which can be applied in case of hidden errors and defects.

It follows from this provision that an additional period of one year is granted to cancel the limitation period provided that one has been unaware of the deficiency (“lacked the necessary knowledge”). The deadline of one year starts to run on the day one “got or should have acquired” knowledge of the deficiency (which in that case we would call a hidden deficiency.

The provision's “should have procured” option might be a bit murky.

Often it is the case that defects can be complicated to uncover. Many times you need the assistance of experts, and it can take some time before the situation is clarified.

Regarding the complaint rules, one should — as soon as one suspects that something is, or may be, a defect — submit a neutral complaint even if further investigation is required.

As mentioned, the additional period of one year begins to run when “got or should have acquired” enough information to understand that there was a hidden error or defect. It is conceivable that the courts will accept that the time only existed when a report was received from an expert — provided that one did not hesitate unnecessarily to obtain one. However, we would advise anyone to justify themselves that the deadline is at the time when one understands that something may be thought to be wrong, and one should understand that an expert should be obtained. In other words, at the time one sent, or should have sent, a neutral complaint.

Since there can be many shortcomings in larger projects, one should have a system in which everything is logged, and in this regard also the deadlines that must be taken care of in order not to risk the requirements becoming obsolete.

We will try to illustrate what we have written with an example.

A contract subject is transferred/-delivered on 1.1.2021.

It follows from the Standard Contracts and the Bust Registration Act, respectively, that the absolute deadline for complaints expires on 1 January 2026.

The ordinary limitation period also begins to run on 1.1.2021, but as mentioned, it expires after three years, i.e. 1.1.2024.

If a hidden defect is discovered on 1 January 2023, the remaining part of the ordinary limitation period will be one year (it expires on 1 January 2024).

In such a situation, the additional deadline of one year will not be helped, since it also expires on 1.1.2024.

The additional deadline of one year is only granted when deficiencies are discovered, or should have been discovered, on or after 2 January 2023. A claim resulting from defects discovered as of 2.1.2023 is successively deprecated one year after they were, or should have been, discovered.

Therefore, if a defect is detected, for example, on June 1, 2025 and complains as it should, the remaining part of the complaint period will be 6 months while the claim is deprecated no later than June 1, 2026.

The additional period of one year is also beneficial when the absolute deadline for complaints of five years has expired and serious hidden errors and deficiencies are discovered. If it can be assumed that such serious hidden errors and deficiencies are due to gross negligence or intent, the deadline for complaint does not apply, but one must nevertheless adhere to the statute of limitations.

4.3 Obsolescence of monetary claims

For monetary claims, the rule of these is that they become obsolete three years after the person was entitled to due payment, cf. Section 3 (1) of the Statute of Limitations.

For a contractor who submits invoices during the construction period, and final invoice in connection with the final settlement, it is not difficult to determine when the limitation period begins to run.

Many have previously dealt with the final settlement and the final invoice, possibly the time of the takeover, in terms of the time of the start of the limitation period.

On 12 November 2013, the Supreme Court handed down a judgment (Rt 2013 p. 1476) in which precisely the timing of the limitation period was the subject of the dispute. This was a construction contract regulated by NS 8405, but the central provisions concerned invoicing which are identical in the various standard contracts and therefore essential to all.

The Supreme Court came to the conclusion that NS 8405 paragraph 28.1, which gives the contractor the right to demand installment payment during the performance of the work, implies that the limitation period under section 3 paragraph 1 of the statute of limitations begins to run as the contractor can claim payment for the work performed. The exact time of commencement of the deadline must be adjusted for the provision in the second paragraph of paragraph 28.1 that installment invoice may not be sent more often than once a month.

The starting point must then be that the limitation period for installment notes begins to run at the due date of each individual invoice, cf. Section 3 (1) of the Limitation Act, which states that “the limitation period shall be counted from the date on which the claimant is entitled at the earliest to claim fulfilment”.

The same must apply to other types of invoices sent during a construction phase, such as invoices relating to additional works. For such works, the starting point in the standard is that you cannot send an invoice until the relevant additional works are “finalized”, cf. NS 8405 paragraph 28.2, first paragraph.

However, the standard allows for invoicing to take place on the way if the works are “of longer duration”.

The starting point should therefore be that the limitation period for any invoice - regardless of the type of work - begins to run at maturity.

Since the Supreme Court states so clearly that the limitation period begins to run as payment can be claimed, a contractor should not be reluctant to send an invoice whenever he has the opportunity to do so. In addition, he should provide a good system for following up on the statute of limitations (in addition to his regular leek routines).

4.4 Cancellation of limitation periods

In practice, there are two forms of deadline interruption that are applicable in contract matters.

Either the limitation period is terminated by the responsible party acknowledging the deficiency and the liability for deficiency, cf. Section 14 of the Limitation Act, or legal action is taken by filing a settlement complaint, subpoena to the district court or initiating arbitration proceedings where this has been agreed, cf. Section 15 of the Limitation Act.

Often it is not desirable to take legal action to cancel the limitation period. If the person considered responsible also does not acknowledge their responsibility, a middle way may be for the parties to agree to extend the limitation period. This is often done when more time is needed to work out causal and possible liability circumstances.

The fact that the limitation period can be extended by agreement opens up Section 28 of the statute of limitations. The deadline cannot be extended by more than three years at a time, but not for claims that are already obsolete.

5. Judgment of the Supreme Court of 12.1.2023 (HR-2023-00093-A)

In our articles on agreements, we have written, among other things, an article about the fact that agreements can be concluded through what is called conclusive behavior, read here.

Thus, a recognition within the meaning of section 14 of the statute of limitations can also be made by conclusive conduct.

If a (sub-) contractor initiates remediation work after the builder or main/general contractor has made a complaint, this will normally be considered recognition through conclusive conduct.

In a relatively recent judgment of the Supreme Court of 12 January 2023, the extent to which such recognition can be understood is problematic.

In that case, contractor had tried in vain to remediate problems with water-borne heat. The remediation attempts focused on something that later turned out not to be the problem. After the limitation period had expired, it was revealed that the cause of the problems was entirely different, and that the remediation of this would be substantially more extensive. A claim for compensation was therefore made. The Supreme Court concluded — after an overall assessment — that it cannot be inferred that even if a contractor tries to remedy in some way, it also implies an acknowledgement of any kind of liability for defects. Therefore, the limitation period for any kind of defect liability was not considered interrupted by recognition (in the form of conclusive conduct).

We have commented on the ruling under “Recent Case Law”, read here.

For both builders and contractors, it is therefore important to observe the limitation period when you have defects that take time to correct.

Obsolescence and complaints

Kortversjonen

1. Introduction

The topic of this article is the obsolescence of claims.

Within construction law, two types of claims are in particular at issue, namely the obsolescence of monetary claims and the obsolescence of deficiency claims.

The title also includes “complaint”. We will not spend a lot of space on complaint rules since these are processed in connection with the individual standard contracts. For the parent contracts you will find the article on complaints here. The point of this article is to point out that obsolescence and warranty claims are two different sets of rules, and both need to be taken into account. It is primarily through shortcomings that we see that one treads wrong here.

2. Briefly about the complaint rules

If there is a defect, you must complain to the person responsible.

A complaint must be made “within a reasonable time” after that man “have or should have discovered” the shortage.

In contract situations where NS contracts are used or where the Bust Registration Act applies, the absolute deadline for advertising is five years after the takeover.

Exceptions to this apply where the defect is due to gross negligence or intent.

What is “reasonable time” to advertise after you “have or should have discovered” will be able to vary.

In consumer affairs, “reasonable time” be several months, whereas in contractual relationships between professionals (where an NS contract has been used), the deadline for advertising will be only a few weeks.

Regardless of whether you advertise within a “reasonable time” as a consumer or professional, you can advertise for up to five years from the takeover.

3. About complaints and obsolescence

From experience, we see many people mixing up the rules on obsolescence and complaints.

Many people believe that as long as one has made a claim, the rights are safeguarded, and do not think that claims become obsolete after a certain time.

However, the rules on limitation and the rules on complaints are two completely different sets of rules, and these must not be confused.

This is a serious misconception that can lead to large losses of value because legitimate claims for defect rectification, price reduction and/ or replacement are obsolete.

Therefore, it is crucial to understand the difference.

In short, the absolute deadline for complaints in the various standard contracts is five years from the takeover. The same is true in matters governed by the bustad entry law.

On the other hand, the general limitation period for e.g. deficiency claims is only three years, cf. Section 3 no. 2 of the Statute of Limitations. That means defects that are advertised more than three years after a takeover are obsolete. This is the starting point. However, in the statute of limitations (section 10 no. 1) there is a provision for an additional period of one year counted from the time one discovered, or should have discovered, a hidden defect or defect. The consequences, and how to deal with such situations, we will come back to.

Even if you advertise on time, claims may be obsolete.

In other words, it is not sufficient to advertise, for example, the takeover or during the first three years after the takeover in order to avoid obsolescence. You have to follow up with whoever you think is responsible for a deficiency.

If you have advertised, time passes and nothing happens, you risk that the requirements you had will become obsolete. It does not help if you are in a dialogue with the person responsible for the shortage. The limitation period is interrupted only in strictly defined, legally regulated ways.

We therefore move on to dealing with the statute of limitations.

4. About obsolescence

4.1 Introductory comment

As mentioned in paragraph 1, in particular in two situations, the statute of limitations presents particular challenges in construction and construction contracts. Firstly, the statute of limitations is of particular relevance in connection with deficiencies. Secondly, they are important to keep in mind when it comes to non-payment of contractor invoices, and especially for invoices sent during the construction period.

We treat the two situations separately.

4.2 Expiration of Deficiency Liability

As mentioned in paragraph 3, the limitation period for defects begins to run from the time of the takeover transaction, cf. statute on limitation of 18.5.1979 no. 18, section 3 no. 2.

It is only at the time of the takeover that the contracting authority is entitled to obtain the flawless “good”, and each defect thus represents a breach of contract.

This means that a deficiency invoked on the takeover business itself becomes obsolete on the day three years after the takeover, unless care has been taken to cancel the statute of limitations.

We deal with timeout breaks in section 4.4 below.

What then about hidden flaws and shortcomings that are not discovered at the time of the takeover, but at a later date?

As mentioned, advertising is available for a period of five years from the takeover, and from experience most hidden errors and shortcomings are discovered during the first year.

The starting point is that claims for such deficiencies are obsolete three years counted from the takeover.

As mentioned in paragraph 3, Section 10 (1) of the statute of limitations contains a separate additional period of one year, which can be applied in case of hidden errors and defects.

It follows from this provision that an additional period of one year is granted to cancel the limitation period provided that one has been unaware of the deficiency (“lacked the necessary knowledge”). The deadline of one year starts to run on the day one “got or should have acquired” knowledge of the deficiency (which in that case we would call a hidden deficiency.

The provision's “should have procured” option might be a bit murky.

Often it is the case that defects can be complicated to uncover. Many times you need the assistance of experts, and it can take some time before the situation is clarified.

Regarding the complaint rules, one should — as soon as one suspects that something is, or may be, a defect — submit a neutral complaint even if further investigation is required.

As mentioned, the additional period of one year begins to run when “got or should have acquired” enough information to understand that there was a hidden error or defect. It is conceivable that the courts will accept that the time only existed when a report was received from an expert — provided that one did not hesitate unnecessarily to obtain one. However, we would advise anyone to justify themselves that the deadline is at the time when one understands that something may be thought to be wrong, and one should understand that an expert should be obtained. In other words, at the time one sent, or should have sent, a neutral complaint.

Since there can be many shortcomings in larger projects, one should have a system in which everything is logged, and in this regard also the deadlines that must be taken care of in order not to risk the requirements becoming obsolete.

We will try to illustrate what we have written with an example.

A contract subject is transferred/-delivered on 1.1.2021.

It follows from the Standard Contracts and the Bust Registration Act, respectively, that the absolute deadline for complaints expires on 1 January 2026.

The ordinary limitation period also begins to run on 1.1.2021, but as mentioned, it expires after three years, i.e. 1.1.2024.

If a hidden defect is discovered on 1 January 2023, the remaining part of the ordinary limitation period will be one year (it expires on 1 January 2024).

In such a situation, the additional deadline of one year will not be helped, since it also expires on 1.1.2024.

The additional deadline of one year is only granted when deficiencies are discovered, or should have been discovered, on or after 2 January 2023. A claim resulting from defects discovered as of 2.1.2023 is successively deprecated one year after they were, or should have been, discovered.

Therefore, if a defect is detected, for example, on June 1, 2025 and complains as it should, the remaining part of the complaint period will be 6 months while the claim is deprecated no later than June 1, 2026.

The additional period of one year is also beneficial when the absolute deadline for complaints of five years has expired and serious hidden errors and deficiencies are discovered. If it can be assumed that such serious hidden errors and deficiencies are due to gross negligence or intent, the deadline for complaint does not apply, but one must nevertheless adhere to the statute of limitations.

4.3 Obsolescence of monetary claims

For monetary claims, the rule of these is that they become obsolete three years after the person was entitled to due payment, cf. Section 3 (1) of the Statute of Limitations.

For a contractor who submits invoices during the construction period, and final invoice in connection with the final settlement, it is not difficult to determine when the limitation period begins to run.

Many have previously dealt with the final settlement and the final invoice, possibly the time of the takeover, in terms of the time of the start of the limitation period.

On 12 November 2013, the Supreme Court handed down a judgment (Rt 2013 p. 1476) in which precisely the timing of the limitation period was the subject of the dispute. This was a construction contract regulated by NS 8405, but the central provisions concerned invoicing which are identical in the various standard contracts and therefore essential to all.

The Supreme Court came to the conclusion that NS 8405 paragraph 28.1, which gives the contractor the right to demand installment payment during the performance of the work, implies that the limitation period under section 3 paragraph 1 of the statute of limitations begins to run as the contractor can claim payment for the work performed. The exact time of commencement of the deadline must be adjusted for the provision in the second paragraph of paragraph 28.1 that installment invoice may not be sent more often than once a month.

The starting point must then be that the limitation period for installment notes begins to run at the due date of each individual invoice, cf. Section 3 (1) of the Limitation Act, which states that “the limitation period shall be counted from the date on which the claimant is entitled at the earliest to claim fulfilment”.

The same must apply to other types of invoices sent during a construction phase, such as invoices relating to additional works. For such works, the starting point in the standard is that you cannot send an invoice until the relevant additional works are “finalized”, cf. NS 8405 paragraph 28.2, first paragraph.

However, the standard allows for invoicing to take place on the way if the works are “of longer duration”.

The starting point should therefore be that the limitation period for any invoice - regardless of the type of work - begins to run at maturity.

Since the Supreme Court states so clearly that the limitation period begins to run as payment can be claimed, a contractor should not be reluctant to send an invoice whenever he has the opportunity to do so. In addition, he should provide a good system for following up on the statute of limitations (in addition to his regular leek routines).

4.4 Cancellation of limitation periods

In practice, there are two forms of deadline interruption that are applicable in contract matters.

Either the limitation period is terminated by the responsible party acknowledging the deficiency and the liability for deficiency, cf. Section 14 of the Limitation Act, or legal action is taken by filing a settlement complaint, subpoena to the district court or initiating arbitration proceedings where this has been agreed, cf. Section 15 of the Limitation Act.

Often it is not desirable to take legal action to cancel the limitation period. If the person considered responsible also does not acknowledge their responsibility, a middle way may be for the parties to agree to extend the limitation period. This is often done when more time is needed to work out causal and possible liability circumstances.

The fact that the limitation period can be extended by agreement opens up Section 28 of the statute of limitations. The deadline cannot be extended by more than three years at a time, but not for claims that are already obsolete.

5. Judgment of the Supreme Court of 12.1.2023 (HR-2023-00093-A)

In our articles on agreements, we have written, among other things, an article about the fact that agreements can be concluded through what is called conclusive behavior, read here.

Thus, a recognition within the meaning of section 14 of the statute of limitations can also be made by conclusive conduct.

If a (sub-) contractor initiates remediation work after the builder or main/general contractor has made a complaint, this will normally be considered recognition through conclusive conduct.

In a relatively recent judgment of the Supreme Court of 12 January 2023, the extent to which such recognition can be understood is problematic.

In that case, contractor had tried in vain to remediate problems with water-borne heat. The remediation attempts focused on something that later turned out not to be the problem. After the limitation period had expired, it was revealed that the cause of the problems was entirely different, and that the remediation of this would be substantially more extensive. A claim for compensation was therefore made. The Supreme Court concluded — after an overall assessment — that it cannot be inferred that even if a contractor tries to remedy in some way, it also implies an acknowledgement of any kind of liability for defects. Therefore, the limitation period for any kind of defect liability was not considered interrupted by recognition (in the form of conclusive conduct).

We have commented on the ruling under “Recent Case Law”, read here.

For both builders and contractors, it is therefore important to observe the limitation period when you have defects that take time to correct.

Abonner og få tilgang til hele artikkelen og mye mer!

Månedlig betaling
Årlig betaling
Spar opp til 40% ved årlig betaling

Kunnskapsbank

kr 990,– / mnd
Trekkes hver måned
Kom i gang
  • Tilgang til alle artikler
  • Tilgang til nye artikler som publiseres
  • Vederlagsfri konsultasjon inntil 5 timer pr år

E-kurs

kr 490,– / mnd
Trekkes årlig
Kun tilgjengelig som årlig abonnement
  • Tilgang til alle e-kurs
  • Tilgang til nye e-læringsmoduler som publiseres

Kunnskapsbank + E-kurs

kr 790,– / mnd
Trekkes årlig
Kun tilgjengelig som årlig abonnement
  • Tilgang til alle artikler
  • Tilgang til nye artikler som publiseres
  • Vederlagsfri konsultasjon inntil 5 timer pr år
Spar opp til 40% ved årlig betaling

Kunnskapsbank

kr 590,– / mnd
Trekkes årlig
Kom i gang
  • Tilgang til alle artikler
  • Tilgang til nye artikler som publiseres
  • Vederlagsfri konsultasjon inntil 5 timer pr år

E-kurs

kr 490,– / mnd
Trekkes årlig
Kom i gang
  • Tilgang til alle e-kurs
  • Tilgang til nye e-læringsmoduler som publiseres

Kunnskapsbank + E-kurs

kr 790,– / mnd
Trekkes årlig
Kom i gang
Beste tilbud
  • Tilgang til alle artikler
  • Tilgang til alle e-kurs
  • Tilgang til alt nytt innhold som publiseres.
  • Vederlagsfri konsultasjon inntil 5 timer pr år
Les abonnementsvilkår

Abonner og få tilgang til hele artikkelen og mye mer!

Månedlig betaling
Årlig betaling
Spar opp til 40% ved årlig betaling

Kunnskapsbank

kr 990,– / mnd
Trekkes hver måned
Kom i gang
  • Tilgang til alle artikler
  • Tilgang til nye artikler som publiseres
  • Vederlagsfri konsultasjon inntil 5 timer pr år

E-kurs

kr 490,– / mnd
Trekkes årlig
Kun tilgjengelig som årlig abonnement
  • Tilgang til alle e-kurs
  • Tilgang til nye e-læringsmoduler som publiseres

Kunnskapsbank + E-kurs

kr 790,– / mnd
Trekkes årlig
Kun tilgjengelig som årlig abonnement
  • Tilgang til alle artikler
  • Tilgang til nye artikler som publiseres
  • Vederlagsfri konsultasjon inntil 5 timer pr år
Spar opp til 40% ved årlig betaling

Kunnskapsbank

kr 590,– / mnd
Trekkes årlig
Kom i gang
  • Tilgang til alle artikler
  • Tilgang til nye artikler som publiseres
  • Vederlagsfri konsultasjon inntil 5 timer pr år

E-kurs

kr 490,– / mnd
Trekkes årlig
Kom i gang
  • Tilgang til alle e-kurs
  • Tilgang til nye e-læringsmoduler som publiseres

Kunnskapsbank + E-kurs

kr 790,– / mnd
Trekkes årlig
Kom i gang
Beste tilbud
  • Tilgang til alle artikler
  • Tilgang til alle e-kurs
  • Tilgang til alt nytt innhold som publiseres.
  • Vederlagsfri konsultasjon inntil 5 timer pr år
Les abonnementsvilkår

Abonner og få tilgang til hele artikkelen og mye mer!

Månedlig betaling
Årlig betaling
Spar opp til 40% ved årlig betaling

E-kurs

kr 490,–
Trekkes årlig
Nåværende plan
  • Tilgang til alle e-kurs
  • Tilgang til nye e-kurs som publiseres

Kunnskapsbank

kr 990,– / mnd
Trekkes hver måned
Legg til
  • Tilgang til 79 artikler
  • Tilgang til nye artikler som publiseres
  • Vederlagsfri konsultasjon inntil 5 timer pr år
Spar opp til 40% ved årlig betaling

E-kurs

kr 490,– / mnd
Trekkes årlig
Nåværende plan
  • Tilgang til alle e-kurs
  • Tilgang til nye e-kurs som publiseres

Kunnskapsbank

kr 300,– / mnd
Trekkes årlig
Legg til
  • Tilgang til alle artikler
  • Tilgang til nye artikler som publiseres
  • Vederlagsfri konsultasjon inntil 5 timer pr år
Les abonnementsvilkår

Har du et tema du ønsker at vi skal skrive om?

Thank you! Your submission has been received!
Det skjedde noe galt. Kontakt oss på hei@byggogprosjektjus.no hvis problemet vedvarer

Har du et tema du ønsker at vi skal skrive om?

Thank you! Your submission has been received!
Det skjedde noe galt. Kontakt oss på hei@byggogprosjektjus.no hvis problemet vedvarer
© 2023 All rights reserved, Bygg- og Projektjus AS
Org No 932 991 888
Website by Ur Solutions