§ 54. The seller cancels when you do not pay

The seller can cancel the purchase (heve kjøpet) if you do not pay and the breach is material, or if you do not pay within a reasonable additional deadline (tilleggsfrist) that he has set. While the additional deadline is running, he cannot cancel — unless you say outright that you will not pay. If you have already taken over the goods, the seller can only cancel if he has made a reservation to that effect or you reject the goods.

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

Machine-translated from Norwegian. The Norwegian text is the one that applies. Read the original in Norwegian.Norsk English العربية Polski Українська

The text of the law (unofficial translation)

(1) The seller may cancel the purchase because of late payment if the buyer's (kjøper) breach of contract (kontraktbrudd) is material.

(2) The purchase may also be cancelled if the buyer does not pay the purchase price (kjøpesum) within a reasonable additional deadline that the seller (selger) has set for performance (oppfyllelse).

(3) While the additional deadline is running, the seller cannot cancel, unless the buyer has said that he will not perform within the deadline.

(4) If the goods have already been taken over by the buyer, the seller can only cancel if he has made a reservation to that effect or the buyer rejects the goods.

Source: Lovdata — Kjøpsloven (the Sale of Goods Act) § 54

What does this mean?

The mirror image of § 25 — the seller can cancel in the same way as the buyer, just the other way round.

Material breach (first paragraph): If late payment amounts to a material breach (vesentlig kontraktbrudd), the seller can cancel directly. Whether it is "material" depends on:

Additional deadline (second paragraph): The seller can set a reasonable additional deadline. If you do not pay within it, he can cancel.

Wait out the deadline (third paragraph): While the additional deadline is running, the seller cannot cancel — unless you say outright that you will not pay.

Goods already taken over (fourth paragraph): A special rule. If you have taken over the goods, the seller cannot simply cancel. Two exceptions:

The logic: when the goods are with you and you are using them, cancellation of the purchase (heving) becomes more complicated. The seller must have taken steps in advance or be faced with an active rejection.

Examples

Eva runs a small company and buys equipment for NOK 65,000 on invoice (faktura). The due date passes. Eva does not respond to reminders. The seller sets an additional deadline in writing: "You have 14 days to pay, otherwise we will cancel the purchase and demand the goods back." Eva still does not pay. The seller can now cancel under § 54 (2). He demands the goods back and can also claim compensation (erstatning) for loss (§ 57). If the goods have already been resold or installed at Eva's premises, cancellation becomes difficult (cf. § 54 (4)) — unless the seller has taken a seller's security right.

Tom sells a specialised machine for NOK 280,000 to a company, with payment over 12 months. He takes a seller's security right — a formal reservation of ownership until payment is complete. When the company does not pay, Tom can cancel under § 54 and use the seller's security right to take the goods back. He has made the reservation required by § 54 (4).

Common mistakes

  1. As a seller: demanding cancellation without having set an additional deadline — this can backfire on you
  2. Setting far too short an additional deadline — it must be reasonable
  3. As a seller: forgetting a seller's security right when allowing deferred payment — this makes cancellation difficult
  4. As a buyer: thinking that late payment automatically means the seller takes the goods — as a rule not without a reservation

What should you do?

As a seller:

As a buyer:

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