§ 16. What happens when the agreement is cancelled?

This section sets out what happens to the money and the materials when an agreement has been cancelled (the consumer has withdrawn from the agreement). The main rule is strict on the service provider: when the entire agreement is cancelled, he cannot claim payment for the work. The consumer does not have to pay for a service he has not received as agreed.

The service provider nevertheless has a right to get materials and the like back, as far as this can be done without significant inconvenience or cost to the consumer. For materials that cannot be returned, the service provider is entitled to a reasonable amount. The amount cannot exceed the value the materials have for the consumer. Example: materials that are still lying untouched can be collected, while materials that have been built in and cannot be removed without great cost entitle the service provider to reasonable compensation.

If only the part of the work that remains is cancelled, the rule is different. The service provider is then entitled to the price for the entire service, but what it would normally cost to have the remaining part done is deducted. The idea is that the consumer should pay for what has actually been delivered, and no more.

If the service provider has to pay money back, in whole or in part, interest is added to the amount. The interest is calculated from the day the service provider received the payment. Here the law refers to another act on interest on late payments, of 17 December 1976 No. 100.

This section links several parts of the Act. The rules on cancellation of the contract in the event of delay (forsinkelse) are in § 15, and the rules on cancellation of the contract in the event of a defect (mangel) are in § 26. In addition, § 44 on the settlement (oppgjør) on cancellation of the contract refers to this section. Otherwise, the section belongs together with § 11, § 12, § 13 and § 14 on delay.