I. The Main Sources of Law for Construction
The main sources of law that govern and regulate contracts for construction are the different standard documents agreed and developed by contractors and builders in collaboration. For instance, the NS 8405 is designed for a contractual relationship in which one party (the contractor) agrees to undertake building or civil engineering work for another party (the client), where most of the drawings, descriptions and calculations are to be provided by the client. NS 8407, on the other hand, is a classic procurement and construction (design and build (D&B) procurement) document.
Most of the standard documents have been interpreted by legal theory and case law.
In addition, the Planning and Building Act of 2008 (and its related regulations), lays down formal standards which apply to construction projects.
II. Limitation Rules
Monetary claims, including claims for damages that have a contractual basis, are subject to a three-year limitation period imposed by the Limitation Act of 1979. The limitation period runs from the date on which the creditor/claimant first had the right to demand performance. For claims based on breach of contract, the limitation period starts on the day on which the breach occurred. This start date may vary, depending on the dispute and when the effect of the breach of contract occurred.
If the creditor has not pursued the claim because he or she lacked the necessary knowledge of the claim (or the necessary knowledge of the debtor), the period of limitation may be extended. If the conditions for extending the limitation period are fulfilled, the limitation period will expire, at the earliest, one year after the date on which the creditor obtained, or ought to have obtained, the necessary knowledge of the claim or the debtor. The limitation period cannot be extended on such grounds by more than 10 years (i.e. a total of 13 years).
Claims for damages which do not have a contractual basis are subject to a limitation period of 3 years from the date on which the injured party obtained, or ought to have obtained, the necessary knowledge of the damage and the tortfeasor – up to a maximum of 20 years from the date on which the damage was caused.
In addition, some of the standard documents include regulations on notification periods, some of which may have preclusive effects. For example, for any variation claims rejected by the client under a D&B standard document (NS 8407), the contractor must take necessary steps to initiate ordinary court (or arbitration) proceedings no later than eight months after the taking over of the entire contract work. Failure to do so may result in a loss of the variation claim.
Limitation periods may be interrupted in different ways:
Firstly, a limitation period is interrupted when the debtor has expressly, in words
or deeds, acknowledged his or her debt to the creditor. Secondly, a limitation period is interrupted when the creditor initiates legal proceedings against the debtor in order to obtain a court judgment, arbitral award, judicial appraisal or similar ruling. A third way of interrupting a limitation period is to bring the claim before a public administrative body with specific powers to rule on such a claim, or to bring
the claim before a complaints body established by, or with the assistance of, the
debtor or a trade association to which the debtor belongs. Fourthly, if the creditor has a legal basis for enforcement of his or her claim, the limitation period is interrupted by instituting enforcement proceedings (distraint or full coverage). Lastly, the creditor will interrupt the limitation time by petitioning for bankruptcy proceedings or probate estate settlement. If the debtor's estate is entered into receivership or subjected to judicial debt composition or probate settlement, the
limitation period in respect of all claims notified by the expiry of the notification time
limit is interrupted by such notice.
III. Court Proceedings
A case starts directly in the District Court, that has jurisdiction. A case is started by a writ of summons (stevning) setting out the facts supporting the claim, the legal basis and a plea for relief, accompanied by any written evidence that the case requires and a list of witnesses to be heard, or requests for the other side to submit evidence (see Question 16). The writ of summons is typically more descriptive than English law writs.
Lawyers must send all submissions (including copies of written evidence) electronically through a designated portal only. The Dispute Resolution Act pre-supposes that the time from the writ of summons is submitted to the District Court until the main oral hearing will not be more than six months.
The court serves the document on the defendant (or counsel, if known, and then electronically through the portal), with a time limit (normally three weeks) to reply. The time limit can be extended on application, but if not observed (including extension), a judgment by default will normally be entered against the defendant if demanded by the claimant. Sending the reply brief to the court (for lawyers: filing in the portal) is the operative event to break any time limit set for reply.
The reply brief (tilsvar) follows the same layout as the writ of summons, with a description of the facts, legal basis and plea, accompanied by evidence.
Shortly after the reply brief is received, the court calls for a planning
conference (normally held on the telephone) with both counsel attending, at which the following is typically discussed: the date for and length of the main oral hearing, and date for final submissions, any procedural issues, and whether mediation should be attempted.