§ 61. When you can suspend performance because of an anticipated breach of contract
If, after the purchase, it becomes clear that the other party will not keep their side of the deal — because of their conduct, a failure of creditworthiness or lack of ability — you can suspend your own performance (oppfyllelse). The seller (selger) can also prevent the goods from reaching the buyer (kjøper). But you must give notice immediately, and you must continue if the other party provides adequate security (betryggende sikkerhet).
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) If, after the purchase, it becomes apparent from a party's conduct or from a serious failure in his creditworthiness or ability to perform that he will not perform a substantial part of his obligations, the other party may suspend his performance and withhold his own counter-performance.
(2) If the seller has already dispatched the goods and circumstances on the buyer's side as mentioned in the first paragraph become apparent, he may prevent the goods from being handed over to the buyer or his bankruptcy estate (bo). This applies even if the buyer or the estate has received a transport document (transportdokument).
(3) The party who suspends performance or prevents the goods from being handed over must immediately notify the other party. If notice is not given, the other party may claim compensation (erstatning) for loss that could have been avoided had he been notified.
(4) A party who has suspended his performance or prevented the goods from being handed over must continue performance if the other party provides adequate security for his performance.
What does this mean?
The law gives you a way to protect yourself when the other party's problems become obvious — without waiting for the breach itself.
When can you suspend? (first paragraph) Three situations:
- Conduct: The other party has acted in a way that shows he will not perform (stops replying, says so, behaves as if the agreement is dead)
- Credit failure: There is a serious failure in the other party's creditworthiness (bankruptcy notice, many unpaid invoices (faktura))
- Lack of ability: It is clear that the other party does not have the funds or capacity to perform
The condition is that it will affect a substantial part of the obligations. For purchases of a used home, these principles apply as a supplement, see anticipated breach of contract in home purchases. Suspicion is not enough — it must be clear.
What can you do? Suspend your own performance. If you are the seller and have not sent the goods — do not send them. If you are the buyer and have not paid — do not pay.
Goods in transit (second paragraph): The seller can stop the goods on the way even if the buyer has received the transport document. This is a significant right — in practice it is called the "right of stoppage" («stansningsrett») and is particularly important if the buyer becomes insolvent.
Duty to notify (third paragraph): You must give notice immediately. If you stop without saying anything, the other party can claim compensation for loss he could have avoided with early notice.
Security saves the agreement (fourth paragraph): If the other party provides adequate security (bank guarantee (bankgaranti), deposit), you must continue. You cannot hold back just because you are nervous — you must continue once the security is in place.
Examples
Eva runs a wholesale business and sells to a company that suddenly gets several media reports about financial problems — reminders, unpaid invoices with others. She has an order ready for dispatch worth NOK 280,000. Under § 61, Eva can suspend the delivery (levering). She notifies the company in writing: "I am suspending the delivery because of a serious failure in your creditworthiness. If you provide a bank guarantee, I will continue." If the company provides a bank guarantee, Eva must deliver. If not, she can then cancel the purchase under § 62.
Tom has sold a specialised machine for NOK 450,000. He has sent it with a carrier (fraktfører), and the buyer has received the consignment note (fraktbrev). While it is in transit, Tom learns that the buyer's company has filed for bankruptcy. Under § 61 (2), Tom can prevent the machine from being handed over — even though the buyer has the transport document. Tom contacts the carrier and demands that the machine be returned or placed with a third party. He notifies the buyer the same day.
Marius delivers meat to a café once a week. The café has been slow to pay for three months. Marius decides simply to stop delivering and says nothing. Under § 61 (3), the duty to notify is breached. Even though Marius has the right to stop, the café can claim compensation for the loss they suffered from not being told in time — for example, that they did not find an alternative supplier sooner.
Common mistakes
- Stopping silently without notifying the other party
- Stopping on vague suspicion without any real failure
- As a seller: forgetting the right of stoppage for goods in transit
- Demanding goods back without providing adequate security yourself
What should you do?
When you are considering suspending:
- Document the grounds: what concrete signs show that the other party will not perform?
- Suspend performance — do not send, do not pay
- Give notice in writing immediately — explain what you are suspending and why
- Offer security as a way out: "If you provide [a bank guarantee/deposit], I will continue"
- Consider cancellation of the purchase (heving) (§ 62) if it is not sorted out quickly
- Claim compensation for concrete losses