§ 3-48. The right of the customer (kunde) to cancel the contract in the event of breach

This section gives the customer the right to cancel the contract (end it because the other party has seriously breached it) when the service provider is in breach. The right applies even if the contract has its own rules on notice of termination or cancellation of orders. If the service has already been delivered, the contract can only be cancelled if the customer has insignificant benefit from what has been delivered, and the service provider does not suffer an unreasonably large loss. However, if the purpose of the contract has been substantially ruined by the breach, this limitation does not apply.

Cancellation of the contract means that the parties no longer have to perform the contract. If something has already been delivered or paid, it can be claimed back as far as possible. The same applies to any return or benefit a party has had from what has been received. The service provider must pay interest under the Late Payment Interest Act from the date of the notice of complaint. Each party can demand that the return takes place at the same time, as security for its own claim.

An example using the roles in the law: a service provider does not deliver what was agreed, and the breach is material. The customer gives notice in time and cancels the contract. The customer can then claim back what has been paid as far as possible, and the service provider owes interest from the day the customer gave notice of complaint.

§ 3-46 refers to this section as a sanction for breach of § 3-1 first paragraph, together with compensation (erstatning) under § 3-49. The deadline for giving notice of complaint is set out in § 3-47, and § 3-50 exempts the service provider from liability in exceptional circumstances. The service provider's own right to cancel the contract is regulated in § 3-51, and its effect in § 3-52. The mandatory nature of the law in § 1-9 is also listed as a section that refers here.