1. Introduction
NS 8407 Chapter I contains general provisions, and one has much the same provisions of NS 8405 Chapter I. NS 8406 does not have chapter divisions, but it contains several of the relevant provisions.
As previously pointed out, NS 8407 is most often used in projects as of today, and therefore it is based on this.
2. Overview of the rules
3. Brief presentation
We have written our own articles on “Contract documents and rules of interpretation”, “Meetings” and if “Notifications and requirements”.
Topic “Contract documents and rules of interpretation” is not only of interest when the parties are to map out what is the correct delivery while building, taking over or in case of dispute. It is also important to know these rules when negotiating a contract. This is when you lay the foundation for how the contract will be, what will be delivered and when. Ambiguities increase the risk of dispute.
“Meetings” is primarily about construction meetings (NS 8405 and NS 8406) and builder meetings (NS 8407). These meetings are the supreme cooperative body where decisions are also made in ordinary matters.
“Notifications and requirements” is an important topic in especially the NS 8405 and NS 8407 contracts. When these standard contracts are applied, the general rule is that claims are forfeited — precluded — if they are not notified in accordance with the provisions. Similarly, rights can be lost if the person receiving the notice does not respond in accordance with the provisions of the contract.
4. Collaboration and Loyalty
In all contractual relations, there is an unwritten rule and duty to cooperate loyally with one's co-contractor.
At the same time, it should not be forgotten that the parties to a construction contract are traders with a need for, and requirements for, earnings.
It is perhaps for this very reason that it is important to be reminded of the duty of loyalty, and that it is mutual.
Most people have a reasonably equal understanding of the core area of loyal conduct and what lies in the concept of cooperative duty. Most people will probably also have much the same opinion if someone acts dishonestly.
Therefore, it is enough in the “gray zone” that one can face challenges in distinguishing between loyal and disloyal behavior. It is especially hoped that the provision on cooperation and loyalty in NS 8407 paragraph 3 and NS 8405 paragraph 5 acts as a motivating and as a reminder. By contrast, it is not easy to enshrine clear legal duties or rights in these provisions.
5. Briefly about collateral and insurance
Experience-wise, these two topics do not raise many challenges in practice.
There are, however, two situations that we want to mention in terms of security.
Both parties are obliged to provide collateral for their contractual obligations, cf. NS 8407 paragraphs 7.2 and 7.3.
It follows from NS 8407 paragraph 7.1, second paragraph, that neither party is obliged to provide anything until the counterparty has provided its security. This means that the general contractor is not obliged to start his works until the builder's security has been received, while the builder is not obliged to pay installments until the general contractor has provided his security.
If such security is not provided and the other still pays its benefits, one can come to a point where one can legally be considered to have waived his claim for security from the other. In this case, this will depend on an overall assessment of what has happened between the parties, and will have to be assessed according to the guidelines we have written about in the article on concluding agreements by conclusive conduct. In this article, you can read here.
The same rules follow from NS 8405 paragraph 9.2, first paragraph and 9.3, first paragraph and NS 8406 paragraph 8.
Once the contract object has been handed over, the contractor's security shall be reduced from 10% to 3% in the following three years. In this regard, it is fair to note that the complaint period in NS 8405, NS 8406 and NS 8407 is five years. Furthermore, it is pointed out that the Bust Registration Act requires that the guarantee to the consumer shall be 10% of the total remuneration, and apply for five years from the date of the takeover, section 12, third paragraph. If the agreement with the consumer includes a “right to reason”, the guarantee shall be at least 5% of the total remuneration and last for five years, cf. Section 12, fourth paragraph of the Bust Registration Act.
The 10% security applies even to the takeover business and is a security for defects and other requirements that the builder invokes at the latest at the time of the takeover.
If the extent of defects and defects detected up to and including the takeover transaction is too high, a builder will normally notify the guarantor that a 10 to 3% guarantee receipt is not accepted. This is in order to have certainty about their counterclaims and possible remediation costs on their own behalf. The rules on receipt of warranty are contained in NS 8405 paragraph 9.4 and NS 8407 paragraph 7.4, respectively.
