1. Overall
In this article, we describe the rules governing the buyer's right to demand compensation from the seller when there is a defect. We get into the so-called control responsibility, and what conditions must be met in order for the seller to release his responsibility. Control liability does not include indirect losses, and in NS 8411 and NS 8412, compensation for so-called indirect loss presupposes that the seller has acted grossly negligently or contrary to probity or good faith.
2. Rule mirror
3. The general basis of liability
The main rule is that the buyer can claim compensation for the loss suffered by him as a result of the presence of a defect in the construction product or product.
The rules of NS 8411 paragraph 28.1, first paragraph and NS 8412 paragraph 30.1 first paragraph are identical and both refer to Section 40 of the Purchase Act.
Negligence on the part of the seller is not a condition and, accordingly, it is said that the liability is objective.
It is the buyer's financial loss as a result of the defect that can be required replaced. The standards provisions on compensation list several examples of expenses the buyer may incur and which are eligible for compensation. In addition to expenses, however, the seller will also be able to suffer other financial loss. In this regard, a distinction must be made to items of loss which are to be regarded as indirect losses, see paragraph 9 below. In order for the buyer to claim reimbursed losses that are categorized as “indirect” there must be gross negligence on the part of the seller if he has acted contrary to probity and good faith. In other words, indirect losses are not covered by the control liability.
In addition, the Code of Purchase Act X “The extent of the compensation. Rate” for full application, see paragraph 1.4 of the Standard Contracts. In this chapter, one can find, among other things, section 67 of the Purchase Act, where it follows from the first paragraph that “loss” includes, inter alia, “expenses, price difference and lost profits” with the buyer under the condition that the seller “reasonably could have foreseen” this “as a possible consequence of” the shortage.
However, the seller may be exempted from liability if “the seller proves that the defect is due to an obstacle beyond the seller's control”. Accordingly, control liability is used as the legal term for this responsibility.
Control responsibility is also legislated in section 27 (compensation in case of delay) and section 40 (compensation in case of defects).
NS 8411 paragraph 28.1, first paragraph and NS 8412 paragraph 30.1, first paragraph also refer to Section 40 of the Purchase Act.
In order for the seller to be exempted from the control responsibility, four conditions must be met.
First, the deficiency must be due to a “obstacle” And secondly, this one must have been lying “outside the seller's control”.
Thirdly, we must the seller “could not reasonably be expected to have taken” The Obstacle “in consideration at the time of appointment”.
Fourth, the seller must not be reasonably expected to “avoid or overcome the consequences of” the obstacle.
It takes a lot of effort for a seller to escape his control responsibilities.
We have written a good deal about control responsibilities in the article “Cancellation and hardship” point 4.1 that can be read here.
If the seller claims that the defect is due to circumstances beyond his control, it is the seller who has the burden of proof. As can be seen from point 4.1 of the article “Cancellation and hardship” It takes a lot for the seller to win with such a quote.
It is also not sufficient that the deficiency can be refunded to one of the seller's contract assistants, employees or others. In contrast, it is apparent from the second paragraph of the provisions, which provides that exemption from liability for the seller is applicable only if one of them can reasonably believe that the defect is due to a circumstance beyond their control.
The fact that a contract helper becomes insolvent and goes bankrupt is also not a relationship beyond the seller's control.
Finally, section 40 (3) of the Purchase Act is mentioned, where it follows that the seller is in any case liable if the defect is due to error or neglect on his part, or the subject matter of the contract already at the time of the contract deviated from a guarantee that the seller had given.
4th. Assignment Expenditure
It follows from NS 8411 paragraph 28.2 and NS 8412 paragraph 30.2 that the buyer is entitled to reimbursement of expenses incurred by the buyer in order to clarify whether there is a deficiency.
In some cases it is very easy to determine that there is a shortage, and the cost use very low if any at all.
In other cases, the work to ascertain this can be extensive and correspondingly costly.
It may be necessary to open structures, or hire experts to inspect, collect samples for testing in laboratories or prepare reports.
As long as the costs are relevant, reasonable and reasonable for the seller, the buyer will be entitled to have such costs reimbursed.
However, the assumption is that these studies show that there is a shortage.
If the investigations lead to the conclusion that the construction goods or product are under contract, there is no defect and the buyer is therefore not entitled to have his ascertainment expenses reimbursed from the seller.
5. Addition and reassembly expenses
When carrying out remediation work, it will often be necessary to get to rectify what is deficient, and then you have to bring everything back to its original state when the repair is completed.
Such addition and reassembly work may, in the worst case, involve digging up, chopping up masonry or demolishing structures to uncover enough for remediation to be carried out, and then the whole must be returned to its original condition.
The starting point is that the seller should be given the opportunity to carry out these works, cf. NS 8411 paragraph 25.2 and NS 8412 paragraph 27.2, and in that case the seller must pay these costs directly to his assistants. He cannot demand that the buyer pay this.
If the Buyer will have to pay for installation and reassembly, these costs may be required to be reimbursed by the Seller, cf. NS 8411 paragraph 28.3.1, first paragraph and NS 8412 paragraph 30.3.1.
Such costs can be substantial and consequently a limitation of the seller's liability has been introduced, see below.
6. Limited liability for addition and reassembly expenses
It follows from NS 8411 paragraph 28.3.2 and NS 8412 paragraph 30.3.2 that the seller's liability for acquisition and reassembly expenses is limited to the size of the purchase price.
If the contract objects have been delivered to different construction sites, it is specified that it is the proportional share of the purchase price that is the limitation.
7. Damaging characteristics of the subject of the contract
In NS 8411 paragraph 28.4.1 and NS 8412 paragraph 30.4.1 it is established that the seller is not liable for physical damage caused by a defect to the buyer.
Exceptions to this apply if the subject matter of the contract differs from something that the seller has given a guarantee, that there is negligence on the part of the seller or there is a damage to the construction products themselves.
8. Insurance
It follows from the first paragraph of NS 8411 paragraph 28.4.2 and NS 8412 paragraph 30.4.2 that the seller should take out insurance against product liability, and inform the buyer whether this has been done or not.
If the buyer has taken out such insurance, it follows from the second paragraph that in the event of a damage event, the buyer must first make the applicable liability to his insurance company. Then it will be up to that company whether to make a recourse.
It is only in the event that the buyer's insurance company refuses coverage that the buyer can make a claim against the seller or his insurance company.
9. Indirect losses
NS 8411 paragraph 28.5 and NS 8412 paragraph 30.5
What is meant by indirect loss is stated in Section 67 of the Purchase Act which you can read in full here.
Section 67 of the Purchase Act lists four forms of indirect loss, and in key terms these are loss of operations, deprivation, lost profits or losses resulting from damage to other than the construction product or product.
We do not go into further detail, but clarify that the condition for making an effective claim for indirect loss is that the seller, or someone for whom he is responsible, has acted grossly negligently or contrary to probity and good faith.
It should be noted that the case-law imposes very high demands on a claim that a counterparty has behaved grossly negligently or is contrary to fairness and good faith.
10. Claims against previous sales leads
From time to time, a situation may arise where one does not want, or cannot, relate (only) to the seller.
Then you can choose whether you (also) want to relate to previous sales leads such as a wholesaler or a manufacturer. If the seller has had the assistance of others to produce the subject matter of the contract, the buyer may also proceed against such with his claim.
However, as a buyer, one must be aware that claims made against former sales leads or seller's assistants will often be associated with some uncertainty.
Those against whom liability is sought may have limited liability to the seller, and such contractual terms may also apply to the buyer.
Accordingly, there should be weighty reasons before the buyer makes applicable claims against previous sales leads, etc. Nearby examples are that the seller is bankrupt, has initiated debt negotiations or otherwise demonstrated that the seller is unable to fulfill his obligations.
