In general, the Nordic countries Contracts Act is in a large scale harmonized, and stand as a monument over the legal collaboration between the Nordic countries. Section 36 of the Contract Act in the Nordic countries represent a general clause for when a contract is to be considered as unreasonable. The courts can by using Section 36 partially or wholly set the contract aside if the contract is seen to be unreasonable enough. The purpose of this paper is to investigate whether the Norwegian and Danish courts are using the Contracts Act§ 36 differently with respect to the term about subsequent circumstances.
After a legal and economic analysis focusing on 8 verdicts, 4 from Norway and 4 from Denmark, the case rulings in this paper shows a clear tendency to that where the Danish courts use Section 36 alone, without discussing other relief rules, Norwegian courts use other relief rules to give debt to their verdicts. In other words, in Danish law Section 36 can be used by itself as long as the contract is considered unreasonable enough, while in Norwegian law the threshold to use Section 36 is higher, and therefore the courts also discuss other relief rules in order to justify the use of Section 36.
The economic analysis showed that the courts are willing to provide reliefs where one party’s consequences by keeping the contract valid is higher than setting the agreement wholly or partially aside or if the rationality have been limited, because the total socioeconomically benefit gets higher by providing relief. Further it also shows that the courts are willing to set an agreement aside if the risk allocation already ex ante was inoptimal. By setting the agreement partially aside the courts can make the risk allocation between the parties better in order to secure a value maximizing contract, and therefore a relief is considered as economic efficient.
|Educations||MSc in Commercial Law, (Graduate Programme) Final Thesis|
|Number of pages||78|
|Supervisors||Kim Østergaard & Henrik Lando|