§ 26. Cancellation of the contract due to a defect

This section applies when the consumer wants to withdraw from the agreement because of a defect. Cancellation of the contract is a stricter remedy than a price reduction, and the law uses it as an alternative to a reduction. The condition is that the purpose of the service is essentially lost, meaning that in practice the consumer does not get what they were supposed to have.

The consumer does not have to wait until the service is finished. If it is clear before the work has started that the service will have a defect of substantial significance, the agreement can be cancelled even before the service was due to be delivered. The same rule applies to what remains when it becomes clear along the way that it will be defective. Example: during the work, the service provider (tjenesteyter) informs you that the result will not work as intended. The consumer can then withdraw from the agreement for the part that has not yet been carried out.

If, after the work has begun but before it is completed, it becomes clear that a defect will substantially defeat the purpose, the consumer can cancel the entire agreement. In other words, it is not always enough to cancel only what remains. If the defect is less serious, a price reduction is the way to go.

The effects of cancellation of the contract are not governed here. The section refers to § 16, which applies correspondingly. It states that, as a main rule, the service provider is not entitled to payment when the entire agreement is cancelled, that materials (materialer) can be taken back, and that money to be repaid accrues interest (rente). Cancellation of the contract is also one of the claims listed in § 21. Together with § 25 on price reduction, it is the solution when repair of the defect (retting) under § 24 does not succeed.