§ 40. Compensation (erstatning) for defects

You are entitled to compensation for losses that the defect (mangel) caused you. The seller (selger) is only let off if he can show that the defect was due to an obstacle beyond his control. Indirect losses (indirekte tap) (lost profit, business interruption) are only covered if the seller was negligent or made promises about the qualities of the goods.

The Sale of Goods Act (Kjøpsloven)·LOV-1988-05-13-27

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The text of the law (unofficial translation)

(1) The buyer (kjøper) may claim compensation for the loss he suffers as a result of a defect in the goods, unless the seller proves that the defective delivery (levering) is due to an obstacle as mentioned in § 27. The other rules in §§ 27 and 28 apply correspondingly.

(2) The rules in the first paragraph do not cover such indirect loss as mentioned in § 67 (2).

(3) The buyer may in any case claim compensation if a. the defect or the loss is due to error or neglect on the part of the seller, or b. the goods, already at the time the contract was made, deviated from what the seller had assured.

Source: Lovdata — Kjøpsloven (the Sale of Goods Act) § 40

What does this mean?

The defect may have cost you more than just the reduction in the value of the goods. You had to buy something else, rent something in the meantime, fix damage. You can claim compensation for that extra burden.

Main rule (first paragraph): Strict liability (kontrollansvar). The seller must pay for the loss — he is only let off if he can show that the defect is due to an obstacle beyond his control, which he could not foresee or avoid. A defect in goods rarely meets this test — the manufacturer is supposed to check for it.

Direct loss (direkte tap) is covered — extra expenses directly linked to the defect.

Indirect loss is not covered under the main rule (second paragraph). What is indirect loss?

To get indirect loss covered, you must fall under the third paragraph:

Exceptions (third paragraph):

Comparison: Which basis for which compensation?

Type of lossBasis
Extra repair (direct)§ 40 (1) — strict liability
Price difference on a replacement purchase (dekningskjøp) (direct)§ 40 (1)
Rental costs while the goods are away (direct)§ 40 (1)
Lost profit (indirect)§ 40 (3) — requires negligence or assured qualities
Business interruption (indirect)§ 40 (3)
Damage to other things (indirect)§ 40 (3)

Examples

Sara buys a new fridge. It turns out to be badly designed — the temperature is too high. She loses food worth NOK 2,500 and has to buy a cool box for NOK 800 while the repair is under way. Under § 40 (1), Sara can claim these NOK 3,300 as direct loss. The seller cannot show that the design fault was beyond his control — it is a manufacturer's fault. Sara gets compensation.

Ola runs a small manufacturing business. He buys a specialised machine that turns out to be defective. Production stops for two weeks while the repair is under way. Lost profit: NOK 65,000. Lost profit is indirect loss (§ 67 (2) letter c). It is not covered by § 40 (1). To get it covered, Ola must show either the seller's negligence or that the seller had vouched that the machine would work in a particular way.

Common mistakes

  1. Claiming indirect loss without showing negligence or guarantee claims
  2. As a seller: thinking you get off because the defect was "your supplier's fault" — that is not enough, you have strict liability
  3. Forgetting to limit your own loss (§ 70)
  4. Including "annoyance" and "stress" — hard to get covered without documented financial loss

What should you do?

Documentation is everything:

Written compensation claim:

"I claim compensation for the following losses resulting from the defect in [goods]: [specify each loss with amount and documentation]. Total: NOK [sum]. Documentation is attached. Please pay the amount within 14 days."

Frequently asked questions

Can I claim compensation and a price reduction (prisavslag) at the same time?
Yes. A price reduction covers the difference in the value of the goods. Compensation covers your extra costs. They are two different things.
How far does "direct loss" go?
What is an immediate consequence of the defect and can be documented financially. Repair, replacement purchase, extra shipping. Not knock-on effects over time.
Related sections
All sections of the Sale of Goods Act →
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