§ 64. What happens when the purchase is cancelled
When the purchase is cancelled, both parties' obligation to perform lapses. What you have handed over can be claimed back — you return the goods, the seller (selger) returns the money. You can hold on to what you have received until the other party does their part. Contract terms on secrets, dispute resolution and the parties' rights after the cancellation remain in force.
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) When the purchase is cancelled, the parties' obligation to perform the purchase lapses.
(2) If the purchase has been wholly or partly performed by either side, what has been received may be claimed back. A party may nevertheless hold back what he has received until the other party returns what he has been given. The same applies when the party is entitled to compensation (erstatning) or interest and adequate security (betryggende sikkerhet) is not provided.
(3) If the seller is to make a replacement (omlevering), the buyer (kjøper) may hold back what he has received until the replacement takes place.
(4) The cancellation of the purchase has no effect on contract terms concerning trade secrets, the resolution of disputes or the parties' rights and obligations resulting from the cancellation.
What does this mean?
Cancellation of the purchase (heving) is not just "the agreement is over". It is an active process where you have to clean things up.
The obligations lapse (first subsection): You no longer have to pay, and the seller no longer has to deliver. That puts an end to future obligations.
Returning what was given (second subsection): What each side has handed over must go back. You return the goods; the seller returns the money. Each party can hold on to what they have until the other party returns theirs — it is an exchange, one for the other. If you are entitled to compensation or interest, you can also hold back until adequate security is provided.
Replacement (third subsection): If the seller is to make a replacement (new goods instead of cancellation of the purchase), you can keep the goods you have until the new ones arrive. You are not left without protection while you wait.
What survives (fourth subsection): Certain contract terms still apply:
- Trade secrets: Confidentiality agreements you have signed remain in force. Cancellation of the purchase does not give you the right to publish the seller's price lists.
- Dispute resolution: Arbitration (voldgift) or choice of court (verneting) clauses. Even though the purchase has been undone, the rule on where a dispute is to be resolved still applies.
- Rights after the cancellation: Claims for compensation, interest, repayment — these are exactly what must be dealt with.
Examples
Lars has bought a car for NOK 145,000. After a month, he cancels the purchase because of hidden faults. The seller agrees. Lars must return the car. The seller must return NOK 145,000. Lars can keep the car until the money is in his account. The seller can hold back the money until the car has been handed over. In practice, they meet and make the exchange — car and money transfer at the same time. If Lars has spent NOK 5,000 on a repair that he was to have covered, he can hold back the car until adequate security has been provided for this additional claim.
Eva has bought a sewing machine with a defect (mangel). The seller offers a replacement — he will bring a new one in two weeks. Under § 64 (3), Eva can keep the defective machine until the replacement takes place. She does not need to hand anything over before she gets a new one.
Common mistakes
- Returning the goods before the seller has paid — risky
- The seller repays before the buyer has returned the goods — risky
- Forgetting that confidentiality agreements survive cancellation of the purchase
- Believing arbitration clauses no longer apply — they do
What should you do?
On cancellation of the purchase:
- Confirm the cancellation in writing, with the date
- Agree on the practical arrangements for the exchange back
- Meet for a simultaneous exchange — or use escrow
- Hold on to what you have until the other party does their part
- Invoice compensation and interest separately
- Keep the remaining contract terms in mind