§ 3-51. The service provider's right to cancel the contract

This section gives the service provider the right to cancel the contract, that is, to end it, when the customer is in breach. The main rule is material breach by the customer. The law also lists several other situations. The customer has knowingly withheld or falsified information that the service provider clearly said was a precondition for an offer, and this is shown later. Bankruptcy or debt negotiation proceedings (negotiation with the creditors on a debt arrangement) are opened against the customer. The customer dies without any co-debtor or guarantor providing satisfactory security in time. The customer has provided collateral, and the conditions in the Mortgage Act or the Maritime Code are met. It is clear that the contract will be materially breached, and the customer does not immediately provide security when demanded.

The collateral alternative refers to the Mortgage Act § 1-9 and the Maritime Code § 44. Under the Mortgage Act § 1-9, the holder of the collateral can demand that the secured claim be repaid before it falls due in cases such as material breach of interest and instalment payments, forced sale of the collateral, debt negotiation or bankruptcy, and if the collateral is lost or damaged so that the security becomes significantly smaller. In some cases, the holder of the collateral must first give notice and a reasonable time limit to remedy the situation. The Maritime Code § 44 has corresponding rules for debt secured by a mortgage on a ship.

The law also has a rule that applies regardless of the contract terms: the service provider can cancel when the customer has acted clearly contrary to honesty and good faith. Other service providers in the same group have the same right if it is objectively justified. For services that have already been delivered, the same limitation applies as in § 3-48 first paragraph third sentence.

Consumers have extra protection. Cancellation can only take place if the consumer has been given two weeks to remedy the situation, but this time limit does not apply in one of the cases in the first paragraph (letter a). The demand for cancellation must be given as a written document. It must state which circumstances the cancellation is based on, which claims the service provider is making under § 3-52, and how the customer can complain under § 3-53. The consumer must at the same time be told how the cancellation can be avoided. The rules on notice of complaint in § 3-47 apply correspondingly to the demand for cancellation.

The consequences of cancellation are set out in § 3-52. The customer's own right to cancel is set out in § 3-48, and § 3-46 refers to this section in cases of breach by the customer. Compensation (erstatning) and exemption from liability are found in §§ 3-49 and 3-50. § 5-5 on breach of the duty to carry out a credit assessment (kredittvurdering) is also listed as a section that refers to this one.