1. Overall
The provision on the scope of the standards is included in Chapter 1 “General Provisions” and this chapter consists of four main provisions.
2. Rule mirror for item 1 “Scope”
The provision deals with four subtopics as you see in the matrix below. We have written an article for each of the provisions, all of which are under the topic “Chapter 1 “General Provisions”.
3. Agreed use of the standard
In the first paragraph of the provision, the contractual law principle states that the parties must have agreed that the standard (NS 8411 or NS 8412) is to be the basis of the contractual relationship.
How the parties agree on this issue may vary. In the first paragraph, some examples of how this can be done are mentioned.
The most obvious is that the parties enter a reference to the relevant standard in the joint agreement document. It may also happen that the buyer has sent an offer request to potential sellers and in his request written that one wants to buy on the basis of, for example, NS 8411. If the prospective sellers accept this when submitting their offers (where one is later accepted by the buyer) an agreement will be concluded that the relevant standard (NS 8411) governs the parties' agreement.
Another option is that the parties have entered into a long-term cooperation, for example, based on a cooperation agreement, and where new acquisitions are concluded in the form of, for example, calls for proposals. If an interpretation of the cooperation agreement shows that the parties have agreed to base NS 8411 and/ or NS 8412 on the basis of all calls made with reference to the cooperation agreement, then it is these standards that govern rights and obligations.
It also follows that if the parties have failed to refer to NS 8411 or NS 8412, these standards will not govern the parties' agreement. Normally, other terms will then be agreed which are supplemented by the provisions of the Purchase Act to the extent necessary.
Our call is that the industry puts NS 8411 and NS 8412 into service as quickly as possible. There are certainly existing cooperation agreements that must first expire, but basically there is nothing in the way of deciding that NS 8411 and NS 8412 should be adopted if both parties to an existing cooperation agreement agree to this.
Where the parties are not obliged by existing agreements, NS 8411 and NS 8412 should be used in any case. They are balanced so that the interests of each of the parties have been weighed and then looked after in the best possible way.
Standards are what lawyers call “agreed documents” prepared by a broad committee of participants, and in which the entire industry has been represented.
We believe players who adopt these will experience positive attention which in turn will bring commercial benefits.
However, the parties must explicitly agree that NS 8411 and/ or NS 8412 shall be used.
4th. Intended field of use
A main condition for the use of both standards is that the contract object itself should be used in a construction project or at a facility.
By the way, the two standards each have their own scope of application.
NS 8411 shall be used primarily when the subject matter of the contract is “building materials”. “Construction products” refers to what we might call generic goods, which means that there are many of the same type and that are not manufactured specifically for a specific customer.
In NS 8411, paragraph 1.2, a number of examples are mentioned, such as “wood, concrete, insulation products, beams, doors, windows, paint, stain”, but this is not exhaustive. It is clear from the Appendix “with further”.
In addition to typical construction products, it also includes “technical products (...) such as plumbing or electrical products”. As examples of such, we can think of washbasins, toilets, shower cubicles, water heaters, thermostats, dimmers, switches, panel heaters, etc.
In the case of generic products of particular relevance for plants, mention is made of various fractions of crushed stone and gravel, different grades of rebar or sacks of cement, insulation mats, etc.
The main thing is that the building material “to be built into or used on a building or facility”.
As we will return to later, NS 8411 does not contain provisions on the actual incorporation or use of the construction product on the construction site or in the plant. In other words, this part of the job should be done by someone other than the salesperson. The standard also does not provide for, for example, the assembly of what is supplied — although a construction products agreement may also include assembly.
However, there are provisions for mounting in NS 8412 which we consider below.
Finally, it is mentioned that NS 8411 paragraph 22.3 contains a provision on construction products sold “as they are”. Such terms are typically used when the item has been used previously, and then sold for reuse. In such situations, it follows from NS 8411 paragraph 1.2, second paragraph, that the parties should consider adapting the rules of NS 8411 Chapter VI on the characteristics of construction products. In other words, there is nothing in the way of using NS 8411 for the purchase/sale of used construction products, which is a great advantage for the development of the circular economy.
The first paragraph of NS 8412, paragraph 1.2, states that this applies when the subject-matter of the contract is to “manufactured” and implied by the seller. Furthermore, it appears that “the affectation” shall happen “according to the buyer's tasks or wishes”.
In NS 8412 the term is used “the product” on the subject of the contract.
The use of two different designations (construction products and products, respectively) is made to establish a clear distinction and then for educational reasons.
In NS 8412, paragraph 1.2, second paragraph, there is a special provision that this standard is used when the agreement “includes the assembly of the products”.
We deal with most of the special provisions of NS 8412 in a separate thematic collection and it can be found her.
It may be appropriate to clarify that since NS 8411 lacks provisions on assembly where it is included as an integral part of the contract for the purchase of construction products, it would be natural to use the special provisions dealing with assembly in NS 8412 when assembly is included in the purchase of “construction products” under NS 8411.
In our view, it would be a better solution than dropping NS 8411 in favor of NS 8412. Our reasoning is that NS 8412 also contains special provisions governing the relationship between buyer and seller in terms of the manufacturing process itself. Since these rules do not fit in the purchase of generic construction products it is better to use NS 8411 and rather explicitly the agreement is extended to also include the rules on assembly in NS 8412.
Finally, point 1.2 of NS 8411 and NS 8412 makes it clear that these standard terms are not applied if the buyer is a consumer. In such cases, the contractual relationship is regulated by the Law on Consumer Purchases.
5. Relation to other standards
Paragraph 1.3 of NS 8411 and NS 8412 refer substantially to each other.
This means that NS 8411 paragraph 1.3 recommends users to use NS 8412 if it concerns the purchase of products to be manufactured separately, whereas NS 8412 paragraph 1.3 refers to NS 8411 if the agreement applies “building materials”.
In NS 8411 paragraph 1.3 it also states that if the seller shall only do “simple adaptations of building materials for buyer's use” it can still be considered whether NS 8411 is more “appropriate” to use than NS 8412.
In NS 8412 paragraph 1.3, parties are advised to use NS 8411 if the agreement concerns the purchase of construction products that are not to be manufactured.
Above, we recommended that the parties use NS 8411 with the addition that the rules on assembly in NS 8412 apply when the contract concerns construction products in which assembly is included.
The Committee has recommended an opposite solution in NS 8412, paragraph 1.3, by using NS 8412 and removing the special provisions relating to the manufacturing process itself and that “other necessary adjustments may be made”. We think this is a more cumbersome way, but it has to be decided in the specific cases.
In the last paragraph of NS 8412, paragraph 1.3, a delimitation is also drawn against the standards of contract law such as NS 8407 or NS 8417. Namely, it states that users should consider the use of such standards if the works on the construction site “constitutes the predominant part of seller's obligations”.
The practice to date has presumably been that procurements now assumed to be regulated by NS 8412 have been carried out using 8407 (turnkey) or NS 8417 (total subcontracting).
These standards are still relevant even after NS 8412 came into force.
When deciding on the use of NS 8412 versus NS 8407 or NS 8417 there will be many points to consider. We refer to the condition if the delivery takes place as part of “a construction mission” and if “the works on the construction site constitute the predominant part of the seller's obligations”, or not.
We would argue that if it is natural to characterize the delivery as a “construction mission” This would speak strongly for using NS 8407 or NS 8417 anyway.
We consider, for example, that a contract for manufacturing, transporting and then assembling prefabricated hollow wedge elements to a basement floor including all walls, shafts and floor partitions is a “construction mission” although perhaps the most significant part of the seller's obligations (at least value-wise) happens with the seller. However, the importance of the work on the construction site (the assembly) and the execution in terms of quality and time are of great importance for the others involved. Accordingly, at least we would consider that such a contract should be governed by NS 8407 or NS 8417, and not NS 8412. Among other things, the client (buyer) will have a great need to be able to coordinate this seller on an equal footing with the other contractors. The other rights and obligations the parties to a contract have vis-à-vis each other will also be better adapted to such a delivery than a NS 8412 contract.
We believe that it will be different with lift delivery if the lift is essentially finished at a lift supplier, and then assembled within a relatively short period of time on a construction site, and in a very limited area without having a particular impact on the work of other actors. The lift shaft itself will also be fully listed and electricity presumably brought forward by another player. In such a case, it would presumably be more natural to characterize this as a manufacturing purchase including assembly, with the consequence that the contract is governed by NS 8412.
Having said the above, it is not easy to find a reasonable balance between the individual cases and the choice of contract form. The point of the examples is really to show tentatively how closely intertwined the decision on the best form of contract and the specific circumstances of the individual delivery really are.
6. Supplementary rules of the Purchase Act
It is clear from paragraph 1.4 of both standards s that the law of purchase “shall apply as far as it is shown to them” in the individual standards.
In addition, it is expressly stated in paragraph 1.4 that four specific chapters of the Purchase Act apply in full.
With regard to the above, a natural linguistic understanding would suggest that the Purchase Act does not apply unless NS 8411 or NS 8412 explicitly refers to it.
What is quite clear is that several of the provisions of NS 8411 and NS 8412 are more or less direct transcripts of individual provisions of the Purchase Act. Although no reference is made to the relevant provision or provisions of the Purchase Act from which the quotations are derived, in all cases the provision of the Purchase Act applies indirectly in such cases.
What happens if it turns out that NS 8411 or NS 8412 is not precise enough in its regulation of a disputed relationship, but then the purchase law contains a suitable provision to which it is not shown.
What do you do then?
The quotation indicates that the provision in question cannot be taken as a basis since NS 8411 or NS 8412 do not refer to it.
However, we do not believe that this is what is going to happen.
Presumably, the relevant provision of the Purchase Act will be given analogous application. If nothing else, because the rule is considered to represent common practice, it may be considered to conform to the unwritten background law.
With that said, we would like to stress that our opinion is based only on what we believe is most relevant, and that the standards have not yet been in significant use.
