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Chapter 26 of Kai Krüger, Norsk kjøpsrett [Norwegian Sales Law], Bergen (Alma Mater) 4th ed. 1999. Reproduced with the permission of Prof. Krüger.

Fra Kai Krüger: Norsk kjøpsrett 4 utg 1999
Alma Mater Forlag / Fagbokforlaget 1999
© Kai Krüger og forlaget

§ 26. International sales under present Norwegian Law

§ 26.1. Introductory remarks. The CISG 1980- SGA 1988 («kjl») transposition disaster. Interlegal scenarios under CISG 1980 Part II / 1955 Hague Convention

§ 26.2. CISG Part II and Nordic formation principles, such as 1918 Formation Act Chap 1, compared

§ 26.3. Agents, importers and local representatives under Norwegian law. UNIDROIT 1983 Convention on Commercial Agents.

§ 26.4. Some interrelated SGA 1988 / CISG 1980 scope issues

§ 26.5. Observation on subjective features - CISG 1980 Art 94 (1)

§ 26.6. Further inter-legal issues in international sales under Norwegian law - EEA aspects

§ 26.7. Remarks on the Scandinavian «soft law» «generalklausul» authorising judicial «reasonableness test» (Formation of Contracts 1918 Act amendment 1983 - § 36)

§ 26.8 Survey over some select CISG 1980 issues and the corresponding rules in the 1988 SGA.

§ 26.9. EEC Procurement Directives and Norwegian law on public contracts - tender bidding.

§ 26.10. Interlegal issues: Proper venue and jurisdiction, choice of law. Recognition of judgements and arbitration awards.

§ 26.11. ICC impact on international sales. INCOTERMS 1990, 1993 UCP 500 etc. 

§ 26.12. A side-step for resident non-Norwegian consumers: Norwegian consumer purchase law - basic elements 71

Concordance: Provisions of CISG 1980 transposed to Norwegian Sale of Goods Act [SGA] (kjl) 1998-05-13 No 26

This chapter is written in English in order to clarify certain but not all current issues in Norwegian sales law as codified under 1980 UN Convention on Contracts for the International Sale of Goods (1990-04-11) (abbr infra «CISG 1980») with respect to non-Scandinavian readers. References to literature will be marked with «SC» if the reference is to writings in one of the Scandinavian languages, otherwise «ENG» when the material is in the English language.

NON-SCANDINAVIAN READERS WITH NEED TO BASIC INFORMATION ON CONSUMER’S RIGHTS WHEN PURCHASE IS DONE IN NORWAY, SHOULD MOVE DIRECTLY TO THE SECTION § 26.12. INFRA.

§ 26.1. Introductory remarks. The CISG 1980- SGA 1988 («kjl») transposition disaster. Interlegal scenarios under CISG 1980 Part II / 1955 Hague Convention

While the rest of this book is for Norwegian readers, this final chapter has a three-fold purpose. (1) It addresses itself to possible Anglo-American readers with a need to know about the basic rules and principles governing international sale transactions under the combined CISG 1980 and Norwegian law regime. (2) Secondly, it is aimed at Scandinavian readers with a need to appreciate recent developments within the area of international sale of goods law.[1] (3) Thirdly, it is meant to provide some «first aid» information on Norwegian consumer law to residents without or with modest knowledge of a Scandinavian language (infra § 26.12.).

Since sales of goods law has been - and to a certain limited extent still is - common in the Nordic countries, the cases decided by a supreme court in one state will have a certain relevant bearing on the arguing of similar cases in another Nordic country (although it seems clear that only Supreme Court decisions are binding in a legal sense under Norwegian law). Norw Supreme Court («Norges Høyesterett») cases are reported in Norsk Retstidende (abbr Rt.), Swedish equivalent Svenska Högsta Domstolen cases are reported in Nyt Juridisk Arkiv I (abbr NJA), Danish Højesteret is reported in Ugeskrift for Retsvæsen (abbr UfR). These will apply even to contracts otherwise subject to the 1988 SGA (provided of course that the dispute falls under the law of the land in question). Finnish Official Reports on Finska Högsta Domstolen (FiHD) are in either the Finish or in the Swedish language, but selected decisions of particular interests are reported along with Icelandic (in Danish) (and other Nordic) Supreme Court jurisprudence in the inter-Scandinavian law report Nordisk Domssamling (NDs) (Universitetsforlaget). Maritime and offshore industry cases and arbitration awards from all the Scandinavian countries are reported in Nordiske Domme i Sjøfartsanliggender (ND), including Supreme Court cases from the Scandinavian countries, district and appellate court cases as well as arbitration awards within the maritime area published with the consent of the litigants. This books contains a great many references to such case material, as it is thought useful to compare domestic decisions with decisions in other Scandinavian countries.

The legal crank shaft within the machinery for international export and import trade is the 1980 UN Convention on Contracts for the International Sale of Goods, adopted in Vienna April 11th 1980 («CIGS 1980»). The Convention came into force in 1988 and has been signed by 55 states (by July 1998).[2] Since 1988, Norway has been a party to the Convention, as are the other Scandinavian countries. Norway is also a party to the 1955 Hague Convention 1955-06-15 on Law applicable to International Sales of Moveable Corporal, directing the dispute to the seller’s land where the parties’ contract does not provide otherwise (Art 3).[3] The two international regimes must be seen in conjunction to get a clear picture of the practical impact of the international rules and principles in the area. The EU/EEA profile within the sales of goods area restricts itself to consumer protection, public procurement («supplies») and fragmented directives on particular issues, such as commercial agents.[4]

What is Norway’s position in the CISG 1980 area?[5]

Norway passed a separate Act 1988-05-13 No 28 on the ratification of the Convention, but the Convention is not by itself made law, although it may seem so; it appears in the official «Norges Lover»[6] as an appendix to the general 1988 Norwegian Sales of Goods statute to be discussed infra.[7]

The relevant Act is titled «Lov om kjøp» (literally «Act on Purchase») dated 1988-05-13 No 26, in force from 1989-01-01 and applicable to contracts concluded after that date (§ 99). For sake of simplicity, the 1988 act will be abbreviated «SGA 1988» infra, allowing for convenience the replacement of the official title with CISG-inspired concept Sale of Goods.

There are no administrative decrees or regulations under the 1988 Act.

In order to appreciate the observations to be made in this chapter, one should observe that Norway is traditionally a «dualistic» country, transposing conventions like the one in focus into domestic statutory law by way of separate «statutory» legislation, not only translating, but adapting and adjusting by amendments etc international texts according to national legislative tradition.[8] This has been particularly apparent in the maritime and transport area of law, but can also be observed in other areas of law, such as in the overall EEA[9] implementation of EU law (although with greater obedience here than in other areas of law). The «transformation» method was also implemented in the particular case of CISG 1980 (contrary to the procedure other Scandinavian countries, where CISG was made law by incorporation).[10]

The question of selecting the appropriate actual legal vehicle for the incorporation of the CISG 1980 Convention turned out to be controversial under the Nordic preparatory work. The issue was tabled already in the 1984 inter-Nordic report («NU 1984:5»)[11] on (a) how to import the 1980 regime and (b) whether to use the CISG 1980 provisions as the basis for a common Nordic law reform replacing an act which had been effective in all Nordic countries since the turn of the century.[12] However, it turned out that this assumption was far to optimistic. The Swedish, Danish and Finnish joint position was that the CISG 1980 should be implemented by way of a general short «blankettlov», only stating that the text of the convention was formally enacted as statute as such, while the Norwegian sole position was that the traditional method of «transformation» advocated since 1972 should be adopted by way of preparing a «consolidated act», including and integrating provisions which in conjunction with domestic rules were meant to reflect the Convention. This was actually done, joining the majority of hearing opinions expressed during the preparation of the draft, cf ministerial annotated draft on the parliamentary proposal in Ot prp nr 80 (1987-88) pp 16-19, arguing that this would prove the easiest way to acquaint Norwegian export industry to the complicated rules of the Convention. Consequently, the CISG 1980 regime was never by itself made part of Norwegian law. The fact that non-resident contract parties not familiar with Norwegian language nor with the internal structure of the Act-to-be was not addressed or commented in the parliamentary proposal.

Denmark, Finland and Sweden, on the other hand, have incorporated the CISG 1980 rules by short statutes giving the text of the convention legal effect within its own scope (SC «blankettmetoden»).[13] Thus, in these countries, there is a clear formal distinction between sales governed by the CISG 1980.

The intention was to replace the outdated Sales of Goods Act from 1905-07 with a modern, but still uniform Act of sales of goods, thus to preserve and prolong long term joint legislative co-operation between the Nordic countries (previous acts 1916 on Agency, 1918 on Formation of contracts, 1930 and 1989 Insurance, from 1893 on and latest 1994 Maritime law). This failed. Denmark preferred to continue under the 1906 Nordic Act and is still adhering to it, except for a range of 1979 consumer protective provisions included in the Danish 1906 Act from § 72 on to the final § 86. The rest of the Nordic countries completed the 1984 project by law reforms, in Finland Act 1987-03-27 No 355, in Norway Act 1988-05-13 No 26, in Sweden with the Act identified as 1990:932. The Finnish/Swedish/Norwegian Acts are often referred to as the Nordic Act on Sales of Goods, but as shown, this is not quite accurate.

The Norwegian concept included the idea of having one encompassing Uniform Act for all sales, both international, national commercial - including consumer purchases. This was done by stating in one of the introductory provisions that the Act has mandatory supremacy in private consumer matters, ruling out contradictory individual agreements,[14] written or oral ad hoc contracts, standard forms or single clauses within the scope of the Act. The mandatory supremacy is only excepted when expressly stated otherwise in the statutory provisions themselves, such as is the case in kjl §§ 11 (2), 22 (2), 30 (2), 41 (4), 79 on different issues.[15] Finland and Sweden, on the other hand, have operated formal distinctions between provisions on consumer sales and commercial sale transactions. Since the major consumer law reforms in the 1970’ies there is tradition in these two countries for legislating consumer issues en separate statutes (SC «konsumentskydd») for the sake of clarity and simplicity.

The method applied in Norway can be seen in the overall observing of the structure of the Act. The SGA 1988 contains three categories of rules on the matter of international sales.

(1) The main rule is that failing specific exceptions, any provision will cover both national and CISG 1980 sales.[16] The majority of the rules are made applicable to international sales as far as such matters are not provided for specifically in Chap XV - or made subject to specific exceptions as mentioned under (2). The assumption and pretension is that the rest of the act, with necessary adjustments in Chap XV, will be in accordance with 1980 CISG.[17]

(2) The rules set out in the final part of SGA 1988 as Chap XV (§§ 87-99) and these 12 provisions deal specifically and exclusively with international sale contracts and were thought necessary and sufficient to provide for rules in matters where the rest of the 1988 Act might not meet the CISG 1980 requirements.

The provisions are:

Important rules on how to interpret the internationally relevant provisions of the statute and in the interpretation of contracts in this area are set out in §§ 88 and 89. In other words: One and the same provision of the SGA 1988 may have to be interpreted in one way applying tradition Norwegian legal method and in a different way when that provision is to be applied to an international sales transaction. No doubt, the potential for confusion and misunderstanding is overwhelming: A potential Supreme Court decision on the international «side» of the Act may logically differ from the interpretation of the exact same words when the identical provision is to be applied domestically.[18]

(3) Finally, the 1988 Act makes 6 specific exceptions within the provisions otherwise common for national and international sales, stating that provisions otherwise applicable shall not apply to international sales.[19] They deal with issues such as scope provisions departing from the wording of the Convention (§ 5 (3)), on conditions for the repudiation of the contract in delayed delivery situations (§ 26), the otherwise adopted distinction between «direct» and «indirect damage» (§ 27 (4), the post-delivery repudiation of the contract on part of the seller (§ 54 (4)), the rule on enrichment compensation in the repudiation of the contract (§ 66 (2)), and finally the foresee ability condition for the award of damages and the restricted use of court’s discretion in ad hoc mitigating the amount of damage to be paid (§ 70 (3)).

These exceptions are made in order to prevent violation of the 1980 Convention regime. It is, however, somewhat confusing that these provisions are set out separately from the rest of the provisions governing the international sales in Chap XV.

The dualistic method thus applied means that the interpretation of the SGA 1988 in international matters subject to Norwegian law includes not only the elements made relevant in the CISG 1980 itself by Art 7, as provided for in 1988 SGA § 88, but also the exact wording of the Norwegian Act and the comments in the preparatory works (alas - in Norwegian), since these are traditionally as relevant here as in any other Norwegian statutory interpretation.

The relevant passages dealing with international sales in the preparatory works are found in NU 1984:5 pp 150-53, 157-58, 165-66, 388 et seq (cf also English summary in general pp 35-43), in Ot prp nr 80 (1987-88) pp 16-19, 145, and in Innst O nr 51 (1987-88) pp 2-3, 19. Detailed comments on the provisions in the Convention with respect to Norwegian implementation are found in Bergem-Rognlien Kjøpsloven. Kommentarutgave (2nd ed 1995) pp 439 et seq (also on the Part II which was not imported into Norwegian law). (SC)

Note, however, that the inter-Nordic report NU 1984:5 has a summary in English (pp 35 et seq), explaining the consideration made in the group, but prior to the national preparation of the drafts for actual legislation, which in many cases differed from the 1984 report.

Stein Rognlien chaired the Norwegian delegation during the diplomatic finalising of the Convention and was also head of the legal department of the Ministry of Justice (Justisdepartementets lovavdeling). John Egil Bergem participated at that time in the drafting of the bill which substantially was adopted by Norwegian Parliament in 1988. He is now a district judge.

In this author’s opinion, the method for adaptation of the CISG 1980 into Norwegian law was a major mistake.[20] One simply tried to do something which can not be done properly. Firstly, the reading of the Act is a very complicated task, surfing over almost 100 provisions in order to find out what really is the Norwegian «dualistic» version of CISG 1980. Secondly, the method has resulted in blatant discrepancies in the wording of statutory sales of goods law, supported by Norwegian legislator’s comments which raise the question of method: When has the legislator intentionally departed from the CISG 1980 so that «dualism» would direct the courts to apply the national version[21] - and when is there a plain mistake, where one could safeguard CISG 1980 unity by presuming that the CISG 1980 rule itself is to be applied?[22]

This all means that the law on certain issues departs either intentionally or by mistake from what it should have been under the CISG 1980 regime. Thirdly, the traditional inter-Nordic common approach to sales of goods law, originating in the beginning of the 20th century, was broken within the CISG 1980 area. The Norwegian version of the law on international sales of goods is since 1988 no longer even part of Scandinavian law, but has been made exclusively Norwegian national law. The effect of this mischief is augmented by the interlegal «IP» choice of law effect of the 1955 Hague Convention 1955-06-15 on Law applicable to International Sales of Moveable Corporal Objects (translated from the French authentic language) as expressed in a 1964 Norwegian statute (1964-04-03 No 1).[23] This rules direct disputes to be solved under law of the seller’s land (Art 3) when the contract does not rule otherwise.[24] In certain issues, the seller is actually placed in a less favourable position compared to the CISG 1980 rule, which surely could not have been the intention of the Norwegian Parliament.[25] The EC 1980 Rome Convention on the Law applicable to Contractual obligations was not made part of the EEA Agreement and is not effective in Norwegian law.

In spite of the virtual legal «mine field» laid out by the legislator, the Norwegian courts will hopefully not find many discrepancies between the wording of the 1980 Convention and the 1988 Act, pressing delicate supremacy issues in these matters. There are so far to this author’s knowledge yet no Norwegian published judgements in disputes over a CISG 1980 regulated issue.[26]

§ 26.2. CISG Part II and Nordic formation principles, such as 1918 Formation Act Chap 1, compared

CISG 1980 Part II (Arts 14-24) deals with formation of contract issues.[27]

The option under CISG 1980 Art 92 (1), cf Art 101 (1), has been availed of by all the Nordic Countries, so that the whole of Part II of the Convention on the formation of contract issues is not made into neither Norwegian, nor Swedish. Danish or Finnish law. The adoption of CISG 1980 Part II would have necessitated major changes in substantive Scandinavian law as stated under the 1918 Act.[28] The Nordic law on formation of contracts is basically case-made law, although an old 1918 Scandinavian statute (1918-05-31 No 4) deals with some issues on the consecutive exchange of offer and acceptance constituting a contract (Chap 1 of the Act).[29]

The advisable effect of the 1955 Hague Convention is that a dispute over whether there is a binding contract under an otherwise CISG 1980 scope sale should be solved under the law of the potential («disputed») seller’s land. The principle stated in the Convention Art 2 3rd para does not provide the exact answer to this; the provision deals with a different problem: The disputed agreement referred to in Art 2 1st para (on whether or not there is an agreement on the choice of law issue). Extending this principle seems to be the better solution, and is advocated by writers.[30] In that case, a Norwegian importer or buying entity might experience that the contract in dispute is to be solved under another CISG 1980 country which has signed CISG 1980 including Part II.[31]

In Nordic law on formation of contracts, it is fundamental that parties exercise complete pre-contractual autonomy on which rules to «play by». This principle is stated in the 1918-05-31 No 4 Formation of Contract Act § 1, expressing the rule that the statutory provisions contained in the act (Chap 1) will yield when parties have agreed on different methods for conducting the negotiations and final conclusion - and that a similar principle applies to customs of the trade («handelspraksis»). A very practical example of this is seen in the law of tendering for contracts, where very specialised rules partly (but not wholly) replace the statutory provisions, cf infra).

Comparing the CISG 1980 and Nordic/Norwegian law, there are significant differences between Part II principles and the 1918 Act. The most important are to be displayed infra.

a. Concept of unilateral «dispositivt utsagn» and the legal effect of the unilateral temporarily not yet accepted offer

The starting point in any legal system on formation of contract must be the identification of messages with potential communicative legal effects as opposed to «conversation», «gentleman’s promises» never meant to be legally binding. In the first decades of the century, when the Nordic 1918 act was prepared and conceived,[32] there were academic disputes as to whether the offer's intention to be bound should be the relevant decisive element («viljesteorien») - or whether one should rather put emphasis on the offeree’s reasonable comprehension of the other party’s behaviour («erklæringsteorien»). The 1918 legislation was meant to be a compromise, but the subsequent development in commercial contract law has shifted the weight in favour of the good faith comprehension on the offeree’s side. There is abundance of Scandinavian authority to the principle that even mistake and non-intention of the offeror might result in a legally effective binding offer. The distinction between binding and non-binding communication in this respect is often expressed as a question of whether there is a «dispositivt utsagn» (offer or communication intended to commit the sender or reasonably understood as such by the receiver).[33]

CISG Art 14, however, defines an «offer» by requiring expressed intention of the offeror to be bound in case of acceptance, by way of indication of goods and express or implied determination of quantity and price. If, on the other hand, the offer is meant to be irrevocable under Art 16 (2), it must indicate, whether by stating a fixed time for acceptance or otherwise, that it is meant to be irrevocable. If the offeror has reason to rely on the offer as being irrevocable, and the offeree has acted in good faith reliance on this, the offer may also be considered irrevocable under Art 16 (2). Thus, a non-qualified unilateral offer under CISG 1980 can be revoked if the revocation reaches the offeree before he has dispatched an acceptance (Art 16 (1)). Under Nordic law, adversely, the unilateral offer is legally binding if it is reasonably so apprehended by the offeree. This is the underlying assumption in the 1918 Act § 7 and customary law, whereas the «offer» under CISG Art 15 (2) is only a potential offer, revocable as long as it is not accepted, Art 16 (1). Consequently, the «qualified» offer under Art 16 (2) and the distinction between ordinary and qualified offer is unknown in Nordic law and could form part of the reluctance to admit these alien principles to invade Nordic contract law.[34]

b. Point of intersection between non-effective and effective legal communication

CISG 1980 Articles 15 (1), Art 16 (1), Art 17, Art 18 (2), Art 20 (1), Art 22 all deal with the word «reaches» as the decisive criterion on whether a communication carries a legal effect. The Nordic statutory solutions distinguish between communication which is legally binding for the receiver («påbud») and communication which purports to bind the sender, such as an offer or a binding acceptance of a preceding offer. The Nordic solutions operate with «knowledge» («kunnskap») as the decisive criterion for unilateral autonomously binding «utsagn», which means that for instance the CISG 1980 Art 15 (1) offer (or even the qualified Art 16 (2) offer) might release its legal effect when it reaches the offeree - while the Nordic rule is that the communicative message must somehow have been apprehended or appreciated on part of the offeree in its nature and contents before legal effects will follow. A unilateral offer is otherwise legally binding from the time it reaches the knowledge of the offeree - 1918 Act § 7 (with two possible exceptions: (a) a limited «re integra» excuse for withdrawal in § 39 and (b) the authority for the courts to terminate both offers and contracts which carry an unreasonable effect, see infra).

Modern development of formation principles, not expressed in the 1918 Act, seem to extend the requirement of actual intention to release legal effects to situations where the person or undertaking is to blame for not having prevented another party in good faith to rely on what appeared to be a binding offer. Similarly the failure to prevent a «quasi»agent to «act» on behalf of a «principal» might under certain conditions amount to the equivalent to an actual intention to delegate negotiating capacity to that intermediary.

[35]From a technical point of view, the CISG 1980 rule is a far better solution than the 1918 Act § 7 knowledge rule. However, in the law of tender procedures (public or private), it is generally appreciated that the tender offer may not be revoked after the expire of the time limit set for submittal of the tender, even if it has by this time not yet been opened by the offeree. The position under modern electronic means of communication (fax, e-mail, Internet «click orders» etc) is not clarified as yet under present Norwegian law, directed to the 1918 Formation act for finding the legally valid answer leads one into an area of obsolete provisions on telegraphic errors, messengers not conveying notices according to instructions etc (1918 Act § 32).

c. «Battle of form»

Provisions (cf UCC § 2-207) are found in CISG 1980 Art 19, comparable to the Nordic 1918 Act § 6, dealing with internal discrepancies in the exchange of offer and accept. The «mirror rule» in Art 19 (1) is similar to 1918 Act § 6 first para. But the exception in Art 19 (2) goes beyond the present statutory Norwegian rule. The «last shot» principle, stating (1) that contract is concluded even if there are minor discrepancies between offer and the reply purporting to be an acceptance and (2) that the contents of the contract is in accordance with the differing acceptance, may seem doubtful, but one should have in mind that the scope of the «last shot» rule is narrowed down and limited in scope by provisions under Art 19 (3), dealing with the limits for material alterations. It states that alterations as to price, payment, quality, quantity, place and time of delivery, extent of liability, settlement of disputes are always considered as material alterations.

The 1918 Norwegian statute is hopelessly obsolete on this issue. There are some provisions granting the parties the option to withdraw from would-be contracts in case of discrepancies, as well as very vague and therefore technically unsatisfactory solutions on certain subjective conditions for advising the other party that the contract is off (1918 Act §§ 4 and 6). But the core of the matter, how an otherwise valid contract should be interpreted when there are discrepancies between offer and acceptance is not dealt with, leaving the courts three possible solutions, where the first one is probably the one best in line with case law: (1) «last shot», putting the latest communication on top when there is no reasonable expedient objection from the other party, (2) «first shot» opening up for supremacy of the earliest communication in the procedure, stating that the other party may not amend or alter - only accept or refuse to accept. (3) The third solution might be the policy-wise most rational: To simply let the courts base the contract solutions on the common position as far as it can be ascertained by the communication - and «from there on» apply general or specialised statutory or customary contract law on the matter.[6]

One practical question remains: How late may a party invoke CISG 1980 Art 19 (3)? Is there still room for the solution that contract is effective, but that the performance is not based on the differing terms of the accepting party? In practice, this seems to be the problem in connection with hidden discrepancies in the documentation exchanged between the offeror and offeree; they simply will not discover the alterations in time to permit the Art 19 (3) to provide, which means that the real question seems to be: What are the terms of the contract which neither party wish to contest? The «gryte» case Rt. 1970. 794 could possibly be considered to be a modest concession to the «last shot» rule in Norwegian law: The first offer with specifications was considered to have been modified during later negotiations; the buyer could no longer rely on the capacity specifications set out in the original offer.

On «battle of form» issues under modern Scandinavian contracts law, see U Göranson Kolliderande standardavtal (1988), Hellner JFT 1979.281, Krüger Norsk kontraktsrett (1989) pp 495 et seq Lando Udenrigshandelens kontrakter (4th ed 1991) pp 37 et seq, UfR 1988.B. 1 and Håstad NJ 32 Reykjavik (1990) I pp 345 et seq. (SC)

On the formation of contracts under Scandinavian law generally, see i a (in English) a concise report in Gorton Shipping and Contracting (1983). More extensive presentation of general principles of the perivate law of the Nordic countries are: Dahl and others Danish Law in a European Perspective (1996), Danish Law. A general Survey (1982), Bent Iversen Danish Business law. For Swedish law S Strømholm (ed) An introduction to Swedish Law (2nd ed 1988), H Tiberg and others Swedish law - a survey (1994). On Norwegian law N V Boeg Danish and Norwegian law: A general survey (1963).

Articles in English by Scandinavian authors are published annually in Scandinavian Studies in Law (Universitetsforlaget, Oslo). Many monographs will have summaries in English, as will normally all doctoral theses in Scandinavian languages.

The 1994 UNIDROIT Principles of International Commercial Contracts have received considerable attention in the Nordic academic and commercial environment, providing a possible viable alternative to the deadlock situation created by the Nordic joint refusal to accept the CISG Part II provisions on Formation.[37] Many of the provisions are already familiar to Nordic law, others might improve the present somewhat hard-to-identify situations, not necessarily because the present status is undesirable. (On the contrary, Judiciaries in all Nordic countries have demonstrated intention, competence and willingness to develop contract law on a case-by-case basis, even where legislator has failed to take action (good examples of this are judge-made clarifications on «letters of intent», «letters of comfort», «battle of form», «quasi-agency», precontractual negligence just to mention some). In this, the uniform law tradition in Scandinavia really means more than just the position in each state; there is room for a modern Scandinavian Contract law doctrine common even for EU-members like Denmark, Finland and Sweden on the one side and non-members like Norway and Iceland on the other. In the previous chapters of this book, references are made - and are meant to be almost equally relevant - to Norwegian as to non-Norwegian Nordic material (i a Supreme Court jurisprudence and literature).

The main problem, however, for an outside observer or actor, is the fact that the only statute dealing with formation issues is really outdated and only validly informative of a minor and less practical part of formation law in the commercial world of national and inter-Nordic legal communication.

UNIDROIT principles have not as yet appeared in court litigation in any Nordic Supreme Court.

If the parties desire the applicability of the principles, one could either contract in the regime by explicit reference before starting negotiations, or alternatively as a suggestive proposal in the forwarding of an offer. Failing explicit reference, the Norwegian courts would not imply the reference to the Principles unless this can be based heavily on practice in the trade or in the actual usage between the very parties to the subsequent dispute. This should be seen in light of general reluctance to adopt even widely used standard forms like the ECE third generation Nordic NL 92 and NLM 94 clauses, the NSAB forwarding agent conditions (NSAB 1985 now updated as NSAB 2000 from 1998-06-01) and others.

Whether UNIDROIT or CISG conditions is to be preferred for conducting negotiations and pre-contractual exchange of offers and acceptance is difficult to answer simply by comparing one to the other.

The desirability of the adaptation of the CISG 1980 Part II system has been advocated in Scandinavia and, indeed, attempts have been made to persuade the legislator to prepare a repeal of the 1918 formation of contract system. However, the slim prospects for a possible neo-Scandinavian legislative unanimity on a modern reform of the present fairly outdated 1918 act, has resulted in a joint negative position by the legislator, fearing that not reaching a common position in this area, is worse than having one uniform Scandinavian Act, even if it admittedly needs legal rehabilitation, if not by legislator, then by courts and arbitrators by way of discrete updating in the day-to-day contemporary interpretation of the statutes. This author believes that the reluctance to join in on international main stream trends puts the Norwegian and Nordic countries hopelessly offside in fora for modern global contracting procedures and that an acceptance of CISG Part II would have been far better than the present state, thus excluding a set of principles widely adopted around the commercial world. However, many writers have advocated a solution to this, namely the express contract incorporation clause in order to apply either the CISG Part II principles when appropriate - or the «lex mercatoria» principles such as stated in the UNIDROIT of International Commercial Contracts (1994) as well as modern systems for IT pre-contractual communication, such as the EU-Commission Recommendation 94/820 EC On the commercial use of interchange agreements for electronic data interchange agreements for electronic data interchange (standard clauses) «relating to the legal aspects of electronic data interchange» with Annex (1),[38] as an avenue for achieving a «European Model EDI (Electronic Data Interchange) Agreement».[39] A similar procedure could incorporate the ICC Uniform Rules of Conduct for Interchange of Trade Data by Teletransmission (1997) (UNCID).[40]

§ 26.3. Agents, importers and local representatives under Norwegian law. UNIDROIT 1983 Convention on Commercial Agents.

The status of «agents» in import and export trade is partly regulated in the Uniform Scandinavian Acts on Agents, Commissioners etc («kommisjonsloven», Norwegian version 1916), partly in the Uniform Act on Formation of Contracts (Norwegian version 1918). The status of independent local importers (dealer) falls outside the legislature («selvstendig forhandler»), and so do distribution dealer contracts in general, contracts for licence production, joint ventures involving local subsidiaries, franchising arrangements etc.

As to the formation of contracts, the basic principle in Norwegian (and Scandinavian) law is the rule of «disclosed» principal. A party negotiating a contract will become subject to contract obligations unless it is made externally apparent that the negotiating party is acting on behalf of a principal different from himself, either by way of formal documentation, by way of usage for professional occupation («stillingsfullmakt»), by way of signalling specifically that the contract is concluded for someone else - or by way of a principal's negligent disregard of the third party's bona fide assumption that the contract is negotiated on behalf of that very principal. Neither the broker nor the commercial agent is presumed to have authority to act on behalf of the principal. Courts often deal with the question whether the agent or broker has been authorised in a way which carry the solutions set out in the 1918 Act Cap II.[41]

When the contract is negotiated on behalf of the principal, the negotiating agent will have no duties or obligations under the contract. However, if the agent acts without authority he will be liable for the loss incurred to the third party attributable to the fact that the contract cannot be enforced against the «pseudo» principal (cf similarly UNIDROIT 1983 Convention Art 16).

The common law privilege of directing a contract claim towards the «undisclosed principal» is alien to the Scandinavian conception in these matters. For this reason, it is doubtful whether the UNIDROIT attempt (1983 Convention On Agency in the International Sale of Goods) to establish a compromise between the Anglo-American agent principle and the Continental law of agency will succeed in Scandinavia (Art 9, 12-13). The general reaction to the 1983 Convention has so far been reluctant, although the matters are under consideration in connection with the reform of the 1918 Uniform Scandinavian Act on Formation of Contracts.[42]

Distributorship contracts have not been made subject to any specific legislation in Norway, although lawyers have voiced the need for a better protection of local dealers, particularly in view of the intensified parallel legislation to improve the status of the commercial agent in present law. It is somewhat doubtful whether the «generalklausul» avtl § 36 could be invoked in contracts which are unreasonable, particularly in respect of economical settlements when these contracts are ended by termination by the importer or foreign producer.

§ 26.4. Some interrelated SGA 1988 / CISG 1980 scope issues

a. Deciding the scope of any convention, it is of importance to ascertain which restrictions the clarification of scope puts on-to the law. Within its scope, the CISG is meant to exclude contradictory legislation, but has no direct effect on parties’ autonomous capacity to tailor-sew the contract which suits them best (CISG Art 6 with one exception in Art 12). The CISG has no mandatory effect in other respects than that which pertains to the legislator. The consumer dimension is absent since consumer transactions are explicitly excluded in CISG 1980 Art 2 (a).[43] The parties may even «buy more» of CISG 1980 if they so wish; a sales transaction falling outside the formal scope provisions might be included by way of incorporating contract clauses.

In the following discussion, one should appreciate the distinction between question one on which contracts fall outside both CISG 1980 and SGA 1988 as opposed to question two, which is to ascertain the contracts which are subject to the SGA 1988 but not to the CISG 1980 (the reverse situation seems less conceivable).

b. The basic concept of sale expressed or implied in CISG 1980 decides which contract will fall under either of the two acts. The method in CISG corresponds probably to a large extent to the half-way definitions which can be extracted from the SGA 1988. The exclusion of real estate transfers appears from the CISG 1980 title «Goods» and to the very first introductory provision Art 1 (1), whereas the SGA 1988 does not identify «goods» in the title, but excludes those contracts by specific provision in § 1 (1).[44] The distinction between sales and services is solved similarly in CISG 1980 Art 3 and SGA § 2 (1) and (2).[45]

The Nordic tradition has been to rely on statutory SGA provisions for physical as well as for abstract positions such as intellectual property, contract positions in rental, service and similar values. Even the 1988 Act includes stocks, and there are references in other legislation which imply that claims for money can be transferred subject to sales law principles.[46] The word «goods» does not appear in the title of the Act.

The scope of the 1988 SGA is somewhat wider than the scope of the Convention, since express exclusions made in CISG 1980 Art 2 are adopted only to exclude such contracts in international transactions, SGA 1988 (§ 5 (3)) and not in the Act governing domestic or inter-Nordic transactions.[47]

CISG 1980 Art excludes certain sales from the scope of the Convention. There are some interpretation issues on the Norwegian adaptation of this provision. As long as a contract is excluded from CISG, there seems to be no problem. On the other hand: What is the position if an international sale of goods contract does not fall outside the scope of CISG 1980 where the EU directives deals with the buyer’s legal position by mandatory rules?

The CISG Art 2 (d) exclusion of «stocks, shares, investment securities, negotiable instruments and money» (SGA § 5 (3)(d)) is of some importance in this respect since it indicates that the title of the convention should not be read too literally: «Shares» would allegedly not at any rate have fallen under the term «goods», so the exception in Art 2 (d) seems superfluous unless a more liberal and less restrictive approach is adapted towards the potential scope limitation expressed in the CISG 1980 Title. The Art 2 (d) «stocks, shares...» etc exception means that the international regime is of no interest to transactions governed by the Norwegian 1997-06-19 No 79 Act on «stock» transactions («verdipapirhandel»). Nor will purchase or sale of currency be subject to the rules.

The Art 2 (d) exception has been transposed in a slightly different wording of the SGA 1988 § 5 (3). «Shares» reappear in the text of the statute as «rettigheter», which in this author’s opinion excludes from the convention something substantially more than the corporate legal term «shares», that is, however: If the sentence is really meant to be decisive on the scope issue. Adversely, a «rettighet» in Norwegian means any legal position, for instance under an existing contract, under a joint venture arrangement etc. For instance, the Norwegian concept «rettighet» would include the transfer of a rental contract as well as a sale of a production licence in the oil and gas industry, while this can only with intellectual energy and dedicated purpose be put under the term «share» or under the concept «goods» in CISG 1980.[48]

Sub-contracts involving the delivery of non-marine components, materials etc would presumably not fall outside the scope of the Convention, for instance when a diesel engine is purchased from France for delivery to a Norwegian shipyard under a main shipbuilding contract.[49]

The contracts for fabrication and construction of equipment for the offshore oil industry («fabrikasjonskontrakt») do not fall within the term «vessel» or «ship». On the other hand, there is some doubt as to whether the SGA will apply on main contracts within this area, the objection being partly that the purchaser supplies a substantial part of the relevant materials for the fabrication (CISG 1980 Art 3 (1)), partly that one may question whether a contract for placing production structures more or less permanently on the sea bed is a construction contract rather than a sale of goods contract (even though the Art 3 accepts supply and construction as a part of a contract governed by the convention). Unless the Art 3 exception for materials supplied by the owner is applicable, it is this author’s contention that the contract will fall under the 1988 SGA regime. At any rate, the subcontracts under construction projects would in this author’s opinion no doubt be subject to the Act and the Convention.

The «ships, vessels, etc» exception in CISG 1980 Art 2 (e) is somewhat obscure in certain respects. A glance at the official commentaries to the CISG exception seems to clarify that the reason for this exception was the great variety in register systems in the signing states.[50] This probably means that the concept «ship» must really be read as a relative reference to ships subject to national register arrangements such as the Norwegian International Ships Register (NIS) or the regional register systems provided for in the 1994 Maritime Code Chap 2.[51] This means that both registered ships and the contracts for shipbuilding fall outside the scope of CISG 1980, possibly also objects which are not ships, but subjected a statutory analogy to the same rules as ships, such as drilling units provided for in the Maritime Code § 507. The Maritime Code takes a very broad view on the concept of ships in other relations,[52] but this might not have any bearing on the interpretation of the CISG 1980 Art 2 (e) exceptions. For instance: Pleasure crafts will undoubtedly fall under the scope of many of the 1994 statutory provisions, but it seems pretty clear that the import to a local dealer ordering a fairly big boat for display or sale to an already existing a customer should fall within the scope of the Convention.[53]

The exclusion of «ships» and «vessels» in Art 2 (e) means that both sale and shipbuilding contracts are excluded from the convention regime. In Norway, shipbuilding enterprises are universally negotiated on the basis of a standard (agreed) contract form last revised 1981 (in this book referred to as «Skip 1981» 1998-99 agreed reform of the contract expected). Statutory provisions deal with security arrangement, registering etc (partly reflecting international convention on ship mortgage). It is worth nothing that the expression «fartøy» in 1988 SGA § 5 (3)(e) somewhat surprisingly will imply that the commercial export and import of pleasure crafts to and from Scandinavia falls outside the direct scope of the Act. Cf the expression «vessels» in CISG 1980 Art 2 (e).

Sale of vessels under the Norwegian MOA Saleform 1993 will fall under the exception - as will the regular shipbuilding contracts which under Norwegian classification formally is considered to be a sale for later production and delivery («tilvirkningskjøp» - «Werkslieferungsvertrag») and not a contract for the rendering of a service (CISG 1980 Art 3). More doubtful is the question in relation to contracts for the fabrication of installations in the oil and gas industry, such as are the subject to the Norwegian Fabrication Contract 1992 («NF 92»). These contracts are very extensive and detailed, leaving not many issues to be solved by reference to statutory law. But if a classification has to be made, for instance for the object of deciding scope of time limits for claims under contract, statutory provisions differing from one category of contract to the other, then the final classification has to be made.

Firstly, it could be argued that irrespective of the nature of the object in a traditional fabrication contract, it is not a contract for sale («supplies») but for «works», which would mean that the CISG 1980 does not apply without having to go further on other scope issues. The EU Council «Utility» Directive 93/38 EEC co-ordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors[54] classifies «works» contracts to cover generally all «[g]eneral building and civil engineering work», probably to be understood so that the «works» threshold values set out in Art 14 will apply (and not the considerably lower value limits for «supplies»). This, however, does not decide whether the contract can be treated as a sale of goods contract applying CISG 1980 Art 3. Construction contracts for the erection of buildings or other permanent objects on land («entreprise» or «bygg- og anleggskontrakter») are normally described as contracts for the incorporation on-to real estate. However, the typical fabrication contract take-over is normally done afloat, which means that the construction contract approach fails. The classification within «sales» has recently been supported indirectly by statutory provisions introducing obligations on how to dismantle and remove the installations when the production is to be terminated.[55] Finally, a contract for the supply of design, raw materials etc from the customer to the contractor for production and redelivery is not a sale of goods contract, and if this is the case, then the CISG 1980 is not applicable. The conclusion seems to be that the contract is contract for delivery of movable although of considerable size and of considerable resemblance with land construction.

The second CISG 1980 classification issue pertains to the Art 2 (e) exception itself. It could be argued that the official comments reference to register system problems referred to in the official comments equally apply to these contracts, which may be registered under rules equivalent to ships and shipbuilding contracts. In this author’s view, this seems to be the better view - and there is support for the argument in the preparatory works.[56] The conclusion, therefore, seems to be: The fabrication contract like the NF 92 as well as the sale and transfer of these objects fall outside the scope of CISG 1980.[57]

«Electricity» (f) is not mentioned specifically since the Norwegian act does not apply to electricity at all.[58] Comments in the Norwegian preparatory works settles an old issue: The purchase of electricity is meant to fall outside the scope of the Norwegian Act, wherefore the word electricity does not appear in the SGA 1988.

Consumer contracts are excluded in CISG Art 2 (a) and SGA § 5 (3)(a), even though such contracts may very well be of an international nature.[59] The consumer exception in Art 2 (a) does not quite coincide neither with the assumed meaning of SGA 1988 § 5 (3)(a) nor with the EU conceptual approach to consumer sales in respect of the applicability of the growing number of consumer protection directives (see list with transposition references in Norwegian law infra).

The EU directives refer to physical persons while the CISG 1980 Art 2 (a) refers to goods bought for personal purposes as defined.[60] Furthermore, where the seller lacks knowledge of the status of the buyer, this means that a private contract might be treated as a non-consumer contract under CISG 1980, while the EU does not deal with good faith on part of the seller.

The general approach to the CISG 1980, SGA 1988 and EEA consumer issues seems to be regulated in the EU Treaty Art 234 as far as CISG 1980 is concerned within the Union and in EEA Agreement Art 120.[61] Member States and EEA states such as Norway will not violate the Treaty (EEA Agreement) by conflicting agreements or treaties signed before accession or signing of the EEA agreement. In other words: The possible inclusion of a sale of goods contract within the CISG 1980 means that the CISG rules will apply, although EU principles might still be applicable as long as there is no discrepancy between the two sets of rules.[62]

§ 26.5. Observation on subjective features - CISG 1980 Art 94 (1)

The term «international sale» adopted in the 1988 Norwegian Sale of Goods Act 1988 («SGA 1988» = «kjl 1988» elsewhere in this book) § 87 is taken from CISG 1980 Art 1 (1), but as the Nordic countries have made reservations under Art 94 (1), inter-Nordic sales transactions will fall outside the scope of the Convention regime, cf SGA 1988 § 5 (2). The exception under CIGS 1980 Art 94 (1) regarding neighbour states is, however, according to the text of the Convention, based on the assumption that the «Contracting States» in question «have the same or closely related legal rules» in the matters regulated under the Convention. This was true during the former regime under the 1905-1907 Uniform Scandinavian Sale of Goods Act, and would still have been true if all the Scandinavian countries had adopted the draft of new Scandinavian legislation subsequent to the 1984 proposal (Nordiske Utredninger 1984:5). Legislation based on the 1984 draft has been enacted in Finland (1987), in Norway (1988) and in Sweden (1990). Denmark, on the other hand, has implemented the CISG 1980 for international transactions, but has not adopted the 1984 Scandinavian draft in national law - and has probably no intention to do so. The fact that Denmark has abstained from adapting the 1984 joint Nordic Report NU 1984:5 on the sales of goods law reform, is clearly violating the assumption in the CISG 1980 Art 94.[63]

An international sale under the Norwegian Act § 87 will cover sale contracts between parties whose place of business are in different states (outside Scandinavia), provided that this appears from the contract, from previous business relations between the parties - or from information exchanged prior to or at the time of the conclusion of the contract.

Note that the party may be represented by an intermediary whose place of business may differ from the place of his principal: A contract concluded on behalf of a foreign party with a local agent is an international contract, as are contracts negotiated through a local broker. Under Nordic law, the term «agent» as referred to in common law could mean different things. An important distinction must be drawn between the intermediary acting in his own name and an intermediary who acts on behalf of his principal. The «agent» in international commercial terminology could under Nordic law be either. Consequently, the «agent» provisions in the Nordic 1916-06-30 No 1 «kommisjonsloven» means an intermediary who acts in his own name but for the account of his principal, as would have been the case for the importer or local dealer in relation to sales to local customers, thus negotiation outside the scope of the CISG 1980, whereas, on the other hand, the «commercial agent» in the Norwegian version of the Council Directive 86/653 18.12.1986 on the co-ordination of the laws of the Member States relating to self-employed commercial agents [1986] No 382/17, namely in Norway 1992-06-19 No 56 Act on commercial agency, the negotiating of contracts not obliging the agent must be treated as an international contract in respect of the non-resident seller, even though there are provisions accepting authority for the agent to receive claims on behalf of his principal. Nordic contract law does in principle not recognise the equivalent to the common law «undisclosed principal», but to avoid ambiguity, the Norwegian Supreme Court has stated very clearly that an intermediary who does not inform the other party that the contract is to be made on behalf of a principal, will be presumed to have contracted responsibilities himself - not committing his undisclosed principal and therefore not incurring liability under the contract negotiated - «Fekete» Norwegian Supreme Court Law Report «Norsk Retstidende» (Rt.) 1980.1109.

The term «international sale» goes beyond the scope of the Convention: Contracts with parties in non-Convention states are subject to the special regulation in 1988 SGA, not only when the contract involves genuine Vienna Convention countries both on seller's and buyer's side.[64]

CISG 1980 is not mandatory in the same way that international transport conventions normally are. The national legislator may not provide for other solutions, but the parties may do so. This can be done specifically or by adopting standard contracts or single clauses like national versions of the original ECE 188 General Conditions for the Supply of Plant and Machinery (1953), ICC single clauses (like Publ 421 on Force Majeure), or by incorporating relevant trade terms from INCOTERMS 1990.[65]

A genuine international perspective should consequently take into consideration frequent practice and procedures in contract routines: In the import trade of automobiles, in the fish export trade, in the energy and oil industry sector etc.

§ 26.6. Further inter-legal issues in international sales under Norwegian law - EEA aspects

Norway was never a Member state to the EU (first Referendum «no» in 1972, second «no» 1994). In spite of this, Norway's status in legal and legislation manners is very much equivalent to the law within the EU. The 1992 EEA (European Economic Area) Agreement committed Norway to the adaptation of some 1300 pieces of legislation («acquis communautaire») into Norwegian law, which was done in 1992, and the process is continuing through the EEA provisions on joint legislative measures subsequent to 1992. The joint EEA Committee is currently registering EU directives and regulations to be imported into Norwegian legislation. The adaptation of huge quantities of EU law is channelled through a more or less summary parliamentary procedure not quite of the nature many people would have expected after the 1972 and the 1994 referendum «NO»s. In fact, the assumption that Norway, together with Iceland and Liechtenstein, would negotiate its preferences to EU law on each dialogue is somewhat bleak. The truth is that EU law is imported more or less automatically with a minimum of real parliamentary democratic open debate on the matters («Stortinget»). Similarly, the traditionally voluminous preparatory ministerial proposals, policy reports on draft legislation, has been replaced by rather short-handed formal proposals to legislate on EU directives, regulations etc - with a minimum of the pre-EEA so extensive preparatory comments and annotations from committees’ reports and subsequent civil servants of the Ministry affected.

Turning to contract law, the European Community as such has not moved into the core of general contract law on contracts for supplies and services.[66] Possibly, the 1994 UNIDROIT Principles avenue and the «lex mercatoria» suggestions of the Lando-Beale Commission[67] will be considered as a realistic alternative to achieve better unity and harmony within the EU. The present EU concern is limited to certain areas, an in particular these two: Consumer protection and regulated Public Contracting.[68] Public procurement shall be dealt with infra, now only a few reminders on the consumer legislative status in Norway.

The question of who is a consumer directive could be a matter of definition (supra). Having that in mind, the list of presumable nearly fully implemented EC and EU consumer protection directives within the sales of goods area in Norway looks like this (as pr July 1998):

1. Council Directive 85/374 EEC 25.7.1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products [1985] OJ No L 210/ 29

Transposed as: 1988-12-23 No 104 Lov om produktansvar (pal)

2. Council Directive 84/450 EEC 10.09.1984 relating to the approximation of the laws, regulations and administrative provisions of the Member States concerning misleading advertising [1984] OJ No L 250/ 17

Transposed as: 1972-06-16 No 47 Lov med kontroll om markedsføring og avtalelevilkår (markedsføringsloven) §§ 1-3

3. Council Directive 85/577 EEC 20.12.1985 to protect the consumer in respect of contracts negotiated away from business premises [1985] OJ No L 372/ 31

Transposed as: 1972-03-24 No 11 Lov om angrefrist ved visse avtaler om forbrukerkjøp mm (angrefristloven)

4. (a) Council Directive 87/102 EEC 22.12 1986 EEC for the approximation of the laws, regulations and administrative provisions of the Member States concerning consumer credit [1987] OJ No L42/ 48, amended
(b) Council Directive 90/88 EEC 22.2.1990 [1990] OJ No L 61/ 14 and

(c) Directive 98/7 EC 16.2.1998 of the European Parliament and Council [1998] OJ No L 101/17

Transposed as 1985-06-21 No 82 Lov om kredittkjøp m m and
1988-06-10 NO 40 Lov om finansieringsvirksomhet
§ 2-12A (regulations not in place as pr July 1998 - ministerial hearing document 94/2976 dated 18.12.1996 cf also - NOU 1994:19 with proposal for an extensive finance law reform within which the implementation will probably take place)

5. Council Directive 89/552 EEC 3.10.1989 on the co-ordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities [1989] OJ No L289/ 23

6. Council Directive 93/13 EEC 5.4.1993 on unfair terms in consumer contracts [1993] O J No L 95/ 29

Transposed as 1918-05-31 No 4 Lov om avslutning av avtaler, om fuldmagt og om ugyldige viljeserklæringer §§ 36 and 37
1972-06-16 No 47 Lov med kontroll om markedsføring og avtalelevilkår (markedsføringsloven) §§ 1-3

7. Council Directive 94/47/EC 26.10.1994 on the protection of purchasers in respect of certain aspects of contracts relating to the purchase of the right to use immovable properties on a timeshare basis [1994] OJ No L 280/ 83

Transposed as 1997-06-13 No 37 Lov om salg av tidsparter i fritidsbolig (tidspartloven)

8. European Parliament and Council Directive 97/5 27.1.1997 on cross-border credit transfers [1997] O J No L 43/ 25;

No transposition as yet (NOU 1994:19)

9. Directive 97/ 7 EC 20.5.1997 of the European Parliament and of the Council on the protection of consumers in respect of distance contracts [1997] OJ No L 144/ 19

No transposition as yet

10. Directive 97/55 EC of the European Parliament and of the Council of 6.10.1997 amending Directive 84/450 EEC concerning misleading advertising so as to include comparative advertising
[1997] OJ No L 290/ 18

EU proposal for directive expected through the EEA «pipeline»

Commission Proposal for a European Parliament and Council Directive on the sale of consumer goods and associated guarantees COM(1998) 217 final - 96/0161(COD) 1.4.1998 (OJ 1998 No C 148/12 14.5.1998
(replaces COM(95)final) OJ 1996 No C 307/ 8)
(Appendix 2 in this book - abbr (Norw) EU Forbrukerkjøp Dir utk 1998)

The «pipeline» COM(1998) 217 final On the sale of consumer goods and associated guarantees might prove to have a major impact on the structure and contents of present statute on consumer sales, in fact the SGA 1988 turned mandatory in consumer transaction. In the previous chapters of this book considerable attention has been addressed to this proposal, discussing possible expected law reforms and suggesting possible interpretation in the SGA 1988 perspective within the area of consumer purchases.

The 97/55 Directive is presumed to be in accordance with the present law, since fair comparative competitive advertising has been accepted for many years in Norway under the 1972-06-16 No 47 Act on marketing § 1.[69]

§ 26.7. Remarks on the Scandinavian «soft law» «generalklausul» authorising judicial «reasonableness test» (Formation of Contracts 1918 Act amendment 1983 - § 36)

One important and far-reaching amendment to the 1918 Formation of Contracts Act was enacted in the 1970- and 1980'ies, when all the Nordic countries at different occasions introduced the so-called «generalklausul» in § 36, authorising the courts to employ a discretionary test of reasonableness in any private law contract contested in litigation or otherwise within the formal scope of the 1918 Act (private agreements, contracts, consumer or commercial contracts).[70] The wording of the provision is very wide, and should for comparison be related to similar provisions in other recent legislation, such as the German AGB 1976, the English Unfair Contract Terms Act 1977, the UCC § 2-302.[71]v The § 36 provision can unofficially be translated:

«A (presumably non-public) contract may be wholly or partially terminated, changed, amended or otherwise adjusted ex ante or ex post, in whole or in part - if the contract in effect is unreasonable -

[considering i a (not exhaustively):]

- contents of the contract, position of the parties, circumstances when signing the contract as well as subsequent circumstances as a whole»

This ultimate «soft contract law» high peak in the Nordic countries is not limited to the quality of the contract or clause at the time of the conclusion of the contract. It covers also the actual effect estimated at the time when it is being invoked - or even negative consequences occurring after the contract has been performed.[72]

There is no formal requirement that the § 36 provision can only be invoked in court litigation or in other fora for judicial review. The vague and discretionary format of the provision seems to make it less suitable to the settlement of disputes outside courts.

Council Directive 93/13 on unfair terms in consumer contracts[73] is a «minimum» directive, leaving the Member states the option to extend the provision and judicial authority furthermore.[74] The Norwegian position has been that the Formation Act § 36 read in conjunction with the administrative statutory «Forbrukerombud» and «Markedsråd» authority to prohibit undertakings the use of unreasonable standard clauses in all professional consumer service and goods contracts (1972-06-16 No 43 Act on Marketing § 9a) satisfies the requirements in the 93/13 directive.[75] 1991 draft seems not to create any problems in contracts otherwise subject to the CISG 1980 regime, since the convention explicitly states that it is inapplicable to consumer contracts (Art 2 (a)).[76]

The § 36 provision applies to any contract, not only sale of goods contracts - and both within and outside the consumer area. It applies to international sale of goods transactions, both within the consumer and the commercial area, but there are so far no court decision explicitly within this field in Scandinavia.[77] One question could be to which extent the provision in CISG 1980 Art 7 (1988 SGA § 88), referring to the need for uniformity when applying the 1980 Convention, simply excludes by supremacy a domestic judicial discretionary test of reasonableness like the Nordic § 36 provision in international transactions. However, courts and arbitrators have applied the provision in typically commercial transactions, both within fabrication contracts with international flavours not involving foreign parties - and in other areas of commercial contract law.[78]

In ND 1979. 231 No Voldgift «Wingull» the arbitrators in fact ruled out the well established ECE 188 «Guarantee clause» (Art 9.16.), excluding liability for consequential damages. The case involved serious shortcomings of a marine propelling driving belt (sic!) machinery replacing an outworn marine diesel engine. The equipment turned out to be a nightmare disaster in the running of the ship, and caused consecutive delay losses to the shipowner of the - in that period much debated - Suisse Atlantique common law «substantial breach» character (Suisse Atlantique v Rotterdamsche Kolen Centrale [1966] 1 Lloyd’s Rep. 529 HL («General Guisan»)). The statutory provision which was applied to strike out the clause excluding liability for the supplier, in conjunction with restrictive interpretation of the clause in question, was § 1 2nd para in the 1907 SGA, as revised 1973, a provision with a scope limitation to contracts for the sales of goods, but otherwise with a wording identical to the subsequent general § 36 in the 1918 Act. Another case is ND 1985. 220 Norw Arb «Sambi»; ship purchase between Norwegian parties; in the case it was obiter assumed that the sellers insistence of the contract would have necessitated a § 36 intervention by the arbitration board. Outside the sale of goods area, references could be made to international contract disputes decided in ND 1985. 234 No Voldgift «Mascot» (bare boat charter freight currency conversion calculation clause revised under reference to § 36). The Norwegian arbitration reported in ND 1990. 204 NV on gas tariffs in long term joint venture gas contract «Ula», seem to have cooled the optimism for judge-innovative contract law applying the § 36. The unexpected «windfall» from the Ula gas field distorted the balance of a pipeline transportation contract between Statoil and other local subsidiaries’ licences; the claim based on i a § 36 was rejected, the arbitrator professor S Brækhus stating that contracts of this magnitude and in commercial climate as in this case should in principle be left without the intervention of § 36), cf on «rigor commercialis» also Hellner Kommersiell avtalsrätt (4th ed 1993) pp 15 et seq.

It is, however, an impression that courts and arbitrators have employed the provision fairly restrictively, so that the possible international anxiety over far-reaching Scandinavian «soft law» dissolution of otherwise fairly predictable commercial contract law in Scandinavia is by far exaggerated. It is rightfully thought that courts and arbitrators will be extremely reluctant to apply § 36 in sale transactions governed by 1980 CISG, thus violating the principle of unity expressed in Art 7, cf also Art 8.[79]

§ 26.8 Survey over some select CISG 1980 issues and the corresponding rules in the 1988 SGA

a. The question on precedents and judiciary authority on CISG 1980 in Norwegian Sales of Goods law is easily answered: There are as yet no directly relevant reported cases, neither in Supreme Court (Rt.) nor in the reported appellate/city/district courts (RG). The author must take his reservations for possible arbitration awards and court judgements in other jurisdictions than Norway, involving Norwegian interests.

The method for interpreting the provisions on international sales contracts is set out in 1988 SGA §§ 88-90, reflecting CISG 1980 Art 7-9. The CISG 1980 philosophy is that even when the Convention leaves a question open, the courts should adapt principles based on the international character of the contract and the need to promote uniformity in its application - and give such observations supremacy before resorting to domestic law otherwise applicable.[80]

The wording of the statutory provisions in Chap XV transforming CISG 1980 Art 7 differ somewhat from the similar general provisions set out in the introductory provisions in 1988 SGA § 3, but in the author’s opinion it is probable that the courts would have applied the method prescribed in the convention anyway, even if there had been no provisions expressly stating this. The international «flavour» of a contract will always serve as a guide-line when interpreting contracts and basis legal rules in this area.[81] To which extent the forthcoming developments in courts´ practice will emphasise continuity based on existing abundant case-made law not formally abolished in 1988 SGA, and to which extent courts (or rather the lawyers arguing the cases and supplying the relevant material for the judge) will in fact do what CISG 1980 requires them to do, namely look for international guidelines in settling future sale of goods law disputes - as suggested in CISG 1980 - still remains to be seen.

b. Provisions dealing with lack of conformity («mangel») issues of various kinds, CISG 1980 Art 35 et seq, correspond to provisions in 1988 SGA §§ 17 et seq. It was generally considered to be a methodological improvement that the statute now - as a state of the art - lists expressly the criteria for classifying shortcomings in the goods as defects in the legal sense of the word. Particularly, it should be noted that the «purpose» principle in Art 35 (2)(b) reflected in SGA § 17 (2)(b) corresponds very well to Scandinavian post-war jurisprudence and arbitration practice dealing with wrongful advise or «mal-recommendation» of products or technical solutions when sellers acts as a combined seller and consultant for customer, advising him on what to buy and why. The interpretation of these provisions will probably not represent any radical departure from previous Scandinavian jurisprudence in these matters.

The number of cases dealing with the concept «mangel» (i e lack of conformity) is abundant and evidently enormously varied in contents and effect. In the preceding Norwegian part of this book (supra § 8.), the analysis of cases has been structured along the following main pattern: Moving from the contract and contract documentation, via lack of conformity as a matter of non-conformance with the expectations created by informative marketing further on to the very practical provisions on abstract and individual functional risk of in § 17 (1) (a) and (b).

The «Lyd & bilde» judgement Rt. 1998. 774 (1998-5-15) is one out of extremely scarce consumer lack of conformance cases actually argued before the Supreme Court in recent years. The judgement deserves a critical comment. The facts of the case was that a VCR unit sold to the consumer who was the claimant of the case stopped to function normally after close to 4 years after purchase, and this took place close to 3 years after expire of existing guarantee period for the product in question. The statutory calendar time limit for filing a claim based on defects is since 1988 5 years for products of high durability like a VCR player (SGA 1998 § 32). After having discussed the issue of burden of proof after so long lapse of time, the Court actually refused to apply such principles on the actual case. In stead, the Court, whose reported opinion was voiced by one of the judges (normal procedure in Supreme Court judgements), went on to state that the statutory calendar period in consumer transactions, 5 years, in this case contributed to the general expectation on part of the general public that any VCR unit of this price and category could be expected to last for at least 5 years, although the Court at the same time recognised the fact that statistics proved the occurrence of breakdowns in single component (like the unit’s IT-receiver in this case) and that the general public was not mislead by mal-information by producer in the marketing of the product. In this author’s opinion, this means that the Supreme Court is directing the level of expectation which the producers will have to meet, and that is a highly controversial position, see «Juristkontakt» 1998 No 6 pp 25 et seq.

In the same case, the Supreme Court questions the contents of CISG 1980 Art 35 (2)(a)-inspired statutory provision SGA § 17 (2)(a) by demonstrating obvious problems applying the assumption than any defect which is not rooted in the express or implied contract terms must be classified under the cited «purpose» criterion, since there is no other way to deal with lack of «satisfactory quality» etc. One might agree that the concept based on purpose operates as a straight jacket for many prosaic claims’ situations, so that the whole general approach is somewhat better expressed in the only EU non-CISG state UK with its 1979 Sales of Goods Act Sect 14 (2) «satisfactory quality» concept[82] and which, in fact, seems to have been the prevailing view in Norwegian court practice throughout most of this century in a period when the 1907 Act in its provisions did not touch upon the concept of «defect» or «lack of conformity» at all.

The SGA § 17 (2)(b) provision on buyer’s purpose should have reflected the CISG 1980 Art 35 (2)(b), but in fact does not reflect that Article. The CISG Art 35 (2)(b) requires that the buyer’s purpose must have been made known to the seller at the time of the conclusion of the contract» (emphasis added), whereas the Norwegian statutory version goes further in favour of the buyer: The delivery is considered to be in lack of conformity if the seller knew or must have been aware of this purpose or intent. The difference means that the CISG version requires some active interpellation on part of the buyer, while more knowledge is enough under the Norwegian version. The situation covered by the cited provision seems to be very practical and will cover not only deliveries with inherent functional or suitability defects of the object, but also construction errors and explicit or implicit des-information on the actual suitability of the product.

Lack of conformity in formal documentary matters is of growing importance even outside the tendering of documents in connection with the dispatch of goods. European standard formulas for quality assurance - like the -EN ISO 9001.[83] - provide means of controls for the buyer. Application of standards for assessing conformity issues means that the EEC standard development is of relevance not only within the construction contract area, but in sale of goods to be put into production for the buyer as well. Unsettled issues seem to be the extent of vicarious liability in these cases, i e how far the CISG places a risk or possibly even liability for information provided by third parties responsible for attestation, certificates, survey reports etc.[84]

c. The specific performance provision in 1980 CISG Art 46 et seq represents a novelty in the common law tradition. In Scandinavian law, the specific performance remedy has been open to the buyer in cases of non-delivery (delay) (1907 SGA § 21), but up until 1988 the remedy in disputes on non-conformity was limited to cases where - a guarantee clause commitment was absent - substitute delivery («omlevering») could satisfy the contract requirements (1907 SGA § 43). The Convention in reality leaves the specific performance remedy to domestic law (Art 28), and it should be noted that the 1988 SGA § 34 now affords the buyer with the corrective specific performance remedy even in disputes over defective delivery.[85] If a rectification of a defect - or a duty to deliver - in courts' discretion places an unreasonable burden on the seller, the remedy cannot be invoked and the buyer will have to claim damages (§ 34 (1), cf § 23 (1)). This would be the case in international transactions as well.[86]

The 1988 Act makes no changes in contracts where the buyer can rest his claim on a «guarantee clause» such as the ECE 188 (1953) Art 9. The principal question in such a case will be whether the normal exemption from liability for consequential loss will be effective and valid, a question which is particularly pressing when the defects in question are of a serious nature. Scandinavian courts are reluctant to recognise exemption clauses when the existence of non-rectified defects frustrates the purpose and intent of the contract.[87]

d. A contentious issue during the preparation for the Convention was the question which is now regulated in CISG 1980 Art 39, obliging the buyer to notify the seller within reasonable time of any lack of conformity (Norw «reklamasjon»). The provision is probably of Scandinavian origin, for it is well in line with former Uniform Scandinavian SGA 1907 § 52. To common law, however, the provision is a novelty, since notification rules have only occurred in connection with repudiation.[88] The reduction of price in defect claims is a well established remedy under Nordic sales of goods law. To some of the CISG countries, such as the common law tradition, this must have meant a considerable change in legal substance.

e. The «impediment» rule in Art 79 relieves a party from liability to perform in cases where an impediment originates from outside the party's «control sphere» («kontrollsfæren»), provided that the party in question has acted reasonably, both when «forecasting» the conditions under which the contract was to be performed - and dealing with the impeding contingency itself when it occurs. Compared to older principles of liability under Scandinavian Uniform Sale of Goods legislation (1907 Act § 24), there is much good to be said about the liability conditions explained in the ministerial proposal prp (1987). The crucial passage on whether the contingency is within or outside the seller’s risk «field» is in Norwegian CISG 1980 law inherent in the modality expressed in the word «in principle»: If the performance is adversely affected by an impediment of the kind that the seller in principle will deal with in the normal course of things, then liability for delay or lack of conformity lies with him.[89] This is meant to be something more than error, but at the same time something less than strict liability. One can overlooking the many intricate legal observation which could be made - and indeed have been made[90] - on the obscurity of the Art 79 compromise within the convention framework. However, it is hard to excuse the unbelievable intentional, negligent - or may be rather politically motivated? - omission to state clearly beyond any reasonable doubt the contents and extent of what must be conceived of as the core issue in any legislator’s - national or international - pretension to regulate a sale of goods transaction, namely: Is there or is there not basis for liability towards the buyer for damage? If the drafters of a convention cannot - or forget to - agree on an intelligible answer to this, one is tempted to ask with due respect whether it was worthwhile to spend time, expertise and public money on what might have otherwise been achieved.[91]

To this author, the obvious sound policy rationale underlying the impediment rule as voiced by the Ministry of Justice, is the shift from vicarious liability for employees to «vicarious» liability for technology, acquired IT and other machinery of the «robot» type replacing the former employees. The SGA 1988 §§ 27 and 40 places the risk for «internal» human and technical shortcomings where it belongs.[92] In some respects the Art 79 will intensify the sellers liability for delay, in others it will relieve from liability compared to former law.

Since the Art 79 bridges the former distance between contract practice and legislation, the issue now seems to be whether standard clauses of the «force majeure» model - containing words and expressions not always identical to the wording of Art 79 - will be interpreted by courts and arbitrators in the same way as the CISG 1980 and 1988 SGA provision on the matter.

f. A pending issue under Norwegian law is the selection of legal criterion for accepting «economic force majeure» as an excuse not to perform a contract - or as a basis to escape liability. The alternatives consist of the following possibilities: (a) to direct the issue to truly international law according to the directions in CISG Art 7, (b) to read the impediment principle on what are reasonable efforts to overcome the impediment as a reference to national legal tradition - or - as the case is in Norway - (c) to direct the considerations to the 1918 (1983) Formation of Contract reasonableness provision § 36, since this provisions seems to concentrate and thus facilitate the general contract law questions on frustration: When is there a justifiable cause for relieving the contractor from performing the contract in return of the agreed price? The old SGA 1907 scenario displayed in numerous mid-war cases in all Scandinavian countries the German «Unmöglichkeit» test inspiring the joint Nordic legislators by the turn of the century, which meant that up until post-war Scandinavia nothing short of financial obstacles or market changes equivalent to impossibility would excuse.[93] That is no longer the law, but it is very unclear what really is the law on the matter. The ban on domestic law development underlying CISG Art 7 (SGA § 88) may seem inadequate if no genuine international authorities emerges.[94]

g. Another challenging issue in connection with breach involving non-conformity is the question of damages, i e the basis for liability and rules on the calculation of damages to be paid by seller when the buyer is suffering economic losses.

Substantial formal changes were made in the adaptation of the CISG 1980 articles into the 1988 act, maybe not in substance, but definitely in formal respects.

CISG 1980 Art 45 provides that buyer may exercise i a his right to damages in defect and delay situations as set out in Art 74-77. The insertion of the tiny word «as» is fundamentally ambiguous; does it state that there is to be liability or does it only refer to the provisions where such basis for liability is expressed? Turning to the provisions referred to, the reader is struck with amazement. There is no authority for liability whatsoever! The articles only deal with calculation issues and provide no guidance on whether we are dealing with the common law strict «breach» concept or if something else was had in mind of the legislators. The bewildered reader’s return to Art 45 poses the question again, but this time in a binary fashion: If Art 45 is the only possible rule on when the seller incurs liability the answer, then the answer to question Is there basis for liability? must be either YES or NO. I remind the reader of the already canvassed disappointment of the meagre achievement in the 100 articles in the rest of the document if the Art 45 question does not afford an answer.

Where and how does the «impediment» principle in Art 79 fit into this picture? The rule specifically deals with failure to perform, excusing the seller in some contingent situations. But the provision does not answer the question of possible consequences of the obstacle not amounting to an impediment according to the definition.

In this situation, the combined reading of Art 45 (b), the Articles 74-77 (on calculation of loss) and Art 79 gives a shocking observation: The CISG 1980 Convention on International Sales of Goods simply fails to supply the national legislator, the actors of the trades, the lawyers and the courts of the predominant with clear answers to the two questions asked by anyone within the area of sales of goods:

(1) Is there a liability for losses caused by defects?

(2) Is there a liability for losses caused by delay?

The reason for this seems to be that the reference in Art 45 via Art 79 assumes that the «obligation» referred to is very precisely defined. That seems not to be the case. The indication of any kind of liability seems to be the wording of the Art 45, assuming that there is some kind of (common law based?) strict liability when certain obligations are not performed - as long as Art 79 does not relieve the seller. The obligations referred to seem to be stated in a common strict liability tradition in Articles 30 et seq. In the genuine CISG 1980 situation of international transaction, the fiction that a seller is obliged to deliver goods in due time and without defects may operate. The «impediment» rule in Art 79, however, worded in the force majeure format, leaves so many open-ended questions that there is no way telling plainly whether a trivial latent defect in the goods shipped to the buyer will incur liability or not.

In view of this, there may be room for forgiveness for a national legislator which, failing to ascertain liability issues from all the 100 articles of the Convention, simply prefers to legislate within the lacunas created by the Convention's «parents».[95]

In the Scandinavian acts for national sales (Finland, Norway and Sweden, Denmark excepted) delay and non-conformance are dealt with under provisions covering both situations - §§ 27 and 40. These provisions may possibly depart from the 1980 CISG, since the «impediment rule» in Art 79 by some Anglo-American writers may not to cover lack of conformity.[96]

h. The calculation of loss takes place according to principles stated in 1988 SGA § 67 (1), cf §§ 70 (1) and (2), corresponding to the «foreseeability» principle stated in CISG 1980 Art 74. Specific domestic limitations in Norwegian law as to «indirect damages» («consequential loss») are made non-applicable to international transactions in 1988 SGA § 27 (4) and § 40 (2). In fact, this means that the international principles of loss calculations are the same under Norwegian law as they were before the 1988 reform, when the distinction between «direct» and «indirect» damages was introduced in domestic transactions where liability does not involve error on part of the seller.

i. Questions on anticipatory remedies («antecipert mislighold») are dealt with in CISG 1980 Art 71-72, covering two situations: The suspension of performance due to anticipatory breach on behalf of the other party (Art 71) («tilbakeholdsrett») - and the avoidance of the contract (Art 72) («hevning»). The corresponding provisions in 1988 SGA are found in §§ 61-62, where the difference in probability should be emphasised. According to § 61 it is sufficient to justify suspension that it «becomes apparent» that the other party will not perform (§ 61 (1) «framgår...at han ikke kommer til å oppfylle»), while the requirement for avoidance under Art 72 is that it «is clear» that the other party will commit a fundamental breach (§ 62 (1) («klart at det vil inntre kontraktsbrudd som vil gi en part hevningsrett»).

The provisions represent a more thorough regulation in a field where the 1907 SGA only provided for a partial and incomplete set of rules. It is believed that the 1988 Act reflect general principles applicable in contract law, where the requirement for avoidance of contract in cases of anticipatory breach always must be fairly narrow.

Objections to the principles laid down in the CISG 1980 have come from Third World countries, advocating that the anticipatory breach regulation favours the commercial well-established Western World party to the transaction.[97]

§ 26.9. EEC Procurement Directives and Norwegian law on public contracts - tender bidding

a. Introductory remarks in the setting of a global regime for regulated public procurement

The internationally global and European community law perspective on pre-contractual activities is dominated by the general objectives to monitor and regulate in a very detailed way the step-by-step decision-making process leading up to the actual award and conclusion of public, semi-public or utility contracts with private contractors. Such overriding rules and principles have to a large extent replaced - or gained their strong impact on - previous existing national systems of the same kind for the management of public contracts. The international dimension includes generally equivalent - but in detail not conjunctive - principles adopted within World Trade Organisation (WTO) through the so-called 1994 Government Procurement Agreement (GPA), which is now about to be integrated formally into the EU and EEA procurement directive regime.[98] In a global perspective reference could also be made to the UNCITRAL 1994 suggestive model legislation on public procurement[99] as well as to the World Bank’s 1996 obligatory Guidelines for the management of contracts through procurement under IBRD Loans and IDA credit’s.[100]

The policy objectives of a strongly regulated public procurement regime are somewhat different in nature. In a Third World perspective the pester of corruptive mal-procedure may substantiate rigid rules on procedures in the spending of public money such as financing acquired through international aid schemes or IBRD loans. Discretionary autonomy for decision-makers within a public or semi-public area in dialogue and communication with private potential contractors may under given circumstances in itself induce a climate for potential corruptive counter-productive briberies. The 1994 UNCITRAL and 1996 IBRD procurement model rules and guidelines are specifically aimed at these aspects of public contracts. Similar considerations might underlie the EC community regulation, but since the issue in connection with corruption seems to be mainly affecting supervision of public state finances, national member state policies and not EC principles may prevail in this respect. The more specific WTO and community law based counter-discriminative call for international competitive tendering seems to be the underlying rationale for both EC and GPA policy principles. The main objective in these statutory regimes is to open up formerly protected internal markets for public contracts by the equalising of resident potential contractors with non-resident EC, EEA and GPA undertakings on a truly competitive basis, thus ruling out the domestic, national or regional pursuit of national preferences in these activities. In the EC/EEA context the principle of non-discrimination on national criteria is the overriding rule; in the GPA context the principle of is expressed in GPA Art III.[101] The means to reach a satisfactory practice subject to efficient review and supervision consist of mandatory requirements as to the uniform procedure for the early notice and informative advertisement of all documentation pertaining to contracts which are meant to be open for private undertakings,[102] furthermore systems for a high degree of preferably euro-standardised non-preferential technical specifications in contract documentation, transparent minute recording of step-by-step regulated decision-making process leading from selection of contract candidates through pre-qualification and suitability test procedures via qualification tests up to the final decision on which candidate among the tenderers who can offer «best value for money», either by lowest price for the object or service in demand or by otherwise submitting the economically most advantageous offer among competing candidates. Strong emphasis is put on petty formalities by regulated procedures with highly restricted possibilities to exercise otherwise normal commercial negotiation discretionary and autonomous options since the procedure is subjected to potential concurrent subsequent legal review very much in detail.

The non-discrimination principle embodied in the (consolidated) Art 12 (ex Art 6 EC) is the first of a range of provisions in the EC Treaty itself which have relevance to public procurement - such as the provisions on inner market mobility for goods - Art 28 (ex Art 30) (trade restrictions), Art 43 (ex Art 52) (right of establishment), Art 59 (ex Art 49) (free movement of services) etc.[103] In a public contract context, the provisions on trade restrictions (Art 28 EC) and free movement for services (Art 49 EC) are the most important since the contracts in question will be either a supply or a service contract within the meaning of the Treaty (construction «works» to be classified as a service in this respect). A further statutory basis for procurement is provided by a set of 6 consolidated voluminous directives, 4 dealing with procedural matters and 2 with Remedies and sanctions in the procurement area. Add to this more than 30 ECJ court cases from the early 1980'ies and a corresponding national level legal material supplementing community law sources.

The GPA provisions corresponding to EC law is found in the «no less favourable» principle stated in GPA Art III.;

«1. With respect to all laws, regulations, procedures and practices regarding government procurement covered by this Agreement, each Party shall provide immediately and unconditionally to the products, services and suppliers of other Parties offering products or services of the Parties, treatment no less favourable than:

(a) that accorded to domestic products, services and suppliers; and

(b) that accorded to products, services and suppliers of any other Party.»

The IBRD Guidelines on the issue of non-discrimination are not as restrictive as in EC and GPA law. The 1996 Guidelines Art 2.54. opens for some domestic preferences in contract awards, but always «[a]t the request of the Borrower, and under conditions to be agreed upon under the Loan Agreement...».

b. Pre-EEA procurement law, the subsequent EEA 1992 «two layer system» for public procurement - and the GPA amendments 1996

Turning now to the EEA perspective, in the pre-EEA situation, there were no specific statutory regulation on the matter under Norwegian law, but within the state sector, a set of internal regulations from 1978 set out the basic principles on the procedure for contract awarding when the purchaser was a state entity.[104] In municipal local government law (Norw «kommune»), the normal procedure would be to adopt similar provisions as in the state area. The overruling principle of acquiring «best value for money» under competitive procedures was stated both in state and local government contract awarding, including, however, rules authorising the public under certain conditions, to award contracts for district policy purposes, requiring decision by relevant ministry (Næringsdepartementet).[105]

Contract awarding within the off shore oil industry sector from the beginning of the era up until EEA 1992 fell outside the scope of the 1978 regulations, as the purchaser in these cases would be either a wholly or partially state-owned entity not being a public agency under the scope of the 1978 regulations - alternatively an operator or constellation of entities entirely outside the public sector. The only provision directly relevant was the § 54 in the 1985 (later repealed) Norwegian Petroleum Act, which in fact was a heavy suggestion of preference to domestic industry when awarding contracts for production of equipment, cf regulations June 14th 1985 No 1158 § 38. Preceding this, a principle for requiring as part of the permission that the activities would be carried out by using Norwegian goods and services. The procedures in the oil industry have in fact departed substantially from the procedures applicable in land construction law, where the «NS 3400» standard clauses has set the standards since 1972. On tender bidding in the pre-EEA off shore oil and gas industry, see Frihagen Offshore Tender Bidding (1983), but also Kolrud, Stoltz and Thomsen North Sea Offshore Construction Contracts (1979) pp 129 et seq (ENG).

The obligation to establish supremacy for community law «acquis comunautaire» expressed in EEA Agreement Protocol No 35 is reflected in the Norwegian EEA Agreement Act 1992-11-27 No 109 § 2, stating that all implemented EEA law as expressed in statutes and regulations shall prevail over other national (Norwegian) law, both preceding and subsequent EEA legislation. The 1992 implementation of the EEC law within the procurement area, succeeded by the WTO GPA (former «GATT») amendments in 1996, introduced major changes in public procurement law in some areas, less in others. The 4 procedural directives consolidated in 1992 on «works», «supplies», «services» and «utilities» («excluded sectors»), later on both the «remedy» directives for «classical» and «utility» sectors, were all implemented by legislation. The statute 1992-11-27 No 116 is a short with only 7 provisions, defining scope (§ 2) and authorising administrative regulations within each sector. The «remedy» options in the EC directives have resulted in a system for judicial review. Both remedy directives have been carefully placed within already existing legislation on civil procedure, adding a few provisions in the 1992 No 116 act itself (§§ 4-6). The rules came into force in 1994 (utilities from 1995).

Thus, there is no need to go into detail on the scope or EC threshold provisions for applicability, since these reflect basically general EU law on the matter. Worth mentioning, however, is that the EC Directives’ options for Member states have been used by Norway in these respects;

(1) Contracts awarded will not be affected by mal-procurement (1992 No 116 Act § 5 1st para)[106]

(2) Mal-procurement in the utilities’ sector (such as oil and gas industry) will not induce correction or suspension of contract award procedures (1992 No 116 Act § 5 2nd para)

For Norwegian readers, attention should be drawn to the particularly wide scope provisions of the «classical» sector directives, covering entities -

«..financed for the most part by the State, or regional or local authorities, or other bodies governed by public law, or is subject to management supervision by those bodies, or has an administrative, managerial or supervisory board more than half of whose members are appointed by the State, regional or local authorities, or other bodies governed by public law;»

as well as

«...any undertaking over which the public authorities may exercise directly or indirectly a dominant influence by virtue of their ownership of it, their financial participation therein, or the rules which govern it. A dominant influence on the part of the public authorities shall be presumed when the authorities, directly or indirectly, in relation to an undertaking:

- hold the major of the undertaking's subscribed capital, or

- control the majority of the votes attaching to shares issued by the undertaking, or

- can appoint more than half of the members of the undertaking's administrative, managerial or supervisory body;»

Within the originally excluded sectors, the «utilities» are defined in a way which goes even further. Both state owned enterprises (such as state controlled Statoil, Saga, Norsk Hydro) and non-resident operators in the industry will fall under the provision in the Dir 93/38 EC, either as public entities owned by the state or as private entities which

«...have as one of their activities [listed in No 2 including oil and gas exploitation] and operate on the basis of special or exclusive rights granted by a competent authority...»

Consequently, Norwegian offshore oil and gas industry activities - and the whole area of fabrication contracts such as the NF 92 scenario - fall within the regime of EEA regulated procurement.[107] This meant a major change in the legal position compared to the pre-EEA era.[108] Previous statutory provisions, licence practices, contracts for the industry and administrative regulations had to wipe out all remnants from the «buy Norwegian» era of the industry, in fact turning 180 degrees what had been up until then official parliamentary policy for the North Sea activities since the early 1970’ies, all as a result of the non-discrimination principle stated in EEA Art 4 and other provisions of the agreement dealing with free movement for goods and services.[109]

All EC public procurement law applies in Norway, which means that there are no significant differences between EU and EEA law on the matter.[110] Technically speaking, the EEA area includes both the last EFTA Members Norway, Liechtenstein and Iceland and the whole EU with Member States at any time.

The purpose and intention of the present EU/EEA directives regime within EEA/EU is somewhat varied. One could possible concentrate on these:;

(1) Secure non-discrimination and free movement provisions on goods and service within the total EU/EEA area by stating all public or semi-public entities to abolish national policies in their practice for the award of public contracts;

(2) Provide a transparent vehicle subject to maximum legal review for the purpose of combating potential corruptive discretionary decisionmaking;

(3) Secure sound and open means for providing «best value for public money» purchases with public spenditure.

The signing of the WTO GPA («Government Procurement Agreement») has enlarged the commitments for both EU member states and EEA. Norway signed the GPA and implemented the provisions into the existing statute public contract by amendments through law reform 1996-11-27 No 15.

Some EEA basic principles will apply beyond the procurement regime thresholds. The non-applicability of any of the formal directives does not excuse a public or a local government entity from operating award procedures which are in fact violating the EEA Art 4 non-discrimination principle nor the free movements provisions. This is not yet quite appreciated within the great number of small municipalities in Norway. Previous court cases on mal-procurement before EEA [111] are now succeeded by cases where decision-making procedures in the outsourcing of ex-public services are dealt with without applying competitive economical criteria for the award. The pre-EEA system of state regulations (1978 «REFSA» on i a «supplies») is still in existence, as is the standing «Normalinstruks» recommending local government entities to apply the state rules. Litigation is mainly seen within the local government sector. So far, no state entities or authorities has been challenged with procurement infringements in reported Norwegian cases.

c. Ban on discrimination - judicial review

The directives intensify various non-discrimination and counter-mobility aspects of public contracting much more in detail than the Treaty. Principles aiming at the overall establishment of fair and just transparent equality between candidates are found in provisions dealing with the ex ante advertising of detailed information on forthcoming contract to be expected, its exact object and extent by volume and substance, the contract conditions, the parameters for evaluation of tenderers and tenderers' bids. The reserving of actual decision-making to subsequent discretion in matters which could have been elucidated in advance is minimised. A large part of the directives' singular provisions deal with the technical specifications in order to eliminate conditions for the contract which are preferential to candidates from any particular country (and in particular that of the contracting entity). Criteria for rejecting and excluding candidates are listed exhaustively, as are criteria for authorisation, qualification and the establishment of evidence for ability in terms of skills, efficiency, experience and reliability. The zest of the directives in this respect is the splitting up of transparent succeeding fragmented part-decisions in these matters so that the final award can be narrowed down to very few, very visible and truly controllable parameters for subsequent community law review initiated by the passed-over contract candidate(s) or in serious cases of violation by the Commission (or alternatively in EEA the ESA). While the Treaty regime excludes decision-making by reference to its potential negative discriminatory or trade-restrictive effects, the EC directives’ approach as well as the GPA approach is to limit the final discretion furthermore by reference to award criteria specifically listed: In the EC context either «lowest price» or «economically most advantageous tender», in the GPA context «the most advantageous» (Art XIII para 4(b).

In contrast to regular commercial business-wise full-scale negotiation of contracts, the procurement regime within the «works», «supplies» and «services» area is firmly based on the idea of fragmenting the decision-making procedure to step-by-step elements which may be reviewed separately and therefore subject to effective supervision. The main rule is contracting by «open or restricted tender procedure», which means that one cuts down otherwise commercially preferred communication routines between the parties on how to negotiate, what to agree upon and when to assume a binding contract.[112] One could observe that pre-contractual communication on the public side is aligned with principles of public administrative law regulated decision-making. The fundamental idea is that the tenderers' price bid put next to the comprehensive tender invitation - with a minimum of clarification and explaining - will suffice for establishing the contract. Contractually, the principles of procurement procedure could be described as an advanced set of rules for pre-contractual behaviour, very much functioning as specific post-contractual standards for «good behaviour» or equivalent quality standards set for the professional performance of contractual obligations.[113]

After having proceeded through the decision-making process from defining the contract, selection of acceptable candidates in terms of qualifications, competence, skills and abilities, the ultimate decision remains as to the actual award decision. That decision does not in itself establish the contract, but the communication to the selected candidate will normally conclude a contract binding on both sides.[114] From then on, matters of dispute are taken out of public procurement law and become matters for possible contract interpretation of the notified contract conditions, standard (possibly «agreed» in the industry) clauses - or reliance on statutory provisions on the actual contract category, such as the CISG 1980 rules on International Sale of Goods.

While the Treaty and EEA provisions put restrictions on the public entity's discretionary decisions with respect to discrimination and counter-effective measures restricting community law mobility for goods, services and construction projects, all the 4 procedure directives state in an impressively positive manner a very limited range of options for criteria in the form of acceptable reasons for the final selection of the actual successful candidate in the contract award. The traditional «lowest price» award is made an optional alternative to an award based on the economically most advantageous tender. In this, the EU and EEA rules differ from the GPA regime (Art XIII.4.(b)), where the issue is to select the tender which

«...in terms of the specific evaluation criteria set forth in the notices or tender documentation is determined to be the most advantageous» -

thus leaving out the EU/EEA overriding condition that only economical parameters are relevant and acceptable.[115]

d. «The way forward» - forthcoming changes in procurement law

The law of public procurement is in the transition. The Commission’s 1996 «Green Book» on cross-roads’ policies («Exploring the way forward») invited for and received reaction from Member states. The present position is stated in the COM (98)143 final 1998-03-11 Communication from the Commission «Public Procurement in the European Union»,[116] states the agenda for the time to come. Key words on the communication are adapting rules to market changes, developing favourable environment for business, in particular SMEs and the complementing and achieving of synergy with other community policies. Reacting to criticism on «red tape» and time-consuming work in advertising TED etc, the Commission announces the introduction of electronic tendering (SIMAP=«Systeme d’information pur les Marches Publics»).[117]

Member states may still exercise national policies within the Treaty principles and the framework of the directives. The quest for a more «soft» social policies autonomy has been voiced by many, and the Commission’s answer seems to be that such policies may very well be reconciled with the procurement procedures, such as in the defining the object of the contract, its purpose, the conditions on which the contract should be performed, by statutory requirements on environmental qualities of the tenderer. However, in the final decision to award a contract to the «economically most advantageous tender», the Commission has vigorously opposed any dilution of the «classical» considerations of strictly economic, commercial, cost-effective criteria.[118]

The Norwegian legislator too, is on the move. After having gained experience with the pre-EEA and the post EEA regulated procurement within different sectors, a commission submitted its recommendations for statute amendments in a 1997 report NOU 1997:21 («Offentlige anskaffelser»).[119]

e. Transparency, review and sanctions under implemented remedy directives

The first reported Norwegian cases on refused tenderers challenging the procedures adapted by the entity originate in the 1960’ies, but it took 30 years before the issue on mal-procurement damages was litigated in Supreme Court.[120] In the years from 1994 to 1998 no less than 4 cases have been heard.

Two of the cases deal with the question of binding award of contract. In Rt. 1994.1222 («Sjøen»), the question was raised in connection with a pending award situation, in which the entity after having received and opened the submitted tenders, instructed one of the tenderers to commence a control of the contract quantities (Norw «massekontroll» under NS 3430; to ascertain correspondence between specifications and drawings). Since this was a «classical» tender procedure, no direct negotiations nor amendments in the tender bid would have been acceptable. Under those circumstances, and applying the Scandinavian 1918 Formation of Contract, the Supreme Court decided that the instruction to commence the «massekontroll» was equivalent to a formal accept of the tenderers bid. Since the entity in fact had in the meantime awarded the contract to someone else, the entity was held liable for loss of contract, amounting to appr NOK 1.2 mill. The case is generally appreciated as clarifying and in conformance with sound policies to avoid long time staggering of the procedure. In the Rt. 1997.1922 («Loddefjord Kirkegård»), the question on whether a binding contract was reached came up in a subcontractor scenario. The main tenderer communicated with a potential subcontractor in a rather informal manner, and the question was whether this de facto was a tender procedure. The city municipality of Bergen had invited for tenders for the work in question (grave yard maintenance) and recommended the invitees to collect tender bids for subcontract. The actual communication between the tenderer and its invitee did, however, in Supreme Courts opinion, not amount to a tender procedure situation. In fact, the exchange of notices on the possible work to be done was rather informal, so the question was whether the main tenderer which actually later was awarded the contract was already bound to employ the subcontractor. Supreme Court stated that the situation did not have the tender procedure ingredients and that there was in fact no legal acceptance on part of the main tenderer to employ the subcontractor. The claim was therefore dismissed.

The more remarkable case is the Rt. 1997. 574 «Firesafe» judgement, coincidentally the third case originating in Bergen on tender issues in the period 1994-1997. The facts of the case did not come under the EEA agreement since the crucial events took place just before the date when the agreement with (then) EC came into force (1994-01-01). However, the case displayed the first discussion in principle over the issue of economical loss for mal-procurement. The Norwegian legislator’s position in connection with transposing the two Remedy» directives, Directive 89/665 EEC and Directive 92/13 EEC [121] for «classical» and «utilities» sectors has been that case-made law at least in the «classical» sector was not changed by the EEA arrangement [122] so consequently, the «Firesafe» case carries bearing on the Norwegian assumption that the law will apply equally to EEA tender bid procedures.

The facts of the case were simple: The municipality of Bergen invited for tender bids for fire securing installations in publicly owned facilities. The contract documentation carried an apprentice clause normal for the 1980’ies, committing the contractor to operate under a frame agreement with the Norwegian state, allowing for state subsidised apprentice employment. After opening the bids, it turned out that the lowest bid came from one firm which did in fact not operate under the state apprentice arrangement. In spite of this, the contract was awarded to this tenderer. Six competing candidates challenged the decision, invoking a breach of the tender procedure rules set up by the municipality and claiming damages. The case succeeded in city court. All six tenderer were awarded costs for having prepared their bids, trusting that the entity would stick by his own rules. Supreme Court rejected these claims. The decision is based on a line of causation reasoning, the Supreme Court stating that under 1980 market conditions, any tenderer would have participated in a competition for public contracts, whether or not the entity in question would have played by the rules or not. Admitting some leniency in the general approach to the matter of burden of proof on part of the unsuccessful tenderers in view of the fact that there was a clear and manifest infringement of procedure, the Supreme Court still had to accept that the line of causation was broken. The claims were consequently rejected.

The «Firesafe» case raises a number of procurement law issues. Under a Norwegian perspective, it suffices to observe that the Remedy Directives 89/665 EEC undoubtedly leaves matters of calculation of loss - possible also the issue of range of protected interests - to national law. In this respect, the «Firesafe» decision clarifies the legal position in view of a great number of reported Norwegian pre-EEA subordinate cases, namely to award damages for «negative interest» costs without really appreciating the basic requirements for causation even in mal-procurement.[123] On the other hand, the succeeding «Remedy II» directive expressly departs from causation requirements by accepting (a) a breach and (b) the infringement affecting the chance of the tenderer in question (not requiring actual loss of a contract which would otherwise have been awarded). So one must ask: Is not conceivable that the Remedy II Directive stands for the later more sophisticated true view of the Commission on matters of award of damage in cases of mal-procurement? If so, why persist in having two formal set of rules for procurement, one for «classical» and another for «utilities»?

In this author’s view, strong policy principles support the «Remedy II» approach, leaving considerable flexibility on the causation issue. The title of both remedy directives indicate that deterrent considerations are of essence, and that mal-procurement generally should carry economical consequences. Contrary to the situation in competition law, where policing of the rules is made an administrative task for the Commission and the ESA, the public procurement monitoring is put into the hands of the private parties contesting the decision-making from case to case. In view of this, the «Firesafe» decision seems to underestimate the danger that in fact market conditions will decide whether or not infringements of the rules will carry sanctions with it or not. To put it directly: In a buyer’s market the temptation to exploit the negotiating position of the entity the violations of procurement procedural principles will not lead to damages, following the «Fireside» reasoning. In times when market is more favourable to the «sellers», there is no temptation to brake the rules.

In Commission’s 1998 Communication, the possible simplification of the directives is put on the agenda. One of the issues which in this author’s view should be taken up for consideration, is the need to state more clearly whether Member state national law principles implicitly referred to in the «classical» sector Remedy directive, like the one applied in the Norwegian 1997 «Firesafe» case, is really in line with the advocated need for a more effective policing set-up of regulated public procurement.

The latest Supreme Court case is the «Torghatten Trafikkselskap» judgement 1998-09-22, awarding a passed-over domestic North Norwegian company full compensation for loss of a concession awarded according to procurement rules expressly selected by the regional public county entity in a north-western part of Southern Norway. The apparent commercial considerations under the «most economical advantageous» award decision made by the awarding entity involved a preference for a slight speed advantage offered by the local resident undertaking, reviewed and declared illegal by Supreme Court, which pointed to obvious and apparent commercial and economical advantages to the competing non-accepted offer. The case deals with the intersection between public administrative law and procurement law in the granting of licences and concessions, and must be read to assume that the award of a public concession as such - under present Norwegian law - is not directly covered by procurement law. In casu, however, the award procedure was decided by the entity as being a procurement procedure with mixed cumulative public administrative and procurement ingredients. The award of loss included probable profits and income on part of the claimant, deducting certain savings (dissenting opinion on the issue of loss calculation).

§ 26.10. Interlegal issues: Proper venue and jurisdiction, choice of law. Recognition of judgements and arbitration awards.

a. Civil procedure jurisdiction options - Lugano 1988 Convention

The question of jurisdiction and venue is not dealt with in CISG 1980.

General rules on proper venue are found in the 1915-08-13 No 6 Norwegian Civil Procedure Act §§ 17 et seq (Chap 2). Litigating international contract disputes, the venue fora of particular interest may be the place of fulfilment of written obligation (§ 25), place of business for branch or subsidiary office (§ 27), place where respondent possesses values of any kind («tooth brush» - «tannbørsteverneting») § 32,[124] venue in joint liability cases (as i a bank guarantees securing contract performance or payment) in § 33.

Contracts for settling jurisdiction are recognised under Norwegian law, provided that such contract is not violating mandatory law (i a in consumer area) or appear totally unacceptable under the principle of «ordre public»). The Norwegian term «vedtatt verneting» in § 36 means within certain limits recognition of private contract autonomy in jurisdiction matters - (Norw «jurisdiksjons-» eller «prorogasjons»-klausuler).

Proper venue is of limited value unless the foreign party in question can be made subject to legal judicial debt collection (Norw «tvangsfullbyrdelse»). Rules on debt collection and enforcement are found in the 1992-06-26 No 86 Act on Enforcement («tvangsfullbyrdelsesloven»).[125]

Within community law, however, the law is strongly influenced by conventions which are of great practical importance. The 1968 EEC Convention on Jurisdiction and the Enforcement of Civil and Commercial Judgements deals with the relationship between EC member states and is as such of lesser importance to the non-EC Scandinavian countries.[126] The 1988 Lugano Convention on the other hand, deals with multilateral international jurisdiction involving the EFTA countries and is highly relevant in international sale of goods law involving Scandinavian parties on either side. Brief comments on the 1988 Lugano regime and its implication in sale of goods law should be made.[127]

The 1988 Lugano Convention has a double objective; settling international jurisdiction in civil and commercial matters involving parties from EEC and EFTA countries - and securing recognition and enforcement of court decisions thus passed.

The venue and jurisdiction issues are regulated in Title II (Art 2-Art 24).

The nominal main rule states that a party’s domicile forms a proper venue under the Convention. This coincides with Norwegian Civil procedure Act § 18. As mentioned, provisions like the Norwegian Civil Procedure Act § 32 are ruled out by Lugano Art 3.

Lugano authorises specific jurisdiction contracts or clauses («prorogation») (Art 17). Such clauses are traditionally valid and enforceable under Scandinavian law, at least as far as issues are not subject to mandatory provisions within the consumer area or otherwise.[128]

Specific provisions for proper venues in specific areas are given in Art 5., where the contract venue alternative is of major importance in transborder sale of goods disputes. A party may be have to take an action in the place where the contract is to be performed, be it the obligation to deliver or the obligation to pay for delivery.

Rt. 1996. 25 «Alumix»; action for payment was raised in connection with the unpaid export shipment of chemical products to Italy. The Italian importer turned insolvent and bankruptcy proceedings were commenced in Italy. Payment was admittedly to take place in Oslo; consequently the place of performance of buyer’s obligation was initially located under Norwegian jurisdiction, and the main rule in Art 2 might be thought to apply. However, the Lugano Convention has a positive exception in Art 1 2nd para (2) on bankruptcy, and the defendant invoked this provision to have the case dismissed. Supreme Court dismissed the claim, pointing to the inconvenience of having to deal with matters in connection with the payment closely linked to the Italian bankruptcy proceedings, such as the civil effect of bankruptcy filings on pending contracts and claims for money etc. There were some questions on the relationship between the Lugano Convention and the Norwegian Civil Procedure Act. The majority of the judges decided that the EEA supremacy principle extended to the Lugano regime, and refused to solve the venue issue according to provisions in the Civil Procedure Act which might otherwise have allowed for jurisdiction (§ 25). The «lex specialis» doctrine was applied so as to give supremacy for the Convention (which does not fall under the special provision on general EEA supremacy for all EEA law (1992-11-27 No 109 Act § 2) since the Lugano is not as such part of «acquis Communautaire» referred to in the said provision). Reference in the judgement is made to the ECJ Case 133/78 Gourrdain vs Nadler [1979] ECR 733, where the Court elaborates on the similar provision in the Brussels 1968 Convention for EU states. The minority in the «Alumix» case (2 judges) disagreed on the question of identity of the Italian party, since the «Alumix» itself was only a subsidiary in a concern where the holding company («EFIM») went bankrupt.

For consumer contracts [129] Lugano has specific provisions in Art 13-15, preventing any other venues than the consumer (purchaser’s) domicile, including the contract performance venue just mentioned. The consumer venue under Lugano (in particular the exclusion of seller’s domicile venue being the place of contract performance) is mandatory and is not subject to contract regulation. So is the domicile jurisdiction of the consumer in cases where seller brings an action against buyer (i a for failing payment) (Art 14 2nd para).[130]

The payment under Norwegian 1939-02-17 No 1 § 3 is in general assumed to take place at creditors place («Bringschuld»), which literally read might mean that the buyer acting as debtor may be sued in the country of the seller (exporter). This might apply to non-consumers falling outside the Lugano protective provision cited in the text? The far better solution is found in Danish law, where express provisions except monetary claims («betalingsforpliktelser») from the scope of Danish Civil Procedure Act («rettergangslov») § 242 on place of payment as basis for proper venue, corresponding to Brussel 1968 Civil Judgements Convention Art 5 nr 1, cf Gomard Civilprocessen (4 ed 1994) s 79 and J Lookofsky UfR 1994.B.428 (commenting on UfR 1993.802 DaHR) (SC). The expected bank law reform in Norway might lead to a change in this; the draft on payment transactions contains a provision which will state that consumer debt in general is to be considered paid in due time if the bank transaction payment order is within the time limit («når betalerens oppdrag er mottatt av institusjonen») - NOU 1994:19 draft Act on finance contracts and finance services («Finansavtaler og finansoppdrag») § 2-31. A provision like the suggested one will bring statutory law more in line with the Lugano contract venue principles since each obligation should be considered separately in the reading of the Convention. Reference should be made to EEA «pipeline» European Parliament and Council Directive 97/5 27.1.1997 on cross-border credit transfers [1997] O J L 43/ 25.

The contract performance venue under Lugano Art 5 relates to the place of delivery under a sales contract. The Convention states in Art 31 as the main rule that delivery takes place at sellers place of business (as does 1988 SGA § 7) and that the handing over to a carrier represents delivery in the case of transportation (Norw «sendekjøp» - § 7). Under transactions governed by INCOTERMS 1990, the chosen clause will identify the place of delivery relevant to Art 5. But in cases where contractor is to perform at buyers premises, the place of performance will be buyer’s country.

A practical rule covering guarantee obligations in contract matters is the Lugano Art 6 no 2, enabling any party to sue the issuer of a warranty or guarantee obligation in the court seized with the original proceedings, either for contractor’s obligations or for the obligations of the buyer. Similar practical rules are given in respect of set off and counterclaims (Lugano Art 6 no 3).

b. Choice of law issues - «closest link» principle - EC 1980 Convention on applicable law to contractual obligations - The Hague Convention 1955 on choice of law in international sale of goods

Turning now to the choice of law issue in international sales transactions, one should note that under the regime of the CISG 1980, the traditional choice of law issues have become of much reduced importance as long as both seller’s and buyer’s land are CISG 1980 members. As long as the contract in question is of a genuinely international nature, the 1980 Convention shall apply as enacted, subject to rules of interpretation specifically set out in Art 7. Even outside the scope of the Convention, the parties may «contract in» the provisions of the Conventions, either in part - or en bloc.

This means that in EEA/EU trade most transactions will be subject till CISG 1980 (excluding UK, which is not a CISG 1980 member).

CISG 1980 Art 1 (1) provides that the Convention shall apply not only when the parties have their place of business in different Contracting States, but also when the rules of private international law lead to the application of the law of a Contracting State.

The choice of law issue consequently seems to be the question of which jurisdiction is to apply the CISG 1980 rules.

Outside the CISG 1980 regime - i e where the non-Norwegian party to the contract does not have his place of business in a Contracting state - and the provision in Art 1 (1)(b) does not apply - the choice of proper law could prove essential: If Norwegian law is to apply, this would mean application of the SGA 1988 Chap XV, whereas the situation would be different when Norwegian law is not to apply, i a where the contract deals with the import of goods from a non-CISG 1980 country with material rules different that CISG 1980.

The EU 1980 Convention on the Law applicable to Contractual Obligations, signed Rome 19.6.1980,[131] is not a part of the «acquis Communautaire» to be implemented under the EEA Agreement. Norway is not a member of this Convention.

Norway has, however, ratified the ULIS Hague 1955 Convention on choice of law in international sale of goods matters, cf Act 3.4.1964 nr 1. Consequently the principle of autonomy (§ 3) is supplemented with the principle of applying the law in the state where the seller has his business or alternatively residence (§ 4).

The application of the statutory rule is limited to the sale of goods element of the contract. When the rest of the contract deals with agency or distributorship, then the question of choice of law is considered under the so-called «Irma Mignon formula», set by Norwegian Supreme Court in Rt. 1923.II. 58, stating that the case - short of specific provisions in law or contract - will fall under the legal system to which the dominating elements of the dispute are pointing, see as recent illustrations Rt. 1980. 243 (NDs 1980. 116) and Rt. 1982.1294 (NDs 1982. 343). Third party disputes, i a disputes with creditors and holders of lien («salgspant»), will fall outside the scope of the 1964 Act. Lex loci will normally apply, RG 1958. 646 Oslo, RG 1963. 528 E, NJA 1985. 879 (stoppage in transit), cf a series of Danish cases on non-recognition of German and French exporters' lien clauses in sale contracts with Danish importers, such as UfR 1983. 311 DaHR, UfR 1984. 8 DaHR, UfR 1987. 766 DaHR. See also Sandvik-Krüger-Giertsen Norsk panterett (2nd ed 1982) p 434 (SC). A forthcoming book on interlegal choice of law issues in the law of securities in movable chattels will be published 1999 (B E Reinertsen Konow, University of Bergen). (ENG summary). («Løsørepant over landegrenser»).

The 1955 Hague Convention 1955-06-15 on Law applicable to International Sales of Moveable Corporal Objects (mentioned above) is expressed in a 1964 statute (1964-04-03 No 1) and is effective Norwegian law, leaving two main alternatives, either the parties’ autonomous choice or the law of the land of the seller. As mentioned already, the 1986 Convention on the Law Applicable to Contracts for the International Sale of Goods has not yet entered into force. This rules direct disputes to be solved under law of the seller’s land (Art 3) when the contract does not rule otherwise.[132] The EC 1980 Rome Convention on the Law applicable to Contractual obligations was not made part of the EEA Agreement and is not effective in Norwegian law.[133]

In community law, the Rome 1980 Convention On the Law Applicable to Contractual Obligations yields to other international conventions (Art 21). This means that the 1955 ULIS Convention as embodied in the Norwegian 1964 act prevails over the 1980 Convention, and will still prevail of Norway is subject to EEC «acquis communitaire» one way or the other. It should be noted, however, that 1955 ULIS Convention covers even certain formation of contract issues (with exceptions in Art 5), where the EEC 1980 Convention assumes the existence of a valid contract obligation.

The 1980 EEC Convention points partly to autonomy solutions (Art 3), partly to solutions based on broad considerations on the merits of the case (Art 4), equivalent to the Norwegian 1923 «Irma Mignon» formula voiced by Supreme Court in Rt. 1923.II 59. The Convention prescribes consumer protection by stating that mandatory regulation in consumer sales cannot be avoided by choice of law clauses invalidating such regulation effective in the country where he has his habitual residence (Art 5). In cases involving real property lex rei sitae is prescribed (Art 4 No 3).

The 1980 EEC Convention is not part of the EEC «acquis communitaire». New members states would have to ratify the Convention separately. Norway has not.

c. Recognition and enforcement

Court decisions in disputes between Norwegian and non-Norwegian parties raise the question of recognition and enforcement.

Court decisions in non-Norwegian jurisdictions will not achieve recognition in Norway - and can not be enforced as such - unless the jurisdiction in question is covered by a bi- or unilateral agreement on such recognition and enforcement (tvfbl § 3 nr 10). In matters relevant for sales disputes Norway has made agreement with other Scandinavian countries, with England, with (former West and East) Germany and Austria. Short of such agreements, there would be no per se mutual recognition of court decisions in disputes between seller and buyer.

The question of recognition and enforcement within the EC area is covered both by the 1968 Brussels Convention on Jurisdiction and the Enforcement of Civil and Commercial Judgements 27 September 1968 and by the 1988 Lugano Convention on Jurisdiction and the Enforcement of judgements in civil and commercial matters 16 September 1988 (88/592 EEC Title III Sect 1 (Recognition) and Sect 2 (Enforcement). The Lugano Convention will cover matters within the framework of a treaty between the EFTA countries and EC.

d. Arbitration awards in international sales transactions

Provisions on arbitration are included in the 1915-08-13 No 6 Civil Procedure Act («lov om tvistemål» often abbr «tvml»)[134] Chap 32 (§§ 452 et seq.[135]

Norway is a member to the 1958 New York Convention, stating global enforcement of arbitration’s awards, provided that the formal requirement are satisfied, in particular the existence of a proper agreement in writing (tvml § 452 2nd para; «Voldgiftsavtalen maa indgaaes skriftlig»). In Norwegian practice, the «writing» requirement means that a standard printed form containing an arbitration cause is not enough; the writing must reflect the actual intention of the parties of the dispute. However, a written reference to a printed form containing an arbitration clause (as the case most often will be in the construction contracts, shipbuilding and fabrication contracts with agreed standard forms) will suffice.[136] Numerous cases have been heard in the Supreme Court on validity and scope issues the last decades.[137]

The Norwegian law on arbitration is based on the assumption that accepting an arbitration procedure means denouncing from the protection of the regular court system. An arbitration award is a «one shot» final decision with equivalent executory effects as a civil judgement. Only very grave formal shortcomings will allow the loosing party to have his case tried a second time before the regular courts (tvml §§ 467-68).

The Chap 32 of the civil code states some framework rules and principles for arbitration, but the actual conducting of the procedure is very much left to arbitrators’ discretion, sometime raising the question of whether the parties may agree in a way which is binding on the arbitrators (tvml § 459).[138]

Many standard forms contain arbitration clauses. In consumer disputes, the use of arbitration is generally not acceptable and attempts to prevent the consumer from normal court litigation would most probably be set aside applying the § 36 of the 1918 Formation of Contract Act explained supra. In the commercial area, however, arbitration clauses are often applied in both domestic and international disputes.

Within the maritime and oil industry area, arbitration awards are normally published with the parties’ consent. It may happen that the parties oppose this, and at some instances, where the issues of the case is of great interest to the law community, a compromise might be to publish parts of the award, for instance the arguments by the arbitrators.

The issue of legal significance of arbitration practice in general contract law has not been settled in Norwegian law. There are slightly differing opinions on the matter, some advocating restriction since the arbitrators are not professional judges, others point to the often very high degree of technical and legal expertise in the arbitration panel, reflected in the careful and thorough wording of the award reasons. The issue will in fact have to be dealt with as a question of whether it is good or bad that major issues are channelled out of the regular legal system. This author’s opinion is that arbitration practice illuminate current issues in connection with widespread standard contract forms and that there can be no objections of putting the same emphasis on published awards as one would allow for other commercial customary practice, cf the reference in SGA 1988 § 3 and CISG 1980 Art 7, which could be read as a recommendation to put emphasis on for instance the ICC international arbitration awards.[139]

Up until the Lugano regime 1993, the international New York Arbitration principles were the only way to achieve international enforcement machinery. Provided the arbitration award satisfied the conditions set up in the Convention, the award enjoyed «free movement» world-wide effects in all New York Member states.[140]

After Lugano, this privilege must now be shared with the EEA/EU Convention regime. Provisions on recognition and enforcement in other Lugano jurisdictions are found in Articles 26 et seq and Articles 31 et seq.

Many international sales of goods transaction are made subject to arbitration clauses, for instance pointing to «third country» arbitration or to institutional arbitration systems like the ICC Rules of Conciliation and Arbitration.[141]

Norway is party to the 1958 New York Convention.

One objective of that convention is to secure recognition and enforceability for arbitration awards which satisfy formal requirements set out.[142] Arbitration awards in sale of goods contract disputes would consequently more easily receive recognition than court decisions.[143]

The provisions on validity of arbitration clauses are found in the Code on Civil Procedure (1915) § 3 nr 10, which states formal writing as a requirement for such agreements. The jurisprudence on the matter shows that standard arbitration clauses in sales agreements will normally be accepted. Arbitration clauses pointing to jurisdiction would normally be interpreted to mean choice of lex fori.[144]

The Norwegian Arbitration system is based on the assumption that courts are not to deal with disputes subject to valid arbitration clauses. The conditions for subsequent legal recourse to courts in respect of allegedly wrong arbitration awards is high (Civil Procedure Act 1915 §§ 467-68).[145]

Arbitration awards of principal importance may receive public attention by i a inclusion in law reports etc. In Norwegian law reports, one will find selected arbitration awards both of domestic and international nature reported both in Rt. (Norsk Retstidende), in RG (Rettens Gang) and in ND (Nordiske Domme i Sjøfartsanliggender - maritime law cases including sale of ships disputes, shipbuilding and offshore fabrication contract arbitration awards).[146] Many such arbitration’s are referred to as source material in other places in this book.

Cases of interest are for instance the «Kull og Vedbolag» award 1941 regarding frustration through «economical force majeure» in a Canadian-Norwegian joint venture-flavoured contract on the sale of nickel (Rt. 1951. 371), the «Esso» award 1976 regarding impact of sudden rise in oil prices in long term contract involving a multinational oil subsidiary and a local municipality (Bergen) as buyer (RG 1976. 650), the 1975 «Reksten» award regarding cancellation of shipbuilding contract due to general international fall in market (ND 1975. 298), the 1979 «Wingull» arbitration on damage for malfunctioning ship machinery, ECE 188 Guarantee Clause Art 9 reviewed) (ND 1979. 231), the «Trans Tind» arbitration award ND 1984 pp 404 et seq regarding serious defect responsibility, and the «Anahitra» arbitration award (French subcontract dispute concerning allegedly overweight non-conformance machinery for catamaran speed vessel designed for use off the African coast) (ND 1987. 216). 

Norwegian parties will in many cases be subject to arbitration disputes in other countries, such as Paris ICC. There seems to have been done no systematic efforts by Scandinavian legal scholars to analyse the structure or outcome of such cases, at least not within the law of sale of goods.[147]

§ 26.11. ICC impact on international sales. INCOTERMS 1990, 1993 UCP 500 etc. 

a. Scandinavian Supreme Court law reports display few annual cases dealing with international sale disputes, partly due to the fact that many of these disputes will be subject to arbitration clauses, partly because INCOTERMS and other legal improvements in the legal framework have reduced the need to litigate, partly because of increasing tendency to reach amicable settlements in contract disputes thus avoiding litigation.

Pre-war Norwegian law reports display a number of cases. Many of these deal with risk and risk distribution in connection with the outbreak of First World War (export and import restrictions etc).[148]

Others are concerned with problems which are now settled in connection with the ICC standard trade terms and documentary routines.[149]

b. ICC INCOTERMS 1990. International Chamber of Commerce (headquarters Paris, local branch offices like ICC, Oslo) has developed clauses and contract routines for supplementing conventions and national legislation. The ICC has since 1936 published standards for the interpretation of trade terms in international contracts, the INCOTERMS (present version 1990), ICC 1993 Uniform Customs and Practice for Documentary Credits (1993 UCP 500). ICC has also published terms available for inclusion in otherwise applicable contracts, such as the ICC Force Majeure (exemption) clause [150] and the ICC Arbitration Clause (referring to ICC Rules of Conciliation and Arbitration) commented on supra..

The 1907 SGA §§ 62 et seq had a few provisions on the interpretation of trade terms in export and import contracts («fob», «cf», «cif» and «franco»). A few cases turn on the interpretation of these provisions.[151]

The statutory provisions on the interpretation of these terms were abolished in the 1988 SGA, mainly because the interpretation of such clauses is better suited to the ICC framework. The updated INCOTERMS 1990 represent a more diversified system for trade terms and have through successive revisions been adjusted to modern communication and transportation technology. In practice, the express or implied reference to ICC INCOTERMS turned out to be a more practical situation than the adopting of the 1907 provisions. The latest revision in 1990 supplements the 1980 CISG.

The subject of the INCOTERMS is basically to regulate the functions between the parties in connection with the despatch of goods from one country to another. The clauses will state which party is to do what, cost arrangements and risk distribution in connection with possible loss and damage to the goods in transit. Evidently, the INCOTERMS system is important for establishing a system for insurance, documentation for honouring of documents in payment transactions etc.

The 1990 revision of the trade terms had two main objectives.[152]

First, to adapt the terms to the expected rise of Electronic Data Interchange (EDI) in stead of traditional paper-based negotiable documentation (Bills of Ladings, Invoices etc). The introduction of EDI is not an INCOTERMS issue, but is based on Comité Maritime International (CMI) «Rules for the Electronic Transfer of Rights to Goods in transit» in two versions (both 1990): CMI Uniform Rules for Sea Waybills and CMI Rules for the Electronic Transfer of Rights to Goods in Transit. The 1990 version of INCOTERMS is made adaptable to forthcoming systems and procedures in this sector. The typical provision will be like the A.8. last para:

«Where the seller and the buyer have agreed to communicate electronically, the document referred to...may be replaced by an equivalent electronic interchange (EDI) message, NORDIPRO CompLex 1983/ 10, Lando-Laudrup-Theilgaard INCOTERMS 1990 (1990) pp 13-14, 131-32, 167-68, Galtung Paperless systems and EDI, Complex nr 4/91 (Teresa (80), Grönfors SG 90 (1991) pp 63 et seq.

Second, to adjust the trade terms to changed multimodal transportation techniques such as containerisation, roll-on-roll-off traffic etc. A dominant feature in the total picture is the general down-grading of the conventional ocean On Board Bill of Lading.

Some of the trade terms are neutral as to mode of transportation (EXW, FCA, CPT, CIP, DAF, DDU, DDP). The FCA clause is suited to Air or Rail Transport, while Sea and Inland Waterway Transport should be based on either FAS, FOB, CFR, CIF, DES or DEQ respectively.

The organisation of the 13 terms currently included follow functional criteria:

Group E-term is the EXW (Ex Works), the only terms whereby the seller makes the goods available for delivery at seller's own premises.

The Group F-terms are used when seller is called upon to deliver to a carrier appointed by the buyer (FCA Free Carrier), FAS (Free Alongside Ship) and FOB (Free On Board).

The Group C-terms include terms where the seller has to contract for carriage, but without assuming the risk for the goods in transit (CFR (Cost and Freight), CIF (Cost. Insurance and Freight), CPT (Carriage Paid To), CIP (Carriage and Insurance Paid To).

Finally, the Group D-terms include terms whereby the seller bears all costs and risks needed to bring the goods to the country of destination (DAF Delivery at Frontier), DES Delivered Ex Ship), DEQ (Delivered Ex Quay), DDU (Delivered Duty Unpaid), DDP (Delivered Duty Paid).

c. The interaction between documentation routines, insurance arrangements and the international transport and maritime law rules on liability for goods in custody of shipowner, air transport or freight forwarder is complexed.[153]

d. The most practical issue in connection with the execution of international delivery commitments is the question of securing prompt payment. Since payment in most cases is carried out by bank, it is evident that the banks have established systems for practical needs.

The bank may commit itself to collect payment on behalf of the sellers.

Banks may also participate by way of separate commitments, out of which the commercial letter of credit is by far the most established. A letter of credit commits the participating bank to honour documents of a said identification upon presentation.

Rules on commercial letters of credits are found in the UCC, but internationally, the ICC Uniform Customs and Practices (UCP) prevail.

A commercial letter of credit is issued by the opening bank, stating that the bank will honour documents presented when these documents are in accordance with customers specific instructions and rules set of in UCP 1993.[154] The letter may be revocable, in which case the opening bank may be instructed by the importer to withdraw the statement. The opening of a letter of credit assumes the participation of several banks, and the bank which actually honours the documents on behalf of the opening bank could by itself have confirmed the opening of the credit, in which case the confirming bank will be responsible directly towards the beneficiary. The UCP 1983 deals with the exact requirements to documents which will be honoured in lack of further instructions by the customer.

Securing international transaction may also be done by way of guarantee statements by public, semi-public or private parties. In Norwegian trades, the GIEK will often participate by guaranteeing the execution of the transaction.

A much debated issue is the issuance of stand-by letters of credits and guarantees as is the «deferred payment» letter of credit. In this field, both ICC and UNCITRAL have been active.[155]

The provision is applicable in commercial contracts and there are no formal restriction as to international relations.

§ 26.12. A side-step for resident non-Norwegian consumers: Norwegian consumer purchase law - basic elements

a. General remarks on consumer protective legislation in Norway and alternative avenues to legal aid in claims and disputes

Under the 1992 EEA Agreement [156] with EU, Norway has throughout the last decade transposed a number of EC directives on consumer protection into Norwegian legislation.[157] The list displayed supra under § 26.5. will provide the necessary references to statutory provisions in «Norges Lover», which is an annually published complete collection of all Norwegian statutory law, arranged chronologically, obtainable through regular book stores. Unofficial translations of the Act exist.

Information and free advise in case of disputes with a dealer or other person/undertaking which has rendered service can be obtained by approaching one of the following:

b. Consumer protection in sales of goods law and else - a survey

The topic of this book is the purchase of goods, regulated in statute «Lov om kjøp» 1988-05-13 No 27 or alternatively (damage or personal injury) provisions on product liability «Lov om produktansvar» 1988-12-23 No 104, on voluntary withdrawal from certain doorsale contracts etc for the purchase of goods and services «Lov om angrefrist» 1972-03-24 No 11, credit purchase of goods «Kredittkjøpsloven» 1985-06-21 No 82 (instalment contracts and long financed purchases through seller or seller’s finance arrangement offered to the customer («triangle parties finance of purchase»).

Statutory protective legislation of the mandatory nature (can not be departed from by individual or standard contract forms) exist within most consumer areas of law, the most important being: «Husleieloven» 1939-06-16 No 6 on rental of private apartment (law reform Ot prp nr 82 (1997-98) expected 1999), «borettslagloven» 1960-02-04 No 2 on co-operative housing and «eierseksjonsloven» 1997-05-23 No 30 on joint property ownership housing (seksjonering), «Avhendingslova» 1992-06-26 No 86 on the purchase of house and land, «Lov om eiendomsmegling» 1989-06-16 No 53 on real estate brokers, «Bustadoppføringslova» 1997-06-13 No 43 on the purchase of apartment under production or construction contracts for the erection of private homes or leisure homes, «Forsikringsavtaleloven» 1989-06-16 No 69 on (i a consumer) insurance, «Håndverkertjenesteloven» 1989-06-16 No 63 on contracts for services not amounting to sales, such as automobile service or repairs, artisan work etc, «Pakkereiseloven» 1995-08-25 No 57 on charter «package» trips sold by charter operators. A comprehensive law reform on banking services (loans, guarantees, investments etc) is expected 1999 (NOU 1994:19), but already present legislation contains certain provisions on (a) required disclosure of terms, interests etc and on consumer’s rights in cases of (b) premature termination of bank loans (lov 1998-06-10 No 40 om finansieringsvirksomhet § 2-12a).

Three statutes of a general nature should be mentioned at last: The 1918-08-31 No 4 Act § 36 on measures against any contract or contract clause with an unreasonable effect, consumer or otherwise - and the 1976-12-17 No 100 on late payment interests to be paid in contract relations or otherwise, both binding on the consumer as a private debtor (did not pay on time for the service or goods) and granting any private person in private matters of late payment owed to the person. Professional debt collection has been regulated in statute 1988-05-13 No 26, containing several mandatory protective provisions to the benefit of the debtor.

c. Select basic elements of consumer protection in the sales of goods area

Taking a claim dispute over alleged defects («lack of conformance») in the products purchased as a point of departure, the tabloid short version of mandatory provisions in the 1988 Sales of Goods Act (SGA) looks approximately like this (assuming the supplier is a professional and not a private person; in the latter case the statutory provisions are not mandatory):

(1) If supplier is not willing to repair or replace, the customer may as a main rule demand him to do so free of costs (but the option on which of either is the supplier’s so the customer is not entitled to just pick another item in stock) (SGA § 34)

(2) Demand reduction of the price by refund or otherwise, reflecting the relative loss of value in the product («prisavslag» SGA §§ 37-38)

(3) Substantial defects in the product, including constant or repeated failures to detect the origin of mal-function (such as mysterious leakage sometimes present in new automobiles) - or to have it rectified within reasonable number of attempts, will entitle the customer to terminate the contract, claim a refund (with interests SGA § 71). A termination notice of the contract can not be met by another offer of replacement or transfer to other products in supplier’s stock («bytte»). (SGA § 37 (1))

Rules on defects in the purchase of second hand articles such as automobiles, pleasure crafts, furniture etc state that even if the assumption may by that a buyer must carry the risk of inherent detoriation due to age and wear and tear, there will always be a defect if:

(1) Seller’s description of the article is incorrect, such as stating an automobile mileage at 120 000 km when the truth (whether known to the seller or not) is that the actual mileage is the double.

(2) The sellers fails to disclose information which could reasonably be expected by the buyer

(3) The object of the purchase turns out to be in a substantially worse condition than could reasonably be expected, considering the price and the circumstances.

(SGA § 19)


CONCORDANCE

Provisions of CISG 1980 transposed to Norwegian Sale of Goods Act [SGA] (kjl) 1988-05-13 No 26

CISG 1980 Norw SGA 1988

PART I

Art 1

(1) kjl § 5 (1) and § 87

(2) kjl § 87

(3) kjl § 87

Art 2

(a) kjl § 5 (3)(a), cfr § 4 (1) and (2)

(b) kjl § 5 3 (b)

(c) kjl § 5 (3) (c)

(d kjl § 5 (3) (d) (inaccurate)

(e) kjl § 5 (3)(e)

(f) (no corresponding provision in SGA 1988; ministerial preparatory assumption that SGA 1988 does not apply to supply of electricity)

Art 3

(1) kjl § 2 (1)

(2) kjl § 2 (2)

Art 4 (Formation of contract and third parties’s disputes not dealt with in SGA 1988 except for direct action claims provision in kjl § 84 - Norway has made a reservation as to CISG 1980 Part II)

Art 5 (statement in SGA 1988 preparatory works on non-applicability of SGA in cases of personal injury)

Art 6 kjl § 3

Art 7

(1) kjl § 88 (1)

(2) kjl § 88 (2)

Art 8

(1) kjl § 89 (1), cfr § 3

(2) kjl § 89 (1), cfr § 3

(3) kjl § 89 (2), cfr § 3

Art 9

(1) kjl § 3 and § 90

(2) kjl § 3 and § 90

Art 10 kjl § 83

Art 11 kjl § 91 (1)

Art 12 kjl § 92

Art 13 kjl § 93

PART II

[Arts 14-24] CISG 1980 Part II not transposed as all Nordic countries have made a reservations under Convention Art 101 (1)

PART III

Art 25 kjl § 94, cfr §§ 25-26, 39, 54-55

Art 26 (no direct transposition - cfr kjl § 64)

Art 27 kjl § 82

Art 28 kjl §§ 23, 34, 52, 53 in conjunction with 1915 Civil Procedure Act § 53 and 1992-06-26 No 86 Act on Enforcement Chap XIII opens - as a main rule - for judgements («fullbyrdelsesdom») and enforcement of specific performance («tvangsfullbyrdelse av krav på annen enn penger») of seller’s and buyer’s non-pecuniary obligations under Norwegian law.

Art 29

(1) kjl § 91 (2)

(2) kjl § 91 (3)

Art 30 (no direct transposition)

Art 31

(a) kjl § 7 (2)

(b) kjl § 6 (1)

(c) kjl § 6 (1)

Art 32

(1) kjl § 8 (3)

(2) kjl § 8 (1)

(3) kjl § 8 (2)

Art 33 kjl § 9

(a) kjl § 9 (1)

(b) kjl § 9 (2)

(c) kjl § 9 (1)

Art 34 kjl § 95

Art 35

(1) kjl § 17 (1)

(2) kjl § 17 (2) (inaccurate)

(3) kjl § 20 (1)

Art 36

(1) kjl § 21(1)

(2) kjl § 21 (2)

Art 37 kjl § 98, cfr § 36

Art 38

(1) kjl § 31 (1)

(2) kjl § 31 (2)

(3) kjl § 31 (3)

Art 39

(1) kjl § 32 (1)

(2) kjl § 32 (2)

Art 40 kjl § 97 (1), cfr § 33

Art 41 kjl § 41, § 96 (1)

Art 42

(1) kjl § 96 (1)

(2) kjl § 96 (2)

Art 43

(1) kjl § 32 (1)

(2) kjl § 97 (1 (inaccurate)

Art 44 kjl § 97 (3)

Art 45 (inaccurate)

(1) kjl § 22, § 30

(2) kjl § 22 (1), § 30 (1)

(3) (no equivalent; assumed to be in accordance with general Norw contract law principles)

Art 46

(1) kjl § 23 and § 30

(2) kjl § 34 (2), § 35 (1) (both inaccurate)

(3) kjl § 34 (1), § 35 (1)

Art 47

(1) kjl § 25 (2)

(2) kjl § 25 (3), cfr § 24

Art 48

(1) kjl § 36 (1), § 36 (3)

(2) kjl § 24, kjl § 36 (2)

(3) (no direct equivalent)

(4) (Not transposed, will correspond to general Norwegian contract law on unilateral orders - «påbud»)

Art 49

(1) kjl § 25, § 39

(2) kjl § 29, § 32 (1), § 37 (1), § 39 (2)

Art 50 kjl § 37 (1), § 38

Art 51

(1) kjl § 43 (2) (inaccurate?)

(2) kjl § § 43 (1)

Art 52

(1) kjl § 98 (1)

(2) kjl § 98 (2)

Art 53 kjl § 50, § 45 (1) (partly transposed. General principle of binding contract will apply for duty to pay).

Art 54 kjl § 48 (2)

Art 55 kjl § 45 (1)

Art 56 kjl § 46 (2)

Art 57

(1) kjl § 48 (1)

(2) kjl § 48 (3)

Art 58

(1) kjl § 10 (1), § 49 (1), cfr (adversely) § 42

(2) § 49 (3)

(3) kjl § 49 (2)

Art 59 kjl § 49, cfr (adversely) kjl § 42

Art 60 kjl § 50

Art 61

(1) kjl § 51 (1)

(2) kjl § 51 (3)

(3) (Not transposed. Will apply according to general contract law.)

Art 62 (Not transposed. Will apply according to general contract law.)

Art 63

(1) kjl § 54 (2), § 55 (2)

(2) kjl § 54 (3), § 55 (3)

Art 64

(1) kjl § 54, § 55, cfr § 94

(2) kjl § 59

Art 65

(1) kjl § 60 (1)

(2) kjl § 60 (2)

Art 66 kjl § 12 (inaccurate)

Art 67

(1) kjl § 13 (1), § 7 (2)

(2) kjl § 14

Art 68 kjl § 15 (1)

Art 69

(1) kjl § 13 (2)

(2) kjl § 13 (3)

(3) kjl § 14

Art 70 kjl § 12?

Art 71

(1) kjl § 61 (1)

(2) kjl § 61 (2)

(3) kjl § 61 (3), § 61 (4)

Art 72

(1) kjl § 62 (1)

(2) kjl § 62 (2)

(3) (Not transposed, included in § 62 (1))

Art 73

(1) kjl § 44 (1), § 56 (1), § 94

(2) kjl § 44 (2), § 56 (2), § 94

(3) kjl § 44 (3)

Art 74 kjl § § 70 (3), cfr § 27 (4), § 40 (2), § 67 (1)

Art 75 kjl § 68

Art 76

(1) kjl § 69 (1)

(2) kjl § 69 (2)

Art 77 kjl § 70 (1)

Art 78 kjl § 71 (Cf Statute 1976-12-17 No 100 - «lov om renter ved forsinket betaling m m»)

Art 79

(1) kjl § 23 (1), § 27 (1), § 40 (1) (inaccurate), § 57 (1)

(2) kjl § 27 (2), § 40 (1), § 57 (1)

(3) kjl § 23 (1), § 27 (3), § 40 (1), § 57 (1)

(4) kjl § 28, § 58

(5) kjl § 22 (1), § 30 (1), § 51

Art 80 (Not transposed. General principles of causation apply correspondingly.)

Art 81

(1) kjl § 64 (1)

(2) kjl § 64 (2)

Art 82

(1) kjl § 66 (1)

(2) kjl § 66 (1)

Art 83 kjl § 22 (1), § 30 (1)

Art 84

(1) kjl § 65 (2), § 71

(2) kjl § 65 (1)

Art 85 kjl § 72, § 75

Art 86

(1) kjl § 73 (1), § 75

(2) kjl § 73 (2), § 75

Art 87 kjl § 74

Art 88

(1) kjl § 76 (1)

(2) kjl § 76 (2)

(3) kjl § 75, § 78

PART IV

Art 89 -

Art 90 -

Art 91 Norway’s ratification by consenting statute 1988-05-13 No 29 with certain reservations.

Art 92 Reservation made for all Nordic countries

Art 93 -

Art 94 (1) kjl § 5 (2) (disputable since Denmark maintains a 1906-04-06 No 102 Sales of Goods Act different from Finland, Norway and Sweden)

Art 95 No reservations on part of Norway.

Art 96 No reservations on part of Norway.

Art 97 -

Art 98 -

Art 99 SGA 1988 in force (applies to contracts concluded after) 1989-01-01 - kjl § 99

Art 100 -

Art 101 Scandinavian reservations as to CISG 1980 Part II.

 

Provisions in SGA 1988 with no direct parallel in CISG 1980

kjl § 11 On costs prior to shipment and delivery

kjl § 16 on risk allocation when buyer has option to cancel contract («åpent kjøp»)

kjl § 17 (3) Consumer protection on products not complying with public law requirements («mangel»)

kjl § 18 On lack of conformity by pre-contractual misrepresentation

kjl § 19 On lack of conformity («mangel») when buying «as is»

kjl § 20 (2) On the lack of conformity issue when buyer has inspected the goods prior to conclusion of the contract (comp more limited «samples» provision in CISG 1980 Art

kjl § 26 On sales performed by the production of objects to be delivered («tilvirkningskjøp»)

kjl § 32 (3) Five years time limit for lack of conformity claims in consumer transactions (products with normal durability substantially more than two years)

kjl § 37 (2) No right to price reduction when object (with lack of conformity) is purchased under action (Cfr CISG 1989 Art 2 (b))

kjl § 42 Buyer’s right to retain payment in cases of breach on part of the seller

kjl § 47 Provision on situation when there is doubt as to settling price dispute; buyer’s duty to pay seller’s invoice price failing to give due notice when (a) price can not otherwise be read out of contract or (b) price is unreasonable («urimelig»).

kjl § 54 (4) Restrictions on seller’s right to avoid contract in case of buyer’s breach after delivery has taken place (third party issue, cfr CISG 198 Art 4).

kjl § 63 Provisions on creditors’ right to step into the contract, cfr Norw statute 1984-06-08 No 59 Chap 7 and CISG 1980 Art 4.

kjl § 66 (2) Modifies CISG 1980 Art 82 by stating (in national law) that buyer may avoid contract when breach on seller’s side if he compensates sellers for value reduction.

kjl § 70 (2) Provision on mitigation of damage award (national law), cfr kjl § 70 (3)

kjl § 77 Provision authorising a party to dispose of the goods in an approproate manner when price of selling clearly exceeds the level of costs

kjl §§ 79-81 Provisions on the distribution between parties of profits and returns

APPENDIX 3 EC Commission Proposal for a European Parliament and Council Directive on the sale of consumer goods and associated guarantees COM(1998) 217 final - 96/0161(COD)1.4.1998 (replaces COM(95)final) OJ 1996 No C 307/ 8)[1998] O J No C 148/12 14.5.1998


FOOTNOTES

1. On internationalisation, see i a Hjerner in Festskrift Grönfors 1991 pp 247 et seq (SC).

2. EU and EFTA states except UK are parties - as is USA. A list of member states as pr July 1998 is included in the Appendix 1 of the book, together with a (Appendix 2) survey over 99 provisions of the Norwegian 1988 Sales of Goods statute reflecting each one of 101 provisions of the Convention.

3. A later Hague 1986 Convention on the Law Applicable to Contracts for the International Sale of Goods has not yet entered into force and will probably not affect Norwegian interlegal sales of goods law.

4. Council Directive 86/653 EEC 18.12.1986 on the co-ordination of the laws of the Member States relating to self-employed commercial agents [1986] O J No L 382/17.

5. The probably best Internet home page available on International Trade Law topics is the IRV University of Tromsø (credit to Ralph Ammisah) «http://ananse.irv.uit.no/trade_law.html», to which reference is made. Other references of interest might be: UNCITRAL: «http://www.un.or.at/uncitral/», UNILEX «http://www.unilex.com/» EU Home page «http://europa.eu.int/index.htm», PACE School of law «http://www.cisg.law.pace.edu/», US Cornell Univ «http://www.law.cornell.edu/topics/commercial.html». Some others will by cited infra.

6. Edited by H Flock and F Zimmer (Annual editions). Cf also Norwegian data base «LOVDATA», accessible for basic information on «http://www.lovdata.no/».

7. The Confederation of Norwegian Business and Industry (NHO = Næringslivets Hovedorganisasjon) has published a Government Authorised translation of the 1988 Act, available through its headquarters in Oslo. Home Page NHO: «http://www.nho.no/» [with pages in ENG]. Other Norwegian statutes and regulations, as well as Supreme Court judgements is offered by Lovdata AS on «http://www.lovdata.no/» [SC].

8. A policy statement to this effect came forth in a NOU 1972:16, recommending the «transformation» technique as the more proper and suitable way to adopt international legislation to Norwegian public international law commitments.

9. European Economic Area Agreement signed Oporto 1992-05-02 (hereafter abbr «EEA»).

10. Norway's Human Rights record is excellent in respect of attempting to correct infringement in other areas of the world. Surprisingly enough, the actual implementation of the 3 conventions on the issue (1950 European Convention on Human Rights («ECHR» or in Norwegian «EMK»), 1966 UN International Covenant on Economic, Social and Cultural Rights and UN 1966 International Covenant on Civil and Political Rights) has been a pending issue in the Norwegian Ministry of Justice since the proposal with draft legislation inserting supremacy for these documents for the purpose was forwarded in the report NOU 1993:18 («Lovgivning om menneskerettigheter») (ENG summary in the report pp 193 et seq).

The issue of procedure was highly controversial inter-Nordic and is debated thoroughly in Ot prp nr 80 (1986-87) pp 18-19, arguing for the solution which was to become law.

11. Nordiska Rådet utredning «Nordiska köplager» transl: «Nordic Report on Nordic Sales of Goods Acts», signed by an expert group consisting of (Denmark:) Anders Vinding Kruse, Christian Trønning and Jesper Vostrup Rasmussen, (Finland:) Leif Sevón, Thomas Wilhelmsson and Pauline Koskelo, (Norway:) Stein Rognlien, Erling Selvig and Rolf Christensen and (Sweden:) Staffan Magnusson, Lars Hjerner and Olav Hertzman.

12. In this book elsewhere abbr «kjl 1907» as the Norwegian Act was dated 1907.

13. Reference is made to Denmark Act No 733 1988-12-07, Sweden Act 1987:822, Finland 387/64.

14. Litigating parties in consumer disputes, however, may choose freely not to invoke otherwise mandatory provisions in the Act, and such positions may be taken by way of a procedural agreement between claimant and defendant without violating the law.

15. The «freedoms» in consumer sales left for contracting (NB: failing to contract will not alter the rule stated in the Act) include the authority (for the seller) to contract for
- a right to levy transportation costs on-to the consumer in addition to the price (§ 11 (2));
- in case of delay to agree on certain issues pertaining to seller's «peripheral obligations» on duties not involving the duty to deliver on time (§ 22 (2));
- similarly in case of lack of conformance («defect») (§ 30 (2));
- claims based on a third party's conflicting copyright, patent etc (industrial intellectual property) may be regulated in contract (§ 41 (4));
- the contractual distribution of returns or profits of the contract object (§ 79).

16. The ambition goes even further than this; even mandatory consumer sales' provisions are meant to be covered by the SGA 1988 codification, so that the Act in fact is meant to be equally applicable to international sales, domestic commercial sales and consumer sales (except consumer credit sales, which is regulated in a separate 1985-06-21 No 82 statute including subsequent 1992 EEA amendments to adopt relevant EU directives on consumer credit).

17. Note, however, that according to Scandinavian legal method tradition, the legislators preparatory works, in casu consisting of NU 1984:5, Ot prp nr 80 (1987-88) (comments on international sales pp 140 et seq) and Innst O nr 51 (1987-88) are relevant when interpreting the provisions of the Act. (SC)

18. One should, however, not exaggerate the dramatic novelty of the CISG 1980 invasion of Norwegian sales of goods law. The method described in the text has been adopted throughout a number of maritime law transpositions to international conventions, such as in the present 1994-06-24 No 39 Maritime Code, containing national versions of the 1968 Hague-Visby Rules 1968 (sjøl §§ 251 et seq), the 1957/1976 Convention on limitation of shipowners liability (sjøl §§ 171 et seq) and the 1969 Civil Liability for Oil Pollution regime (sjøl §§ 191 et seq). The significant difference is that the maritime law of all countries, such as Norway, is in itself of a truly international nature where minor effect on national activities is tolerable while this can not be said about national legislation on the various categories of sale of goods, affecting a whole population of the territory, both in the public, the commercial and the private sector.

19. The legislator defends the selected sole Norwegian method in the preparatory ministerial draft (Ministry of Justice) Ot prp nr 80 (1986-87) (SC) by arguing that the number of such specific provisions after all is limited. In this author's opinion, it is not the number of provisions, but their relative impact on the legal situation between the parties, which is of importance, as well as the general possibility to familiarise oneself with a local CISG 1980 version which is not at all like the original in respect of arrangement of provisions and topics dealt with.

20. Reference is made to a similarly very critical view on the CISG 1980 adoption into Norwegian statutory law, demonstrating many and serious discrepancies between Norwegian version and the original provisions, but also pointing to the increased problems when the Convention itself is ambiguous and vague in addition to the «clarifying» statutory amendments made by the Norwegian legislator, V Hagstrøm TfR 1995.561 (SC). One could add that the problems tabled by Hagstrøm are augmented by the fact that the persons in charge of the «adaptation» of the CISG 1980 regime have later published authorised commentaries in Norwegian where - no surprise - the ministerial view is expressed on all controversial interpretation matters - Bergem-Rognlien Kjøpsloven. Kommentarutgave (2nd ed 1995) with pretentious comments from the physical if not political legislator both on the Norwegian statutory provisions and on the CISG 1980 provisions themselves. In this author's view, this raises serious research ethical problems on the mixing of provocative policies in the chair of a public administration decision-maker with the subsequent publishing of legal «theory» pretending to meet standards of scientific objectivity. Could it be that the interpretation suggestions now advocated as proper Norwegian law on CISG 1980 issues were in fact suggestions rejected under the diplomatic preparation of the final version of the Convention?

21. Modern neo-dualistic statements advocating supremacy for national legislation over international law has been worded in two famous instances in recent Norwegian legal history, first the preparatory statement to the EEA agreement, where the Parliamentary committee report Innst O nr 14 (1992-93) (Foreign Policies and Constitutional Committee with traditionally high prestige within the Norwegian Parliamentary system) pp 4-5), states that any Norwegian statue must prevail in cases of acute and clear discrepancies, even if this means violating public international law commitments, secondly by Supreme Court in the OLF ILO «Strike case», Rt. 1997. 580 where the court in respect of potential discrepancies between the 87 and 98 ILO Conventions on thresholds for national statutory intervention in a labour conflict, the Norwegian policies expressed in the custom to interrupt such strikes and lockouts by «tvungen lønnsnemnd» must prevail. Note that the general supremacy provision of the EEA Agreement Protocol 35, now expressed in the EEA 1982-11-27 No 109 Act itself (§ 2), solves the question of supreme for duly adapted EEA legislation over other Norwegian law (statute or regulation's), but not the issue of possible discrepancies such as an statute or regulation not expressing an «acquis comunautaire» EC directive in a sufficiently precise manner.

22. Preparatory works to legislation is generally published and enjoys high authority in issues in the interpretation of the law.

23. Another 1986 Convention on the Law Applicable to Contracts for the International Sale of Goods has not yet entered into force, cf Ramberg International Commercial Transactions (1997) p 26 (ENG).

24. In 1955 Convention Members states which are also EU members, the Convention will prevail over the 1980 EC Convention, see now EU Treaty (Amsterdam amended and consolidated version) Art 307 (ex Art 234).

25. Examples of this is demonstrated by V Hagstrøm in the discussion of the issue of seller's liability for subcontractors and preceding suppliers to the actual CISG 1980 seller, op cit pp 565 et seq (pertains to the contents of the Norwegian SGA 1988 § 27 2nd para).

26. Appeal Court Report «Rettens Gang» («RG») 1995 p 81; passing of risk in connection with public approval prior to the commencement of a CMR road transport of fish shipped to Spanish buyer, thus involving a CISG transaction, but the dispute dealt with a recourse action between Norwegian parties after rejection by Spanish importer and raises no CISG questions. (Hålogaland)

27. Some references to Part II issues in the English language (ENG): P Schlechtriem (ed) Commentary on the UN Convention on the International Sale of Goods (1998) Part II, Honnold pp 191[Sect 131] et seq, B Nicholas Law Quarterly Review Vol 105 (1989) 201 pp 212 et seq, Eörsi-Farnsworth in Bianca-Bonell Commentary On the International Sales Law (1987) pp 132 et seq, Sono in Volken-Sarcevic Dubrovnik Lectures (1986) pp 111 et seq, Ramberg International Commercial Transactions (1997) pp 27 et seq. For Norwegian readers, references are made to Bergem-Rognlien s 478-82, Gomard-Rechnagel International købelov (1990), Lookofsky Internationale køb s 47 flg, Philip UfR 1988.B.426 (SC).

28. The Scandinavian attitude is unique, as no other CISG 1980 states have made similar reservation as to Part II. On possible consequences of the Scandinavian reservations, see Lookofsky Internationale køb p 51 and in Juristen 1989. 106 p 111 (SC).

29. The most radical provision of the Scandinavian act is due to a 1983 amendment in § 36 on the judicial review of contents and effects of private contracts, irrespective of the nature and contents of the contract, and - at least formally - equally effective within the consumer area and in commercial transactions. On the Nordic «generalklausul», see summary in English preparatory SOU 1974:83 pp 20 et seq.

30. B E Konow in the KARNOV Annotated Norwegian Statutes (2nd ed 1996) under the 1964-04-03 No 1 statute, comment in note 15 with further references, see also (same author) «Løsørepant over landegrenser» (under publication 1998) IV.20.3.2. pp 514-15). («Cross Borders Security Interests in Movables») (SC). Cf also RG 1993.1249 Hedmarken.

31. Mutatis mutandi the Norwegian would-be exporter might succeed in having the dispute of whether there is a contract or not solved under Norwegian law, excluding the appliance of CISG 1980 Part II.

32. The Norwegian law professor Fredrik Stang (University of Oslo) is generally recognised to be the innovator of this extraordinary piece of legislation, still operative in the commercial and private area in all Scandinavian countries (although the time now seems to be ripe for a law reform, but that can hardly be blamed on professor Stang).

33. This expression, meant to replace the then applied terms «rettshandel» and «viljeserklæring» in statute language and contemporary writings of the time, was created in several writings by late legal scholar Carl Jacob Arnholm, who was a beloved professor and brilliant educator of generations of law students later to become law candidates in the Oslo law faculty of the 1960'ies (including this author).

34. The CISG 1980 provisions introduce a two-layer system by distinction between revocable and irrevocable offers not known to Scandinavian legal scholars. Scandinavian courts would probably have had some problems to single out from the scope of the Art 16 categories of offers which is not irrevocable, but still legally effective under Art 14.

35. A Finnish 1990 Draft (Bet 1990:20) on Formation of Contract contains provisions based on the CISG 1980 «last shot» principles in general, even outside the CISG area, cf Draft §§ 7-8 (SC).

36. The method of establishing general and specialised principles applicable to contract situation as such in lack of parties' contract is used to a much larger extent in Nordic law than in UK common law. The historic explanation for this is probably 19th century import into Nordic law of principles originating from the Continental «Law of Obligations» like German HGB, French Code Civile, Swiss «Gesetzbuch» etc.

37. NB NB There is already abundant academic material on the Principles of «lex mercatoria», see for instance (Scandinavian writings) Ramberg International Commercial Transactions (1997) pp 20 et seq and E Nerep Festskrift Ramberg 1997 pp 387 et seq (ENG), C Hultmark Festskrift Sandström 1997 pp 281 et seq, JT 1995/96.655, J Herre Fes tskrift B Stuevold Lassen 1997 pp 439 et seq, on «lex mercatoria» in international arbitration see O Lando UfR 1985.B. 1. (SC) [NB SJEKK MOT § 3 NOTE 35]

38. OJ 1994 L338/100.

39. Compare also the UNCITRAL «Model Law on Electronic Commerce» (1996) including «Formation and validity of contracts» (Art 11) can be reached at «http://www.un.or.at/uncitral/».

40. ICC Publication No 452.

41. See in particular the «Fekete» decision (concerning deliveries to ship manager acting for shipowner), Rt. 1980.1109, but also the «Grand Kafe» Rt. 1981. 611. The finance broker is, on the other hand, really a «kommisjonær» acting in his own name, but for the commercial risk of the client in transactions on financial instruments («finansielle instrumenter»), cf Act 1997-06-19 No 79 § 8-5 and § 11-1.

42. See critical observations by Grönfors in Avtalslagen. Kommentar (1984) pp 235-37 (SC).

43. There remains the question of whether a local consumer can invoke Norwegian provisions on «direct» action outside the regime of product liability scenarios. The Norwegian cases and previsions on this issue distinguish between the «subrogation» model, where a buyer (as for instance consumer customer) steps into the claim belonging to the importer vis á vis a non-resident CISG state exporter. In such a case, the consumer may not exercise all the privileges granted to him by the Norwegian SGA § 84, but since the importer could have induced a transfer if the contract, there can be no objection to having that buyer invoke the CISG 1980 and vice versa. On the other hand, the alternative Norwegian genuinely direct claims provisions seem to fall outside the scope of the Convention, and in this case the question is: Does the CISG 1980 system exclude other claims towards a seller or buyer which is already under the CISG regime?

44. Since 1992, the purchase of land has been regulated in a separate «avhendingslov» 1992-06-26 No 86, with provisions for the protection of private buyers. By 1997-06-13 No 43, the «bustadoppføringslova» was enacted, covering by way of mandatory provisions both consumer's purchase of turn key residential or leisure apartments as well as the construction contracts with entrepreneurs and - to some extent - the services of the civil consultant. Brokers in the real estate market are subject to the provisions in the «eiendomsmegler» statute 1989-06-16 No 53.

45. Raising some questions within the IT sector as to when and how a somehow protected position (like in the law of intellectual property) can be the matter of a sale transfer under the SGA 1988. On the implication of the CISG 1980 title term «goods» (which does not appear in the Nordic titles), see infra.

46. Promissory bills («gjeldsbrev»), statute 1939-02-17 No 1 - §§ 9-10.

47. There are minor differences in the wording of the 1988 SGA § 5 (3) list compared to the text of Art 2 in the Convention. For instance, it is not clear whether «rettigheter» in § 5 (3) is exactly equivalent to «shares» in Art 2 (d). Parties may, however, «contract in» both the Convention directly, or if they so wish the Norwegian statutory version of the international rules.

48. However, the infra-trade between part licences under a traditional joint operating agreement (which is the normal set-up in the offshore industry) would no doubt fall under the term «share». On SGA appliance on transfer of rental contracts, K Lilleholt Personskifte i husleigeforhold (1986) (SC) pp 254-55 (SC).

49. ND 1987. 216 Norw Arb (dispute over weight specifications in a catamaran intended for high speed cruising - i a does the specification refer to engine with or without lubricating oil, coolants?).

50. PACE: «http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-02.html».

51. Not to be confused with police registering of pleasure crafts, which has nothing to do with the issues dealt with here.

52. Falkanger - Bull - Brautaset Introduction to Maritime Law (1998) pp 44 et seq (ENG).

53. Needless to say, the customer's contract is a consumer contract outside the scope of CISG 1980, but is there any reason why the import arrangement of pleasure «vessels» should not be treated as any other commodity import contract?

54. [1993] O.J. L 199/ 84 (consolidated), subsequently amended by WTO GPA adjustments Dir 97/52 EC 13.10.1997 [1997] O.J. No L 328/ 1. Se Annex XI of the directive, explaining the scope provision in Art 1.4.

55. 1996-11-29 No 72 Petroleum activities Chap V on closing down and removal of equipment commitments on the licences.

56. Ot prp nr 80 (1986-87) p 49 (SC).

57. Observe, however, that the subcontract could very well be a CISG 1980 contract, when purchasing abroad and when supplying deliveries to non-resident contracts in other CISG 1980 states (except UK, which has not signed CISG 1980).

58. The supply of electricity is, however, covered by the Council Directive 85/374 EEC 25.7.1985 on the approximation of the laws, regulation's and administrative provisions of the Member States concerning liability for defective products [1985] OJ No L 250/ 29 Art 2 i f. The Norwegian 1988-12-23 No 104 Act on Product Liability was before EEA not meant to apply to electricity, Ot prp nr 48 (1987-88) pp 47-48. The 85/374 directive, however, expressly states (Art 2 i f) that «electricity» constitutes a «product» and consequently, the Product liability act had to be amended accordingly (1992), cf now § 1-2 (1). The peculiar situation, where electricity is a «product» under one statute and not under another, does not seem to have bothered the legislator. The question is dealt with supra under § 18.

59. Two of the EC consumer directives are actually primarily meant for international transactions: Council Directive 94/47/EC 26.10.1994 on the protection of purchasers in respect of certain aspects of contracts relating to the purchase of the right to use immovable properties on a timeshare bases [1994] OJ No L 280/ 83 (transposed into Norw 1997-06-13 No 37), Directive 97/ 7 EC 20.5.1997 of the European Parliament and of the Council on the protection of consumers in respect of distance contracts. [1997] OJ No L144/ 19.

60. As late as in 1992, the Ministry of Justice felt confident that the traditional Norwegian consumer formula applied in statutory language since 1972 was in conformance with EC, see comments Ot prp nr 72 (1991-92) p 39 on the EEA Credit Purchase law reform (1985-06-21 No 82, amended 1992-11-27 No 113). Later, it seems, this position has been revised, see now the «timeshare» Act 1997-06-13 No 37 § 2 d. The discrepancies between the Norwegian concept and EU current definition will probably mean that the EC definitions will eventually replace the Norwegian understanding of the term. Supra, under § 4., it is shown that the two definitions are far from identical. Cf also Krüger in Festskrift Per Stavang 1998 pp 429 et seq at p 436-37 (SC).

61. Joint Declaration No 23 by the Contracting Parties to the Agreement on the relation between the EEA Agreement and existing Agreements, stating that the EEA Agreement shall not affect rights assured through existing agreements concerning i a «individuals» (which will cover consumers).

62. The issue discusses could also involve subsequent EC and EU directives imported into the EEA regime, none of which would obtain priority over the already existing CISG 1980 provisions, such as the forthcoming Directive 97/ 7 EC 20.5.1997 of the European Parliament and of the Council on the protection of consumers in respect of distance contracts. [1997] OJ No L144/19.

63. Ramberg International Commercial Transactions (1997) p 26 (ENG).

64. Further comments on § 87 in Ot prp nr 80 (1987-88) p 141 and NU 1984:5 p 203 (SC).

65. The parties may also «contract in» the convention, for instance in cases where Art 2 excludes applicability. In such a case the basis for applying CISG 1980 will be the contract and not the Convention itself. Cf Hellner in Volken-Sarcevic International Sale of Goods (Dubrovnik Lectures) pp 335 et seq (ENG).

66. C Castronovo Festskrift O Lando 1997 pp 109 et seq (ENG), C Hultmark - J Lookofsky JT 1997/98.303 (ENG). Contracts may violate competition provisions such as Treaty Art 85, in which case the contract becomes null and void, depending on national law principles on unlawfulness and restoration of status quo. Border line issues between community law and general law of obligations can also be seen in the Danish «AMBI» cases, in which Denmark was allowed to legislate the economical effect of a very long period from a statutory infringement on one of the EC VAT directives, see C-200/90 Dansk Denkavit Aps and P. Poulsen Trading Aps v Skatteministeriet [1992] E.C.R. I-2240 and UfR 1994. 181 DaHR and UfR 1992. 476 DaHR on the «act clair» doctrine to reserve national control over the gigantic refund issue, see Krüger Festskrift P Stavang 1998 429 at pp 449 et seq. (SC)

67. Principles of European Contract Law Part I (1995) on Performance, Non-Performance and Remedies.

68. Council Directive 86/653 18.12.1986 on the co-ordination of the laws of the Member States relating to self-employed commercial agents [1986] No 382/17 could be said to deal with contract law, in so far as the directive states mandatory rules on right for the agent in connection with contracts termination.

69. A Proposal for a Council Directive on the liability of suppliers of services (91/C/12/11 COM(90) 482 final - SYN 308) [1991] OJ No C 12/ 8 seems to have been left without further ambition to have it developed further. It seems as if that directive was meant to be a pendant to the product liability directive, placing some kind of general liability for loss or damage attributable to the professional renderer of a service.

70. The 1918 Act has four chapters, but it is only Chap 1 which deals with genuine formation issues. The § 36 was inserted among other provisions in the Chap 3, dealing with void contracts on account of fraud, duress, exploitation of other party's weakness. The Chap 2 deals with negotiation capacity to bind a principal («fullmakt»), which could be in agency, but could also be an employee etc. English summary of the § 36 proposal (J Hellner) in the SOU 1974:83 pp 20-23 on the objective of the «generalklausul» in modern contract law, probably fairly representative for both Swedish, Danish, Finnish and Norwegian legislators at that time. (ENG)

71. UCC Sect 2-302: «(1) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made, the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as avoid any unconscionable result.
(2) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.»

72. The discretionary authority placed within the provision is in fact multidimensional: The judge may consider not only reasonable conditionally, but also the appropriate reasonable measure to rectify the deficiency - ex post or ex ante - ex tunc or ex nunc. No other provision in modern contemporary contract law seems to go as far as the formal scope of the § 36. One has by this definitely left the era in European legal history when the judge's task - citing the famous words of Montesquieu - was to voice the word of the legislator!

73. [1993] O J No L 1 95/ 29.

74. This solution was matter of dispute between the Commission and Norway prior to the referendum which gave as a result that Norway would reject membership status. The original draft directives were meant to be exhaustive in a way which could mean that the whole Nordic concept for rational consumer protection would have had to be reformed. This did not happen.

75. The prevailing view and the position of the Ministry of Justice was that the already existing «reasonableness» test provision i § 36, read in conjunction with the 1992-06-16 No 47 § 9a statute on the monitoring of unreasonable standard clauses, would have satisfied the EEA requirement, with one petty detail covered up by the subsequent § 37: Since the § 36 logically might work out to the consumer's disadvantage if a contract proven unreasonable at the time of conclusion later surprisingly produces reasonable results for the consumer, then the directive would still require some sanctions. This extremely hypothetical but brilliant logic observation should in this author's opinion have been filed with other documents on the case for good - and forgotten. The § 37 appears as a ridicule to anyone who is not familiar with the historical context of the provision.

76. The possible complications when implementing a forthcoming directive like the 1991 draft to Scandinavian far more sophisticated consumer protection regime - outside the scope of CISG 1980 area - is another question. The Scandinavian (EFTA) attitude towards the Directive proposal has so far been somewhat reluctant.

77. It could seem as if the § 36 authority is in conformance with CISG 1980 Art 4 (a), in as far as the reasonableness test functionally is classified as a case of partial invalidity.

78. Within the domestic commercial area, see cases like NJA 1979. 666, NJA 1983. 332, NJA 1987. 639, UfR 1981. 300, UfR 1987. 526, UfR 1987. 531, UfR 1988.1042, UfR 1989. 7 (all UfR referred to are Danish Supr Ct decisions), Finnish Sup Ct decisions reported in NDs 1983. 338 and NDs 1985. 444.(leasing clauses), NJA 1983. 332 SvHD (unilateral revision of banks' letter of credit conditions - clause revised applying § 36), see also NDs 1983.168 SvHD, UfR 1982. 227 ØL (clause authorising termination of agent contract considered non-applicable). See Schjødt MarIus 180 (1990) pp 92 et seq (on avtl § 36 in commercial area, with particular reference to the «Ula» arbitration award).

79. On reasonable test (§ 36) cases in the international CISG 1980 commercial area, see UfR 1988. 449 DaHR, where a clause requiring evidence to release a bank's obligation to pay under an export credit guarantee arrangement was upheld (=NDs 1988. 172 DaHR).

80. Hellner Festskrift Riesenfeld 1983 pp 171 et seq, and in Festskrift Hjerner 1990 pp 219 et seq (ENG).

81. See in general E Selvig TfR 1986. 1, commenting on the Norwegian «Arica» arbitration award reported ND 1983. 309 on the construction of maritime standard forms under domestic law when such forms originate from UK law. The paradox of the case was that in spite of the express selection of Norwegian law as proper law in the time charterparty, the already existing different UK law based on the «plain meaning of the contract terms» doctrine prevailed and meant the off hire freight calculation clause of the charterparty was to be construed under UK law since that formed the relevant context which a Norwegian interpretation method had to recognise (dissenting opinion with considerable weight in arguments) (SC).

82. Sect 14 (2) «Where the seller sells goods in the course of a business, there is an implied term that the goods supplied under the contract are of a satisfactory quality» and Sect 14 2A) «For the purpose of this Act, goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price (if relevant) and all the other relevant circumstances» (emphasis added).

83. NSF «Quality systems. Model for quality assurance in design, development, production, installation and servicing». Norges Standardiseringsforbund «http://www.standard.no/nsf».

84. The question can be raised in connection with public or semi-public surveyors errors and professional neglect, but also in connection with privately engaged professionals like real estate surveyors, auditors, classification societies etc. The Scandinavian situation is not clarified. The Swedish Sup Ct case reported NJA 1997. 149 rejects the idea of vicarious identification when a real estate appraiser's desinform in his report, while Danish and Norwegian subordinate judgements seem to be to the contrary: RG 1997. 385 H, UfR 1991. 363 ØL, UfR 1995.238 VL.

85. Always provided, however, that the sacrifices on part of the sellers are not out of proportion with the buyer's interest in having the defect corrected instead of economical compensation.

86. Comments by E Selvig in Ot prp nr 80 (1986-87) pp 339 et seq (SC). The question of specific performance under SGA § 34 is dealt with supra under § 15. Critical to the confusion raised by the modality created by CISG 1980 Art 28 by reference to national law is V Hagstrøm TfR 1985. 561 pp 571-74, but his contrasting towards common law principle of no specific performance is somewhat blurred since UK is the EU country which has not entered the CISG (so the example p 572-73 seems somewhat hypothetical from practical realities, although there are a number of CISG states of the common law tradition - as USA).

87. Rt. 1935. 497, ND 1974. 241 SøHa, ND 1979. 231 NV («Wingull»), NJA 1979. 483, UfR 1986. 654 DaHR. Comp on the other hand the «Trans Tind» cases (arbitration and court dispute in recourse) reported ND 1984. pp 404 et seq (and ND 1986. 93 E/ND 1984. 384 Lier, Røyken og Hurum).

88. Nicholas op cit p 222.

89. V Hagstrøm op cit is very critical towards the Norwegian rewording of the impediment principle of CISG Art 79, and is equally disappointed by the «break down» action which has been taken to fragment the provision in Art 79 and splitting it into at least three and more parts: The maintaining a claim for specific performance in § 23, the liability for delays in § 27 and the liability for defective goods in § 40.

90. V Hagstrøm op cit pp 580 et seq with numerous references to CISG 1980 literature on the issue.

91. On this a compliment to the Norwegian Ministry of Justice, cutting the Gordic knot by splitting the Art 79 into three legislative fragments for clarification: One provision for specific performance (§ 23), a second for delay liability (§ 27) and a third for defect liability (§ 40). The pain of obscurity by obstructing sound clarification may at times justify the yielding to the temptation to improve something which is fundamentally vague and thus by rectification improve and familiarise the product to national law. This could not have been achieved without employing the transformation method in the integration of CISG 1980 into national law. V Hagstrøm op cit p 583 seems to disagree on this, pointing to the disrespectful chopping up of the CISG provision into three separate legal fragments, out of which the SGA 1988 § 40 on seller's liability for defects is said to have slim authority in the convention itself, citing literature with split opinions on the matter. The episode, however, proves the old saying that not all that glitters is gold: The highly prestiged international legislation surrounded by media and diplomatic pomp and circumstance may prove to be far worse in its compromising obscurity than a tiny sophisticated precise piece of legislation produced by the end of a day like all others by a purpose-oriented civil servants dedicated to the state of the art in his work. These reflections lead to birds' eyes' perspective on the sailing between the Scylla of diplomatic obscurity around international compromising in legislation and the Charybdis of strong and monolithic but target ed legislation done in places like Brussel.

92. Extending the concept of impediment, however, is something else. In this author's opinion, there is no justification for placing a private seller in the same position as the professional supplier, as has been done in the Norwegian SGA 1988 § 40 (1) read in conjunction with § 19 (1)(a) or (c). The ministerial fascination over the newly found animal «impediment» is now spreading to new areas of contract legislation, but, alas, with less justification than in the SGA 1988 case. It is, for instance, hard to accept or appreciate the strict liability for losses in addition to price reduction now placed on the seller of homes when moving on to another residence. Heavy critical opposition on this has been voiced in this book supra § 17.4. Modest suggestions for departing from the «impediment» concept in the committee report NOU 1992:9 p 40 on draft legislation for construction contracts for consumer housing, were squarely overruled in Ot prp nr 21 (1996-97) p 29 and the impediment «animal» is now barking at contractors reading the 1997-06-13 No 42 § 35 first para.

93. On German impact in Nordic sales of goods law, see J Hellner «The Influence of the German Doctrine of Impossibility on Swedish Law». Ius Privatum Gentium 1969 Festschrift für Max Rheinstein (ENG) and by the same author on «pacta sunt servanda» and its duplicate «rigor commercialis» Festskrift T Eckhoff 1986.355 (SC).

94. Summaries on some 24 Art 79 cases are available UNCITRAL («http://www.un.or.at/uncitral/en-index.htm»), see also PACE («http://www.cisg.law.pace.edu/»). CISG Art 79 cases (judgements, ICC arbitration and others) will be subject for an article on «financial force majeure» to be published Spring 1999 by this author in a Swedish scheduled anthology commemorating Swedish writer and SGA 1905-07 SGA commentator Tore Almén.

95. Unless, of course, the persons in the legislature must take some contributory blame for the shortcomings of the joint document which were meant to create international clarifying unity. The literature on the issues discussed on these pages is in abundance. Suffice it to mention Honnold pp 534 et seq (Sect 426), Nicholas Law Quarterly Review Vol 105 (1989) p 235 (and in Galston-Smit pp 5-10 et seq)(ENG).

96. V Hagstrøm op cit p 568 points to additional confusion in the process of parliamentary adoption of the draft statute, when SGA 1988 § 27 (2) second sentence was added in something which could correctly be described as the total and ultimate confusion of all participating actors on the stage. The added sentence adds something which is not in the Convention, but what is added? If the CISG 1980 Art 79 states the limits for a presumed liability which is inherent in the Convention, then the added sentence only states that the delay caused by other than persons engaged to perform on part of the seller is within the main rule of liability. If on the other hand the Art 79 somehow places liability, then the added sentence places liability in a situation where the seller should not have had any liability according to Art 79. In this author's opinion, the clear-cut solution in SGA 27 (2) both sentences are appropriate and acceptable solutions to a difficult problem where one solution - good or bad - is better than none.

97. Strub International Comparative Law Quartely Vol 38 (1989) p 475 (ENG).

98. Council Directive 93/36 EEC 14.6.1993 co-ordinating procedures for the award of public supply contracts [1993] O.J. L 199/ 1 (Consolidated) as amended by European Parliament and Council Directive 97/52/EC of 13.10.1997 amending Directives 92/50 EEC, 93/36 EEC and 93/37 EEC concerning the co-ordination of procedures for the award of public service contracts, public supply contracts and public works contracts respectively, Amended European Parliament and Council Directive 98/ 4 EC 16.2.1998 amending Directive 93/38 EEC co-ordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors [1998] O J L 101/ 16 ; former Commission Amended proposal COM (96) 598 final - 95/0080(COD)(UTILITY) for EC Directives amending Directive 93/38 ("Utilities") [1997] O J C 28/ 4 (cf preparatory European Parliament (GPA) 2 Proposals COM (95)107 final - 95/0079(COD) 27.4. (Explanatory Memo [1995] O.J. C138/ 1) for EC Directives amending Public Procurement Directives 92/50, 93/36, 93/37 and Utilities' Directive 93/38; [1995] O.J. C138/ 1 and [1997] O.J. C28/ 4/).

99. UNCITRAL Yearbook Vol XXV: 1994 (1995) pp 307 et seq (preparatory material and documentation in Part Two: Studies and Reports pp 37 et seq).

100. Present version of Guidelines Procurement under IBRD Loans and IDA Credits dated January 1995 (revised January and August 1996). First version Guidelines dated 1985.

101. Compare the more specific protective provisions on third countries' access in Utilities' 93/38 Dir EC Art 36 (supplies' origin), Arrowsmith (1996) pp 765 et seq with further references and in [1995] 1 PPLR 1, on the EC/US trade dispute in this respect Trepte Public Procurement in the EC (1993) No 209 (p 35), in [1993] 2 PPLR CS82, Halford [1995] 4 PPLR 35. The GPA concept in conjunction with the EC/EEA regime extends the public procurement principle of either non-discrimination or of «no less favourable than» to all EC, EEA and GPA states.

102. Access for small and medium sized enterprises («SME») to the extensive euro-wide market of public contracts is being stimulated in different ways, such as the establishing of European Economical Interest Groupings («EEIG»s) under EC Council Regulation No 2137/85 ([1985] O.J. L199/ 1). The directive enables SMEs to form join venture arrangement in order to acquire the size and joint competence needed to undertake public contract commitments of substantial formats.

103. Amsterdam amendments 1997 included renumbering of all previous (Rome/Maastricht) articles, of the Treaty, cf [1997] OJ No C 340/173 with conversion table pp 85 et seq.

104. Kgl res 1978-03-17.

105. 1978-03-17 § 2, cf § 5

106. Under Norwegian law, a contract is awarded under the open tender procedure when the tenderer through intended notice («antagelse») has been aware that he is the successful candidate (1918-08-31 No 4) Act on Formation of contracts § 7).

107. Norway has filed application under the Dir 93/38 EC Art 3, cf the 1994 amendment to this directive in connection with the adopted 94/22 EC «licence» Directive. The sub-contracts may fall outside the EEA regime as the main contractor is not operating with an exclusive and special licence. The normal procedure is to practice close back-to-back arrangement of the NF 92 applied both in the main and in the sub-contractor link. Different aspects of fabrication contracts, including the transfer of technology and intellectual property provisions of the NF 92 Art 32 et seq, are discussed more thoroughly supra under § 24. (SC)

108. The profession maintains, however, that one did already operate competitive award procedures when the EEA 1992 arrangement came into place. The objection from the industry was based on all the «red tape» and time-consuming administrative work in connection with truly open EEA competition for contracts.

109. A highlight on the issue is the notorious Danish ECJ C 243/89 Commission v/ Kingdom of Denmark («Storebaelt» case) (J 1993-06-22) [1993] E.C.R. I-3353, where ECJ considered a blatant «buy Danish» clause in the tender invitation material to be an infringement of a number of Treaty provisions such as Arts 30, 48 and 59 EC as well as the then relevant EC Directive 71/305.

110. The fact that Norway after its 1994 Referendum refused Membership in the EU has no direct impact on public procurement law under the existing EEA agreement. However, any application of the Maastricht/Amsterdam Treaty amendments within the area could cause a problem, since neither the 1992 nor the 1994 extensions of the Treaty form part of the EEA «acquis communautaire».

111. RG 1982. 330 Drammen, RG 1984.1016 Trondenes, RG 1987.982 Lofoten, RG 1990. 50 Tromsø RG 1990.993 H, RG 1990.50 Tromsø, RG 1991. 818 Vest-Telemark, RG 1991.1233 Orkdal, RG 1993. 580 G, RG 1993.1315 Kongsberg, RG 1998.178 E.

112. On the «ban on negotiations», se Krüger in Arrowsmith (ed), Procurement. Global Revolution (anthology) (to be published October 1998), Jur fak UiB 71 (1997) pp 74 et seq.

113. Thus being of a mixed contract/tort law nature. Liability towards third parties for professional negligence however, may follow different structural patterns of concept: A «product liability» concept within or beyond the scope of EC 1985 directive, a constructive «assignment» model («subrogation») like modern Norwegian legislation on consumer claims against a third party which caused the subsequent harm or damage - or solutions based on extended extra-contractual protection for non-physical loss and damage inflicted on interests worthy of legal protection regardless of contractual commitments towards the interest in question. The procurement «rules of the game» seem to protect the interests of potential passed-over potential contractors under a quasi-tort conceptual approach.

114. Under CIGS 1980 Art 23 the acceptance of an offer constitutes a contract binding for both parties. In Continental and Scandinavian law the tender bid will be classified as a unilaterally binding communication to the offeree, while the acceptance by award decision communicated to the tenderer constitutes the mutually (reciprocally) contract binding on both parties.

115. Comp the somewhat less distinct IBRD 1996 Guidelines Art 2.58. reference (i) to be substantially responsive to the bidding documents and (ii) to offer the lowest evaluated costs, furthermore more extensive suggestive regulation in UNCITRAL 1994 Model Law Art 34 (4) (a) and (b).

116. Se also E Parliament Resolution «Green Paper on public procurement» [1997] O J C 339/65 10.11.1997.

117. Cf Report «Electronic Tendering Development. Final Report. Technical assistance in electronic procurement to EDI - EEG 12 Sub-group 1» prepared by Peder Blomberg and Sören Lennartsson (1997-08-27). SIMAP access: «http://simap.eu.int/».

118. «Green Paper» pp 14-15.

119. With an English summary pp 15 et seq.

120. The Danish system Klagenævnet for Udbud («http://www.ks.dk/forside3/» (ENG)) is an administrative system. In Norway, the judicial review was placed within the regular court systems, as were the requirements for interim «legal first aid» measures provided for in the «classical» sector remedy Dir article Art 2.1.c. The idea to have expert panels opine on disputes has proved successful. A private panel within the construction industry established in 1977 has reviewed some 100 cases on disputes within the «works» sector (BFJR Byggebransjens Faglig Juridiske Råd» «http://www.jur.uib.no/bfjr/bfjr.html»)(SC) and since 1997, the Norwegian Federation of Industry and Business (NHO) has operated an «agreed» expert panel system for a similarly informal responsive review procedure based on written submissions to the panel. («http://www.nho.no/tema_frames.html»)(SC). A panel procedure will never be equivalent to a full open court hearing on the matter, but it seems as if disputes with purely legal implications are suited for a more informal review. Both panels mentioned are composed of representatives from all sides of the typical procurement dispute scenario: The contractor, the entity, the consulting engineer and the artisans. Both panels have law professionals. The author is a member of both, working with other law professionals with accumulated procurement legal expertise.

121. Council Directives 89/665 EEC 21.12.1989 on the co-ordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts [1989] O.J. L395/ 33 and Council Directive 92/13 EEC 25.2.1992 co-ordinating the laws, regulations and administrative provisions relating to the application of Community rules on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors. [1992] O.J. L76/ 14.

122. Statements in Ot prp nr 97 (1991-92) p 27 (commenting on why one had to legislate damage issues on the utility remedy directive, but not within the «classical» sectors.

123. Rightfully pointed out by L Simonsen in Prekontraktuelt ansvar (1997) p 820 et seq (SC).

124. Not applicable in EEA disputes, cf 1988-09-16 Lugano Convention (infra referred to as «Lugano») Art 3 2nd para item reference to Norway item , cf 1993-01-08 No 21 Act giving supremacy for the Convention.

125. Cf Falkanger-Flock-Waaler Tvangsfullbyrdelsesloven I-II annotated (2nd ed 1995). (SC)

126. An English case on retroactive effect of the 1982 English Act on recognition of Swiss judgement in sale of goods dispute: Tracomin v. Sudan Oil Seeds Ltd [1983] 2 Lloyd's Rep 384 CA. The 1968 Convention expressly excludes arbitration awards (Art 1 (4), cf Marc Rich Co A G v Societa Italiana Impianti P A («The Atlantic Emperor»), [1989] Lloyd's Rep 548 CA., furthermore O'Malley -Layton European Civil Practice (1989). (SC:) S Rognlien Luganokonvensjonen. Norsk kommentarutgave (1993), J Hov Rettergang i sivile saker (1994) pp 53 et seq, L Pålsson SvJT 1990.441, J Lookofsky UfR 1993.B.308.

127. On the 1988 Lugano Convention, see i a (ENG:) Jenard Report [1979] O J No C 59/ pp 1 et seq and p 66, Sclosser Reports [1979] O J No C 59/ pp 71 et seq. The Lugano and San Sebastian Conventions (Current EC Legal Developments Series) (1990), includes preparatory «Jenard/Möller Report», Norberg and others EEA Law. A Commentary on the EEA Agreement (1993) pp 50, 189, 193 and 386, N Wahl The Lugano convention (1990); (SC:) Rognlien Luganokonvensjonen (1993) and in Juristkontakt 1990 No 1 pp 2 et seq, S Stefansson TfR 1994. 1, Pålsson SvJT 1990.441, M Berglund SvJT 1994.481, L Pålsson SvJT 1994. 1 (on arbitration and Lugano), SvJT 1994.593 SvJT 1997.109 (comments on current cases). M Bogdan TfR 1991.387.

128. ND 1985. 119 E (question of incorporation of jurisdiction clause in bunkers contract), NJA 1969. 529 (reference to German jurisdiction in a Swedish-German sale of goods transaction considered valid), FiHD 1982-11-11 NDs 1982. 529 (jurisdiction clause pointing to Bologna meant dismissal in claim filed in Finland). On jurisdiction in international product liability claims, see Convention 2 October 1973 and now Norwegian Product Liability Act 23.12.1988 No 104 § 1-4 and «Treasure Saga» Rt. 1987. 851, where NHR accepted jurisprudence in spite of a parallel suit («forum shopping») in USA (=ND 1987. 178, cf ND 1986. 212 Oslo). In disputes with creditors, however, jurisdiction clauses may prove insufficient to avoid lex situs, UfR 1978. 876 DaHR and UfR 1987. 766 DaHR («salgspant» lien clause), cases which are believed to express general attitudes in Scandinavian bankruptcy and insolvency law on the matter.

129. Comp (more restricted) The Brussel Convention 1968 On Jurisdiction and the Enforcement of Civil and Commercial Judgements Art 13 et seq.

130. Lugano differs from the 1968 EEC Convention in this respect. Venue provisions in the 1915 Civil Code which need adjustment is in particular the venue where claimant has possession or belongings under § 32, see Hov Rettergang i sivile saker (2nd ed 1994) p 52 et seq. (SC)

131. [1980] O J L 266/1, consumer domicile provisions in Art 5.

132. 1955 Convention Members states which have later become EC/EU members will enjoy supremacy for the 1955 regime over the 1968 EC Convention on civil judgements, as will similarly be the case of Lugano, see Rome/Maastricht'/Amsterdam Treaty Art 307 (ex 234) and the EEA Agreement Final Joint Declaration No 23. on the relationship between the EEA Agreement and existing agreements prior to the 1992 EEA regime.

133. In contracts outside the scope of statutory law, the choice of law under Norwegian law applied by Norwegian courts will follow the discretionary «closest link» criterion expressed by Norw Supreme Court in the old well reputed «Irma Mignon» case Rt. 1923.II.58.

134. Two standard comprehensive handbooks on the Norwegian 1915 Acts are J Hov Rettergang i sivile saker (2nd ed 1994) and J E A Skoghøy Tvistemål (1998). (SC).

135. A standard handbook on arbitration awards (=Swedish «skiljedom») under Norwegian law is H J Mæland Voldgift (1988) (SC), but the topic is also dealt with in different places in J Hov op cit and J E A Skoghøy op cit. Cf UNCITRAL 1985 Model Law on Arbitration and ICC Rules of Conciliation and Arbitration (1998) ICC Publ No 447-3.

136. Rt. 1991. 635, Rt. 1991. 773, Rt. 1993. 777.

137. Illustration of different arbitration clauses scope or interpretation issues in the 1990'ies Supreme Court records : Rt. 1993.1431, Rt. 1994. 288 , Rt. 1994.1024.

138. On the division of powers and authorities between arbitrators and parties in lack of contract prior to the commencement of the hearings, see Krüger Festskrift Ole Lando 1997 pp 217 et seq («Default remedies in International Arbitration Proceedings»).

139. ICC Publication No 447-3 Rules of Conciliation and Arbitration, in force as from 1998-01-01.

140. Rt. 1992.1552 is an example of an enforcement scenario for a Norwegian arbitration award to be executed in Sweden. Current comments on maritime arbitration awards affecting Norwegian shipping industry (charter parties, sale of second hand tonnage, shipbuilding disputes) are found in Northern Shipowners Defence Club Member Publication, see as an example NM 551 (1998) p 5599 on the Saleform 1993 MOA standard form for purchase of ships subject to «as is» clauses (MOA Art 11).

141. Publ No 447 (January 1st 1988). On «lex mercatoria» in international arbitration, see O Lando UfR 1985.B. 1 and A Philip UfR 1992.B.121.

142. Mæland Voldgift (1988) pp 228 et seq. (SC)

143. On enforcement of international arbitration in Scandinavia, see broad statements on the subject in Rt. 1987.1449 (concerning ICC Arbitration effect under Norwegian law), also NJA 1980. 84 (French arbitration enforceable in Sweden), NJA 1989. 143 (review of Swedish arbitration award in international dispute). On international arbitration in Norwegian literature, see Haug Festskrift Ryssdal 1984.603, Saario JFT 1983.351. An extensive monography on arbitration under Norwegian law is Mæland Voldgift (1988). See also Brækhus Festskrift Bratholm 1990 p 447 (on the persuasive power of arbitration awards). (SC)

144. ND 1966. 234 SvV (ship purchase; arbitration in Sweden meant choice of Swedish law).

145. Rt. 1958. 220, NJA 1989. 143.

146. Case references in this book are marked «NV», «DV» and «SV» to indicate the country and to identify the decision as an arbitration award.

147. One obstacle seems to be the confidentiality of any arbitration award, necessitating the consent of both parties to let outsiders including legal writers read or utilize the case. A compromise is to let legal scholars utilize such material, but under confidentiality and assuming anonymity for literature references. On the 1998 ICC revision of the Arbitration clause, see S Jarvin SvJT 1998.289. Cf otherwise S Jarvin - Y Derains Collection of ICC Arbitration Awards.

148. Rt. 1918. 680, Rt. 1918. 742, Rt. 1920. 314, Rt. 1920. 417, Rt. 1920. 505, Rt. 1921. 142, Rt. 1922. 562, Rt. 1924. 836.

149. Cases on burden of proof in connection with dispatching goods which may have been damaged before passing of risk are Rt. 1911. 588, Rt. 1913. 199 Bergen, Rt. 1921. 103, Rt. 1927. 43, Rt. 1932. 833, Rt. 1948. 121, RG 1965. 105 F. The statutory documentary procedures for Bills of Lading now provide for a carriers' liability for particulars included in the document, combined with a liability for failing proper inspection of goods in place of shipment, cf Uniform Scandinavian Maritime Act §§ 162-63 (contents of 1994 Scandinavian Maritime Act Reform explained in Falkanger-Bull op cit pp 26-27 (ENG).

150. ICC Publ No 421.

151. Reported cases in fob contracts are Rt. 1921. 142, Rt. 1923. 463, Rt. 1924. 43, Rt. 1924. 173, Rt. 1824. 836, Rt. 1925. 389, Rt. 1927. 43, in cif contracts Rt. 1921. 320, Rt. 1921. 430, Rt. 1932. 481. A case dealing with buyer's duties under franco delivered terms is Rt. 1937.1005. The only specifically commercial court in Scandinavia, the Danish Maritime and Commercial Court in Copenhagen («Sø- og Handelsretten») has of course cases on export and import disputes, cf UfR 1977. 229 SøHa, UfR 1988.1068 SøHa. On choice of fob-clause, see Sevón JFT 1982. 26 (SC).

152. ICC INCOTERMS 1990 is identified as ICC Publication No 460. The Danish anthology «INCOTERMS 1990» by Lando, Laudrup and Theilgaard (1990) gives a systematic explanation of the terms (SC). See also Ramberg International Commercial Transactions (1997) pp 56 et seq.

153. The reader is directed to literature specifically dealing with such issues, such as Ramberg International Commercial Transactions (1997), also in Festskrift Grönfors 1991 pp 357 et seq (SC), Debattista Sale of Goods Carried by Sea (1990).

154. On Letters of credit under Scandinavian law, see Gorton Rembursrätten (1980)(SC). On 1993 UCP 500 see ICC Publication No 511 «UCP 500 & 400 Compared. An article-by-Article detailed analysis of the new UCP 500 compared with the UCP 400». A few survey observation on the UCP 500 are made supra § 12.8. On the UCP 400, see also Ramberg-Persson Rembursreglerna 1983 (1985) (Commentary), L Gorton JT 1993/94 .38, P Hammarskiöld JT 1996/97.870.

155. A Swedish decision NJA 1984. 627 is of interest for general policy issues in connection with UCP. See also NJA 1983. 332 (reasonableness test under «generalklausul» § 36 applied to bank letter of credit conditions).

156. European Economic Area Agreement signed Oporto May 2nd 1992 between the then EFTA states including Norway and the then European Community on the other.

157. Expected amendments in future Norwegian law may come with the EU proposals for directives expected through the EEA «pipeline» Commission Proposal for a European Parliament and Council Directive on the sale of consumer goods and associated guarantees COM(1998) 217 final - 96/0161(COD) 1.4.1998 (OJ 1998 No C 148/12 14.5.1998).

158. The author is not saying that all suppliers are crooks. The distinction must be drawn between the supplier who provoked by discontent customers considers any complaining consumer as a declared enemy who must be fought out of the business premises at any rate on the one side - and on the other suppliers with reasonable balanced systems or arrangement for a neutral, objective and non-hostile dialogue with a complaining customer, including a procedure for the inspection of the product with is reasonably acceptable and reliable to both parties. In the long run, the suppliers will undoubtedly earn time, money and goodwill by sticking to the latter procedure.


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