1. Overall
Chapter VI of the Standard Contracts deals with the characteristics of the construction products or products, respectively, and the provisions of NS 8411 and NS 8412 are substantially similar. Accordingly, we have written about these in two joint articles that exist here.
This article deals with three provisions of NS 8412 Chapter VI “Characteristics of the Products and Duties of the Seller” that are not found in NS 8411, namely the rules of paragraphs 19, 20 and 23.
2. Overview of the rules
3. Agreed requirements
“Agreed requirements” is dealt with in NS 8412 paragraph 19.1.
Paragraph 19.1 (1) establishes the obvious starting point, namely that the product must be manufactured “in accordance with agreed requirements”. This is related to point 18.1 “Agreed requirements” It is also stated that the product “shall meet the requirements arising from the agreement”.
Paragraph 19.1, second paragraph, regulates the situation in which the buyer has “detail described” the finished product, while the third paragraph regulates the situation where the buyer has described only the functional requirements to be fulfilled.
Once the buyer has described in detail what the seller will produce, the buyer will have the risk of any defects in the product that can be returned to the detail design. If the seller has manufactured a product that conforms to the detailed design, there is no defect in the legal sense of purchase. Then the buyer has received what he ordered and may have to pay the seller additional compensation to have the product changed so that it becomes correct according to the buyer's wishes and needs.
Since we have seen in several places that there are great similarities between manufacturing and construction law, it is also natural to do so here. When a buyer designs retail projects, the risk distribution between buyer and seller matches the risk distribution between the builder and the general contractor in execution center contracts.
When the situation is that the buyer describes only the functions to be fulfilled, it is the seller who is given the task of designing a solution in detail. The detailed design must lead to a fulfilment of the functional requirements, and the seller is normally given a freedom of action in terms of how to meet the functional requirements. How much freedom of action the seller actually gets also depends on what other requirements the buyer has made and which are normally stated in the buyer's production basis, cf. NS 8412 paragraph 19.2.
If the product does not meet the buyer's functional requirements when completed, there will be a defect for which the seller is responsible. In this case, whether the defect is due to the seller's detailed design or execution will not matter to the buyer, and the assessment is objective. The employee's functional requirements are met and then the contract is fulfilled, or they are not fulfilled and then there is a deficiency. The seller is not required to have acted negligently in any way.
In comparison with contract forms under contract law, it is natural to characterize this variant of a manufacturing purchase with turnkey contracts where the general contractor has the risk that the builder's functional description and requirements are met.
It is important to note the last part of NS 8412 paragraph 19.1, third paragraph. It is stated that the seller is nevertheless not responsible for defects if it turns out that there is “incorrect indication of dimensioning forces” and on which the seller's choice has been based.
We cannot see it being said explicitly, but the assumption must be that the defects exist in the project basis that the buyer has handed over to the seller.
In our view, the buyer must have the risk of all defects evidenced by his production basis.
Moreover, it follows from NS 8412 paragraph 19.1, last paragraph that the buyer has the risk of errors that can be reverted to incorrect information provided by public authorities.
This corresponds to the risk allocation we find in the contract law, cf. NS 8407 paragraph 23.2, second paragraph cf. 23.1, last paragraph.
4th. Basis of production
The rules on the basis of production can be found in NS 8412 paragraph 19.2.
By production basis we mean the same as design in construction law, i.e. sketches, drawings, descriptions, etc.
Paragraph 19.2, first paragraph regulates the buyer's obligation to act if the seller needs “additional supporting material from the purchaser”.
In this case, the seller must notify the buyer of what he needs, and then the buyer must send the material “as soon as possible”. Presumably, this joint is most convenient in those situations where the buyer detail projects, but not exclusively. Deadline “as soon as possible” is presumably dependent on what it is seller misses or calls for, and how laborious it becomes to fulfill.
The consequence of the buyer spending time obtaining what is requested is that the seller can notify a request for an extension of the deadline, cf. the provisions of NS 8412 paragraph 11.4. The article on this topic exists here.
In paragraph 19.2, second paragraph, the seller is required to submit the production base to the buyer for inspection before the commencement of production.
In this regard, the buyer shall be given a “reasonable deadline” to control.
What kind of control and what legal effects it will have if the buyer approves drawings that later turn out to contain errors will probably depend on the degree of detailed design on the part of the buyer.
We can start from paragraph 19.2, fourth paragraph, where it is stated that the buyer's control does not include “seller's choice of solutions for the fulfillment of functional requirements”.
Paragraph 19.2, third paragraph governs the consequences of the failure of the buyer's control to reveal “errors that should have been detected by a regular diligent review of the material”.
In such cases, the buyer shall “bear part of the extra cost of not being notified”.
Although it is not expressly stated, this must apply in cases where the seller has designed details on the basis of the buyer's functional requirements.
It follows that in 19.1, second paragraph, the buyer has the risk of his own detailed design.
When the seller has detailed design, the buyer has checked and it nevertheless turns out to be errors that the buyer should have discovered in his control, then the rule is that the buyer must bear part of the additional costs of repairing the product.
Note that the assessment is based on what “regular due diligence review of the material” would have given off answers.
This is a legal way of formulating oneself.
One does not ask what the specific buyer should have discovered, but what a normally sensible player in the relevant area of life should have discovered. In other words, the court assumes a normative consideration.
5. Checking at the seller
It follows from NS 8412 paragraph 20 that the buyer has the right to control the seller's manufacture of the product — with the seller or, perhaps more precisely, where the product is manufactured.
This control does not exempt “seller from delivering the products in contractual condition”, cf. NS 8412, paragraph 20, third paragraph.
This provision has its parallel in the standard contracts in construction law, which establish that the builder has a corresponding right to control the contractor's works, cf. NS 8405 paragraph 14 and NS 8407 paragraph 20.2. And in the same way as in NS 8412 paragraph 20, third paragraph, contractors cannot invoke the builder's control as a reason for exemption from defects or defects.
It is incumbent on the Buyer to notify the Seller before any checks are carried out to ensure that: “the control can be carried out in a prudent manner”, cf NS 8412 paragraph 20, second paragraph.
In conclusion, it is noted that defects detected under the control of the builder should be as a starting point by the seller, and at his expense and risk, cf. NS 8412 paragraph 20, last paragraph.
