§ 3-49. Compensation when the service provider breaches its obligations

This section is the Act's rule on compensation from the service provider. The service provider is liable for financial loss resulting from its obligations under § 3-1 first paragraph not being fulfilled, to the extent the loss could reasonably be foreseen. This is where the Act's general requirements for the service provider come in: to disclose its own conflicts of interest, to act honestly and fairly, and to act with professional diligence.

The second and third paragraphs extend the liability. If the service provider uses a subcontractor who under the agreement is to help fulfil the obligations, the customer can hold both the service provider and the subcontractor liable for loss the subcontractor causes. If someone, without an agreement, claims to be the service provider or to represent it, the service provider can also be liable for the customer's loss. This does not apply if the service provider could not be expected to know of the situation, or had tried to warn its customers through reasonable measures.

The fourth paragraph governs how much can be claimed. The compensation shall cover the financial loss the customer has actually suffered. The Damages Act comes in as a corrective: the compensation can be reduced or lapse if the customer has contributed to the loss or has not limited it. In that case, account is taken of the conduct, how much it mattered for the damage, how large the damage is and the circumstances in general. The compensation can also be moderated (reduced) when the liability seems unreasonably burdensome, taking into account, among other things, the size of the damage, the financial capacity of the liable party and whether insurance exists. The fourth paragraph also refers, by way of exception, to § 5-5, a section headed Breach of the duty to carry out a credit assessment (kredittvurdering) or the duty to refuse credit (avslagsplikt).

How the chapter fits together: § 3-46 establishes that a breach of the service provider's obligations can give rise to both cancellation of the contract (heving) under § 3-48 and compensation under this section, but not for breaches caused by circumstances on the customer's side or other circumstances the service provider is not responsible for. § 3-47 requires the customer to give notice of complaint (reklamasjon) within a reasonable time, and for a consumer (forbruker) never less than two months. § 3-50 exempts the service provider from liability in the event of unusual circumstances beyond its control. § 3-53 requires the service provider to have procedures for handling complaints. § 3-51 and § 3-52 concern the service provider's right to cancel the contract and the effects of doing so.

Example: a service provider acts dishonestly towards a customer and thereby breaches its general obligations. The customer suffers a financial loss that the service provider could reasonably foresee. The service provider is then liable for the loss. If the customer had failed to limit the loss, the compensation could be reduced.