1. Overall
The provisions of the standards are relatively exhaustive and precise in their description of the content of the rules. At the same time, they refer partly to rules in the Purchase Act and partly to other provisions of the standard. In the following we will attempt to collect the threads and illustrate with examples where this is considered appropriate.
Since the standards use two different terms, namely construction products (NS 8411) and products (NS 8412), we choose to use “contract object” as a common term.
2. Rule mirror
3. About the General Deficiency Definition
The general definition of deficiency is given in NS 8411 paragraph 22.1 and NS 8412 paragraph 24.1.
The provisions are essentially equal-sounding, with a small caveat in the case of agreements that include assembly.
First of all, there is a defect if the subject matter of the contract does not correspond to what is agreed.
The standards also refer to the other requirements for the construction products (NS 8411 paragraph 20) and to the products (NS 8412 paragraph 18).
These provisions also contain rules that the subject matter of the contract shall “have the usual good quality and durability” unless otherwise agreed (“General requirements”), the subject matter of the contract shall correspond to the particular purpose of the buyer if this is agreed (“Buyer's Special Purpose”), the subject matter of the contract shall meet guaranteed properties when such are provided by the seller (“Warranties”) and comply with public law requirements (“Requirements in Laws and Regulations”).
We have dealt with these provisions in more detail in the article “Other requirements for the subject matter of the contract” that can be read here.
As a general rule, the buyer has the burden of proving the existence of a defect in the subject matter of the contract. This follows from NS 8411 paragraph 22.1, first paragraph last sentence and NS 8412 paragraph 24.1, second paragraph. This is expressed in the fact that the buyer “must reimburse” its claim that there is a defect in the subject-matter of the contract.
Exceptions to this apply in cases where the seller has provided a warranty of durability. It follows from NS 8411 paragraph 20.2, third paragraph and NS 8412 paragraph 18.2, third paragraph that the seller has the burden of proving that deviations from the warranty during this period are not covered by the warranty.
As we return to in the article on the complaint rules, the absolute deadline for complaints is five years. This means, among other things, that the buyer will have used the contract subject for quite a number of years if a defect claim is made effective in the latter part of this period.
Consequently, it is especially important for the seller that “usually toil and elde” is not to be regarded as a deficiency, cf. NS 8411 paragraph 22.1, second paragraph and NS 8412 paragraph 24.1, third paragraph.
For a purchaser who will enforce a defect claim after, for example, four years during which the contract object has been in use by one or more end-users after its incorporation into a building or facility, it is reasonably clear that it may be difficult to establish that the claimed defect is not the result of “usually toil and elde”. A buyer would therefore be best served by having the seller issue a durability guarantee so that it is the seller who gets the burden of proof.
There is also no deficiency if the claimed circumstance can be reverted to conditions for which the buyer is responsible and/or the risk, cf. NS 8411 paragraph 22.1 third paragraph and NS 8412 paragraph 24.1, fourth paragraph. Both standards mention failure to follow assembly instructions or failed “expected retention, use, operation and maintenance” as examples of such conditions on the part of the buyer.
Since it is not the buyer but the users of the building or facility who will ultimately store, use, operate and maintain the contract object, it is important that the buyer receives all relevant FDV documentation from the seller. Secondly, also pass this documentation on to its contractual counterpart.
NS 8412 paragraph 24.1, third paragraph contains an additional provision if the seller does not answer for “deviations caused by the buyer or circumstances on the part of the buyer, including errors in the buyer's design”.
In this regard, we would like to highlight two issues that we know well from construction law issues.
First, it cited raises an issue related to the scope of buyer engineering. We have already written about this in an article “Superior and on agreed requirements” point 3.2 that can be read here, but still finds reason for a little repetition. As mentioned, there is a difference between detailed design and specification of functional requirements. If the buyer has described only what functions should be fulfilled, and it turns out that the errors can be traced back to the actual detailed design of the seller, it will be the seller who is responsible. It is different if the buyer has a detailed design. We would venture the claim that there is a greater risk of errors in the buyer's design if the buyer has designed in detail than in cases where he has specified only his functional requirements.
Secondly, we would like to point out that the parties can agree that the responsibility and risk of the buyer's design shall be transferred to the seller. Normally it will be the seller who has the best conditions and who knows the relevant field of expertise. The standard contracts do not have their own provisions for such transport, but if the parties find this appropriate, inspiration can be taken, for example, from the provisions on “Agreed risk transition” in NS 8407 paragraph 24.2. We have also written an article about this provision that exists here.
4th. Violation of the seller's obligation to provide information
These rules are found in NS 8411 paragraph 22.2 and NS 8412 paragraph 24.2 and they are identical.
A similar rule can be found in Section 18 of the Purchase Act, but this provision is somewhat more strict towards the seller than that which follows from the provisions of the standards.
Namely, it follows that the standards that the seller must have withheld information about “Substantial conditions” by the subject matter of the contract in order that it may be a defect. Section 18 of the Purchase Act does not establish such a materiality requirement.
What is “substantially” However, you have to consider it concretely.
The provisions further state that the buyer must have had “reason to count on getting” the information that the seller has withheld.
Such an assessment easily becomes quite abstract. If it first turns out that the seller has withheld information about a “significant relationship” as the buyer subsequently makes the case is a deficiency, so at least we think it will take quite good arguments that the buyer nevertheless did not have “reason to count on getting” the information at the latest at the conclusion of the contract.
Finally, we would like to highlight that the condition (s) stated to constitute a deficiency must the purchaser be likely to have “worked in on the deal”. What kind of impact this can have will vary. As examples, mention is made that an agreement would not have been reached, that the buyer would have negotiated the amount of the purchase price or demanded a guarantee of the characteristics or durability of the goods to mitigate it “Substantial conditions” about which the seller withheld information.
5. About things sold “as is”
This provision is found only in NS 8411 paragraph 22.3, and this again refers to Section 19, first paragraph, of the Purchase Act, which exists here.
The starting point is that an item purchased “as it is” does not trigger deficiency claims.
Section 19, first paragraph, of the Purchasing Act therefore governs those situations in which the buyer may nevertheless assert liability for defects.
These exceptions are listed in section 19, first paragraph, letters a — c, and include (a)incorrect information provided by the seller, (b)Retention of information by the seller “Substantial conditions”, as well as that (c)the thing “is in substantially worse condition than the purchaser had reason to expect”.
In the case of options a and b, it is a condition that the incorrect or withheld information must “believed to have influenced the purchase”whereas the materiality assessment in option c shall be based on: “the purchase price and conditions otherwise”.
We will assume that this provision applies primarily to the sale and purchase of used construction products, i.e. in the case of re-use.
6. About the bad faith of buyers, etc.
The provision on buyer's bad faith can be found in NS 8411 paragraph 22.4 and NS 8412 paragraph 24.3
The provisions explain what is meant by bad faith. If, at the time of the contract, the Buyer already knew or needed to know the facts subsequently invoked by the Buyer as the basis for a claim of defect, there is “bad faith”.
The same applies if the buyer has breached his duty of investigation in connection with the conclusion of the contract. In this regard, it is referred to Section 20 of the Purchase Act, which regulates, among other things, the option that the buyer fails to examine the subject matter of the contract despite the seller's urging.
