The Elektronikkbransjen Foundation offers legal assistance to its members. Contact the undersigned if you have questions about the Sales Act, the Consumer Purchases Act, or other legal questions. If we do not reach a solution, you will be referred to Ræder Bing Law Firm, with whom we have an industry agreement. One of our membership benefits is 30 minutes of free telephone assistance from our regular lawyer. During these 30 minutes, it can be clarified whether it is relevant to take the case further. The member is, of course, free to engage this lawyer or others for further follow-up. Members of the industry organisation receive discounted rates on legal services.
Jan Røsholm
+47 928 87 000
jr@elektronikkbransjen.no
See our other membership benefits
Questions and answers
We work to ensure the best possible marketplace. This involves working for predictable framework conditions and clear and good regulation of the interaction between customers and the various players in the industry. Legal assistance is therefore a high priority in the association, as both good information about the current interpretation of Norwegian regulations and the testing of key disputes in the courts help to create clear and predictable conditions for the market.
Below we have gathered many of the most common questions we receive, with corresponding answers. Please feel free to contact us if there is something you cannot find an answer to, or need help with. We are here for our members.
See our latest articles on the topic
- Exchange and replacement
- Right of withdrawal
- Complaints and cancellation
- Consumer dispute decisions related to cancellation
- Compensation
- Various questions from shops and workshops
- Purchases abroad
- Business purchases
- Privacy
- Various questions from workshops
- In-depth on the Marketing Act
Tip! Use Ctrl+f to bring up the search field in your browser, so you can search for what you are looking for.
At the very bottom, you will find relevant laws and regulations.
EXCHANGE AND REDELIVERY
Without receipt
Can we as a shop refuse to exchange an item, as the customer does not have a receipt? Is this relevant in connection with Christmas gifts?
ANSWER:The right to exchange an item is not regulated by law. This means that it is the seller who sets the conditions for exchange. These conditions can be agreed in advance, and are usually described in the store's terms of sale. However, it should be noted that it is customary in Norway to exchange an item after Christmas. It is of course assumed that the item is not used or otherwise degraded. The customer is not entitled to get money back, but must accept a credit note. Such a credit note is normally valid for three years, unless otherwise agreed. Many stores have a one-year validity on their credit notes.
Gift cards
We sell gift cards in our store. We often experience that customers want to "exchange” these for money. Is this possible?
ANSWER: It is not possible to exchange a gift card for money. Most operate with a validity of one year for gift cards, but this must be agreed in advance. If nothing is stated about validity, three years apply.
Exchange rights for sale items
Some shops in other sectors (especially clothing stores) have notices stating that sale items cannot be exchanged. Can we also do this with sale items?
ANSWER: As mentioned above, it is the store itself that sets the conditions for exchanges, as this is not regulated by law. Many stores in our industry have 'open purchase', but the answer to your question is yes, you can refuse to exchange, for example, sale items, but the consumer must be aware of this when the item is purchased.
Items purchased abroad
We often experience that some people want to exchange products purchased abroad, either because our chain also has stores abroad, or because we sell the 'same product'. Are we obliged to exchange this?
ANSWER: The main rule is that the item should be exchanged with the seller. Legally, the rules of the country where the item was purchased apply. However, it may be that chains, etc., have 'internal' rules that allow exchanges across borders.
Why no exchange rights on gifts?
During the Christmas holidays, there are always many who want to exchange items. Are they entitled to this, and if so, where in the Consumer Purchases Act is this stated?
ANSWER: There is no exchange right on an item sold in a store unless the item has a defect. The Consumer Purchases Act does not regulate 'faultless' items. However, it is common for stores to generally allow customers to exchange a Christmas gift, provided it is not used or otherwise deteriorated.
Christmas gifts online
We have an online store. Do we also have to exchange all the Christmas gifts people don't want?
ANSWER: Online sales are regulated by the Right of Withdrawal Act. It states that the customer is entitled to a 14-day right of withdrawal. This applies whether it is Christmas or not. However, the item must be returned in the "same condition" as when it was received. The customer must be prepared to cover the return costs.
Exchange rights on opened items?
Can we refuse to exchange an item if it has been opened, and perhaps even if the packaging is damaged?
ANSWER: As already mentioned, exchanging goods is not legally regulated, but has developed over many years as a customary right. For a store to be able to sell the item again without problems, the item must be unused and undamaged. If the packaging is damaged, the seller can refuse to exchange the item.
RIGHT OF WITHDRAWAL
Wrong about the right of withdrawal?
In issue 06/12 of elektronikkbransjen, I read the answer you give to questions about the right of withdrawal form. I am sending you an email because I believe the answer you give is somewhat incorrect. I believe the right of withdrawal form does not need to be attached in paper form. It is not enough with a link so that the customer can download it if needed, but it should be approved, for example, to send it as an attachment in an email (durable medium). According to the Right of Withdrawal Act §9, the consumer shall "receive the following information in writing on a durable medium that the consumer has access to". Lovdata's definition of a durable medium is "any device that enables the consumer or the trader to store information addressed to them personally in such a way that it will be available in the future for a period sufficient for the purpose of the information, and which allows unchanged reproduction of the stored information."
Answer: My starting point was that a link to a website is not enough, nor is a reference to the customer that the customer must download the form themselves from the online store's website. But an attachment in an email (for example, a pdf file), I agree that should suffice.
Regret the next day?
We sold an expensive sound system to a customer. Delivery was agreed for three days later. The day before delivery, the customer calls and wants to cancel the purchase, as he regretted it. Is he entitled to this?
Answer: I assume that the purchase was made in-store and not via 'distance selling', because then the right of withdrawal act applies. In your case, the item has not yet been delivered, and the customer has the opportunity to cancel this item. This is regulated in §41 of the Consumer Purchase Act, which reads as follows:
If the consumer cancels the item before delivery, the seller cannot uphold the purchase and demand payment. Unless otherwise follows from the agreement, the seller can instead demand compensation for losses resulting from the cancellation. The parties can agree on a standard compensation for cancellation (cancellation fee). The standard compensation cannot be set higher than what compensation under chapter 11 would normally be expected to constitute.
If no cancellation fee has been agreed upon, the seller is entitled to compensation for any losses resulting from the order. An example of this could be shipping if the seller has ordered the item from a subcontractor.
When does the right of withdrawal apply?
In our online store, we sell many types of products, and customers have a right of withdrawal. We sell many parts where the shipping often exceeds the value of the item. The question is whether the right of withdrawal applies regardless of the product's cost?
Answer: In section 2 of the law, which deals with exceptions to the law, it states, among other things: The law does not apply to sales outside a fixed retail location when the total contract sum, including shipping and additional costs that the consumer must pay, is under NOK 300.
Seller on a visit
The right of withdrawal applies to sales outside a fixed sales location. How does this apply to us who conduct door-to-door sales? The order is obtained outside a fixed sales location.
Answer: The law does not apply to sales outside a fixed retail location if the seller or service provider approaches the consumer at their express request, and the agreement concerns a good or service covered by the consumer's inquiry, or a good or service directly related to it. This is also described in section 2.
Lose the right of withdrawal?
We delivered a product to a customer via online sales. The customer wanted to exercise the right of withdrawal within the deadline, and we agreed on a time to collect the product. The problem was that the customer was not at home when we arrived at the agreed time. This happened not just once, but three times. Now, after five months, he calls and asks us to collect the product so he can use the right of withdrawal. What should we do?
ANSWER: You, as the seller, have gone to great lengths for the customer. The customer must also contribute a bit to exercise their right. An example of the customer's contribution is to be at home at the agreed time, or at least make the 'product available'. The Right of Withdrawal Act states that the item must be returned to the seller within a reasonable time. Five months is longer than a reasonable time. In this case, we recommend that you send a letter to the customer, stating that if the right of withdrawal is to be fulfilled, the customer must ensure that the product reaches you, as you have attempted to collect it three times. Set a deadline of one week, and write that if this is not fulfilled, the right of withdrawal will no longer apply.
Order online, collect in store
When a customer orders via our online store, they have the right of withdrawal. But instead of having the item delivered, they can choose to collect it in our store. How does this affect the right of withdrawal?
Answer: The right of withdrawal act applies when the customer purchases a product online or outside a fixed sales location (for example, at a fair). The underlying idea is that the customer cannot 'see and touch' the product before he/she orders. If the customer orders and pays via your online store but chooses to collect the product in the shop, he still has the right of withdrawal. Legally, there is little difference between collecting an ordered (and paid) product at the post office, in a shop, or having it delivered to the door.
The product is used
A customer has purchased a video camera via our online store. It has been returned with a withdrawal form. The product shows signs of use. We do not wish to allow withdrawal on a camera where the product has been used/charged, as it is not possible to resell this without a significant price reduction. Is there any current practice in this area we can follow?
Answer: The right of withdrawal act does not state that the product cannot be tried or unpacked. It should be returned in the same condition as when the customer received it. In many cases, it is common for a product to be tested before any right of withdrawal is used. However, all parts must be returned (e.g., battery and charger). In this case, the customer probably has the right on their side. This does not apply if you have stipulated that the packaging or seal must not be broken, for example, when selling DVDs or games.
Telephone sales
We were called by a telemarketer who sold us an advertisement on the internet. Shortly after, we regretted it. The seller has a recording of the sales conversation where we confirm that we will buy the advertisement. Can we get out of this agreement?
ANSWER: The right of withdrawal applies to purchases made outside a “fixed sales location”, that is, internet, mail order, telephone sales, fairs, and so on. This law gives a consumer a 14-day right of withdrawal, provided that a withdrawal form is attached. In some cases, a customer can have up to one year of withdrawal rights. In your case, this is an agreement made between two companies, so-called professional parties. Therefore, the right of withdrawal does not apply, but the contract law does. In your case, I think it will be difficult to cancel the purchase of this advertisement.
COMPLAINTS AND CANCELLATION
Requirements for spare parts
We have a case where a customer has purchased a product that is now out of warranty. The product has stopped working, and the customer wants to pay for a repair. We no longer produce the product, and we also have challenges in obtaining spare parts. What requirements does the customer have in this case? Is it legally required how long we must supply spare parts for discontinued products?
Answer: You are not obliged to have spare parts at all. During the warranty period, a consumer is entitled to have a defect rectified. This can be done through repair, replacement, price reduction, or cancellation. If the seller chooses to replace instead of repair, this is possible. After the warranty period has expired, the seller has no statutory obligations towards the consumer.
Long service time?
A customer handed in a TV in mid-March. He received a rejection of the warranty claim five days later. The customer then complained about the rejection. The product was then sent from a workshop in Norway to the manufacturer's main workshop in Denmark for a more thorough check and the warranty claim was upheld there. The product was then repaired in mid-May. The customer demands cancellation of the purchase due to the long repair time. Normally, I would agree that a two-month repair time is far too long and that we should therefore agree to the customer's demand, but since the warranty claim was initially rejected by the workshop and this was 'appealed' by the customer, I believe extra time to investigate this is justified. Do you have any thoughts on whether we should accept cancellation here?
Answer: I agree with you that if the customer complains about the rejection, he must 'take the time' to wait for a more thorough investigation. I assume that the customer has been offered a loan TV in accordance with the law, which states that the customer is entitled to a loan product if assistance takes more than seven days. Assistance to the customer must take place 'within a reasonable time', which in our industry is defined as three to four weeks.
Absolute complaint deadline
We have a case where a customer is demanding a free repair in accordance with the Consumer Purchases Act for their TV set purchased approximately five years ago. The customer reported to the store and delivered the set to us on 16.05.2011, which they believe is a reasonable time after the fault was discovered. However, this is 14 days past the mentioned five years. The supplier rejects the complaint as the TV was received by us 14 days after the complaint deadline expired. Do you have any opinion on what we should do in this case?
ANSWER: A TV has a lifespan significantly longer than 2 years, so there is no doubt that this product has a five-year lifespan. Section 27 of the Consumer Purchases Act states, among other things: If there is a defect in the item, the consumer must notify the seller within a reasonable time after they discovered or should have discovered it, that they wish to invoke the defect (complaint). This deadline for complaining can never be shorter than two months from the time the consumer discovered the defect. This means that the customer must complain within a reasonable time, and at the latest within 2 months after the defect was discovered or should have been discovered. But the deadline of two or five years is final, so if the deadline has passed, it is too late.
Complaint period
What determines the complaint period for a product?
ANSWER: The complaint period is determined by the product's lifespan, which is usually set by the manufacturer/supplier. Products with a lifespan of up to two years must, according to the law, have a two-year complaint period. Products with a lifespan 'significantly longer than two years' must have a five-year complaint period. By the term 'significantly longer', we usually mean three years or more.
Complaint mobile phones
After the Supreme Court ruling, where mobile phones were given a five-year complaint period, wasn't it the case that this only applied to phones purchased after a certain date, i.e., not retroactively unlimited? We ask because we now have a customer who claims the five-year rule on a mobile bought in August 2004.
ANSWER: The Supreme Court case principally concerned how the Consumer Purchases Act should be interpreted regarding mobile phones, whether they have a two or five-year complaint right. The ruling established that a mobile phone has a lifespan of three to four years, so the industry agreed on a four-year lifespan. The Consumer Purchases Act came into force on 1 July 2002, so all mobile phones purchased after this date are protected by the law. The date of the Supreme Court ruling is therefore irrelevant.
Laptop
We sold a laptop to a customer in January 2007. In July of the same year, it was submitted for repair. The fault was covered by the supplier's warranty. The repair itself took five weeks, and the customer was offered a loan machine. She declined this due to the summer holiday and the fact that she had several machines. In November, the customer returns and has another fault with the machine. She immediately wants to cancel the purchase and not submit the machine for service. Is she entitled to do so?
ANSWER: No, the customer is not entitled to cancel the purchase after only one repair. Section 30 of the Consumer Purchases Act states, among other things: The seller is not entitled to make more than two attempts to remedy the same defect, unless there are special reasons that make further remedy reasonable. This means that you can have the machine repaired once more, even if the fault is due to the same defect. However, if the same fault occurs a third time, the customer can demand the purchase be cancelled.
The way forward
We have an ongoing dispute with one of our suppliers. This is a case about payment for goods. We are not getting anywhere, as both parties maintain their position. What options do we have, and what is the way forward?
Answer: There are two questions to be answered here. Sometimes two parties in a dispute do not agree. In your case, it is a dispute between two professional parties. Then the Conciliation Board is the next step. See further information about the Conciliation Boards below. If it is a dispute between a consumer and a professional party (for example, customer and retailer), the Consumer Council is the contact point for the consumer. In such cases, the Consumer Council should act as a neutral party, and they will write to the respondent to receive their version of the case. The Consumer Council then comes up with a proposed solution, often based on legal interpretation of the Consumer Purchases Act, as well as other relevant sources (for example, previous FTU decisions). If the parties do not accept this solution, the case can be brought before the Consumer Disputes Committee (FTU). Proceedings in the FTU are free. They issue a judgment, which is final if not appealed to the District Court within 14 days.
Sale without right of complaint
After the bankruptcy of Strax, we as a store were left with some B-goods after we had to credit some customers due to long service times. This particularly applies to laptops. Some of these were sold three-four years ago. Can we sell the old machines without warranty and right of complaint to new customers if we note this at the time of sale and write it on the receipt?
Answer: First, we must distinguish between warranty and complaint. A warranty is an additional service provided by the supplier, while a complaint is a statutory right to complain. For equipment that is three to four years old, there is unlikely to be any warranty period left. As for complaints, no goods can be sold to consumers without a complaint. The law applies to both new and used products. For goods 'sold as is', it must be informed that this is a used product, and the price should be particularly low compared to the new price, and the information provided must be realistic in relation to previous use. Remember that the product must be free of third-party rights, such as ownership or lien. In your case, there might be an opportunity to sell these with a limited complaint right, for example, three months, and that this is informed at the sale.
Waffle iron
I have encountered a situation where a consumer demands a new product (a waffle iron) after the two-year warranty has expired. The consumer claims he has a five-year complaint right on the product and that we are obliged to replace it according to the law. The consumer claims that the fault comes from the product. We have no problem replacing it, but what is the correct decision in principle.
Answer: The Consumer Purchases Act distinguishes between two and five years of warranty rights. Initially, two years is the norm. If the product is intended to last significantly longer than two years, the five-year period will apply. Is the warranty length for this product specified in any of your supplier's descriptions? Such descriptions can be user manuals, advertisements, and similar. This also applies if such information is stated in any of the retailer's documents or advertisements. When you use the word guarantee, it should be an additional service that the consumer should have in addition to the warranty right. It is therefore prohibited to use the word 'guarantee' if no additional service can be provided. A waffle iron falls under the term 'small electrical', where it has been the practice for two years of warranty rights unless otherwise stated.
When does the warranty period start?
One of our TV suppliers has refused a warranty claim on the grounds that the TV set is over five years old from the production date. We believe that it is the sales date to the end customer that applies. This set is not a volume model and has been in our warehouse for a period. What is correct?
Answer: The warranty period should be calculated from the sales date to the consumer and not the production date. If a reduction is to be calculated due to storage time in the warranty period to the store, this should be calculated from the invoice date from the supplier to the store. An industry standard is practiced, stating that this should only apply if the product has a longer storage time in the store than six months from the invoice date. The consumer has their right to the warranty period according to the Consumer Purchases Act. If the store has had the product for more than six months in stock, it must answer for the warranty to the consumer in the event of a legal defect during the reduction period. How long the supplier/distributor has the product in their warehouse is irrelevant.
Exchange and cancellation
We have a customer who bought a printer from us. He has had many problems with it. Every time the printer has been broken, the supplier has made an exchange. The customer has now had three different printers, and the last one is also not working. The customer no longer wants a printer from this supplier. What I am wondering is whether the supplier can make exchanges indefinitely against the customer's will?
ANSWER: The Consumer Purchases Act states that there are two repair attempts for the same fault. If a fault occurs for the third time, there is a basis for cancelling the purchase. In your case, there will be grounds for cancellation.
Interest calculation
A customer has had the purchase of a desktop PC cancelled. According to the law, we have deducted for the utility value he has had from the product. Since we are using this option, the customer is entitled to interest from the date of sale. The question is what we should use as the basis for calculating the interest. Is it the sale price or the amount we get after the 'deduction for utility value' is taken out?
ANSWER: Here the answer is simple and straightforward: arrears interest should be calculated from the time of sale and on the entire sale price. Here is a link that you can use as an aid in calculating arrears interest: http://www.jussys.no/index.php?s=morarente&sp=no&m=online
Exchange vs. repair
One of our customers has a complaint case regarding a plasma TV. We wish to repair the screen, while the customer claims he can choose between exchange or repair, and he wants an exchange. Can he demand this?
ANSWER: The Consumer Purchases Act states that the customer can demand an exchange if this does not result in a significant additional cost for the seller. The question of what constitutes a 'significant additional cost' here is difficult to determine. However, this question has been tested in the courts in the so-called 'shoe case'. This case went all the way to the Supreme Court, where the seller's side prevailed. The Supreme Court states in the ruling that a significant additional cost is considered to be more than one-third of the price (purchase price). This means that if a product costs, for example, NOK 10,000 in purchase price and a repair can be carried out for less than NOK 3,333, the seller can choose repair. In plain terms, this means that expensive products are usually repaired. This is also good environmental policy, as it avoids unnecessary 'scrapping'.
CONSUMER DISPUTE DECISIONS RELATED TO CANCELLATION
Cancellation settlement for subsidised products
We sell a number of products that are subsidised by content providers. This is particularly common for mobile phones and from CanalDigital, Viasat, and RiksTV on digital TV. Customers sometimes have the right to cancel the purchase, and the Consumer Purchases Act states that they should then have the purchase price refunded. The question then becomes whether this amount is what the customer paid (including subscription) or what the product costs unsubsidised?
Answer: This is a complicated question. To ensure the quality of the answer, we have forwarded the issue to the industry's lawyer. Below is the lawyer's consideration, related to the legislation and the relevant FTU decisions in this area:
Main rule
The main rule in rescission settlements where the purchase is wholly or partially fulfilled is that the consumer should have the purchase price returned, and the seller should have the item returned, cf. the Consumer Purchases Act (fkjl.) § 49 second paragraph. In cases where the purchase price is subsidised by other actors (e.g. mobile operators), the consumer will also have entered into a binding agreement with the actor, usually through a subscription agreement with a binding period. The question is then what effect the rescission of the purchase agreement (with the seller) has on the other agreements. The general starting point is that the rescission of the purchase agreement does not affect other agreements, so that these agreements remain as before. However, this starting point must withstand some exceptions. The most practical exception is that the consumer, under certain conditions, will have the right to compensation from the seller, cf. fkjl. § 33 and § 52. In the commentary edition of the Consumer Purchases Act, it states:
Consumer protection
The consumer's foremost protection lies in the fact that he, under the circumstances, can claim compensation from the seller if agreements entered into with a certain connection to the purchase agreement cannot be utilised as expected. This applies, for example, if the value of a mobile phone subscription agreement is reduced as a result of the purchase of a mobile phone being rescinded (see FTU 2004/372), or an agreement on PC support is wasted as a result of the purchase of the PC being rescinded. The same must apply if the consumer has taken out a loan to purchase an item, and costs associated with the loan are wasted. However, the relevant agreements do not automatically lapse as a result of the purchase being rescinded.
Consumer council's orientation
In 2005, the consumer council issued an internal orientation regarding the question, and the summary was as follows: Termination settlement for goods with associated subscription occurs by the consumer being refunded the purchase price in exchange for returning the item. In addition, they receive compensation calculated based on the price difference between the purchase price and the price of the unsubsidised item at the time of termination. According to the consumer council's opinion, it would be most appropriate in the compensation settlement to base it on compensation for cover purchases. However, the buyer's duty to mitigate losses implies that they must choose the most reasonable solution if several solutions would yield the same result, cf. fkjl. § 54. Review of relevant decisions from the consumer disputes committee (FTU). We have not found case law from the courts regarding the question, but there are several decisions from the FTU. The legal value of such decisions will naturally be less than with ordinary case law. Additionally, the decisions are not entirely unambiguous.
We choose here to provide a brief summary of relevant decisions:
FTU2007-59
The buyer had purchased a mobile phone from the seller for NOK 599, with a subscription with a 12-month binding period, where fixed expenses were NOK 119 per month in addition to a registration fee of NOK 199. The purchase was terminated, and the buyer demanded the purchase price of NOK 599 in the termination settlement, as well as compensation because she could not use the phone during the remaining binding period, while she still had to pay the fixed expenses. The compensation claim was NOK 1428, calculated as NOK 119 for 12 months. FTU determined that the buyer had the right to terminate according to fkjl. § 32 and § 49, and so that the termination settlement corresponded to the purchase price of NOK 599. FTU further awarded compensation for the loss the buyer suffered because the subscription due to the binding period continued to incur fixed expenses even after the phone could no longer be used, cf. fkjl. § 33 and § 52. However, the buyer did not fully succeed in her compensation claim, as FTU assumed that there were only 6 months left of the binding period. The compensation was calculated as follows: NOK 119 x 6 months = NOK 714. The buyer was awarded a total of NOK 1,313 (NOK 599 + NOK 714).
FTU2006-207
Purchase of a mobile phone for NOK 2,492. The phone was subsidised on the condition that the buyer agreed to commit to Telenor for a period. As a rescission settlement, the parties agreed on the purchase price of NOK 2,492. FTU awarded the buyer an additional compensation of NOK 900, which the buyer had to pay to terminate the binding period with Telenor, cf. fkjl. § 33 and § 52. FTU stated that “When the complainant has to acquire a new phone, the cost of terminating the binding will be a loss due to the defect.” The buyer also received compensation of NOK 250 for storing information that was lost in connection with a repair. In total, the buyer was awarded NOK 3,642 (NOK 2,492 + NOK 900 + NOK 250), plus interest.
FTU2004-605
Purchase of a mobile phone for NOK 156. As part of the agreement, the complainant committed to a subscription of NOK 99 per month for 12 months. The buyer was granted the rescission claim, and in the rescission settlement, he was awarded the purchase price of NOK 156 plus NOK 198, which was the subscription fee for the two months the buyer had paid this (NOK 99 x 2 months). The total rescission settlement was NOK 350. In addition, the seller was obliged to cover claims from Sense (the mobile operator) for the subscription fee during the remaining binding period.
FTU2004-478
The buyer paid NOK 856 in cash to the seller for a mobile phone, with an agreement of an 18-month binding period to a Sense private subscription. The subscription cost NOK 99 per month, of which NOK 50 was for the repayment of the phone. At the end of the binding period, the monthly fee was to be reduced to NOK 49. The buyer was upheld in the claim for cancellation. FTU concluded that this was a credit purchase under the Credit Purchase Act § 3 no. 1 letter b, because the monthly amount of NOK 50 was in addition to a regular subscription fee of NOK 49 per month. The seller had to repay the buyer both the cash amount and the credit expenses. The buyer was therefore awarded the purchase price of NOK 856, as well as NOK 900 for the repayment of the phone (NOK 50 x 18 months). The buyer was awarded a total of NOK 1,756, with the addition of interest.
FTU2004-372
The buyer paid NOK 994 for a mobile phone. Without a subscription binding, the price would have been NOK 2,358. In the cancellation settlement, the buyer was awarded the purchase price of NOK 994. He was also awarded compensation of NOK 1,364, which constituted the difference between the regular purchase price of NOK 2,358 and the purchase price of NOK 994. The amount of NOK 1,364 represented the value of the subscription, which he was unable to use. FTU stated that this was a loss the buyer could claim compensation for. In addition, the buyer received compensation of NOK 450 due to repair costs. However, the buyer was not upheld in his claim for compensation for his own work with the complaint. The buyer was awarded a total of NOK 2,808 (NOK 994 + NOK 1,364 + NOK 450).
FTU2004-151
The buyer was awarded the purchase price in the rescission settlement. FTU stated that the buyer would normally also be entitled to compensation for the price difference when purchasing a similar item, but in this case, such a loss was not documented.
Summary and conclusion: The legal starting point is that the consumer in the rescission settlement should have back the purchase price he himself paid for the product. In addition, the consumer will normally be entitled to compensation for the financial loss he has incurred as a result of the defect, based on the price difference when purchasing a similar product, or the cost of terminating the binding period.
COMPENSATION
Consequential damage
We have sold some water-based cooling systems for PCs. In some cases, there has been leakage due to a defect in this product, and nearby components have been damaged by water. The customers have installed the cooling system themselves. Do we have to cover the nearby components, or is it sufficient to only replace the cooling system?
ANSWER: A consumer is entitled to have the defect rectified free of charge. In addition, she is entitled to compensation for financial losses that are a direct result of the defect. An example could be that a washing machine has a defect and does not drain water. A wool sweater that then lies in the machine for a couple of days before a technician arrives can be claimed for compensation, as the damaged sweater is a direct result of the machine not draining water. In your case, it is similar. The neighbouring components would not have broken if the cooling system had been sealed.
Scratches on refrigerator
On a refrigerator we sold to a customer, it turned out there were some small scratches on one side. The customer wants a new fridge, but we think it is a bit excessive for some scratches. When the customer places the refrigerator, the scratches will not be visible. We have offered a price reduction but are unsure how large this should be?
ANSWER: A new refrigerator should be flawless. This applies to both functions and appearance. It is a defect when a new appliance is delivered with scratches. For the customer to demand cancellation, the defect must be significant. This means the scratches must be easily visible and highly disfiguring. If the scratches are of a less significant nature, which seems to be the case here, there will be grounds for a price reduction. Regarding the size of the price reduction, it should reflect the depreciation the damage has caused to the product.
Compensation for spoiled food
We delivered a fridge-freezer to a customer. Shortly after, the motor stopped working. This happened during the Christmas holidays, and the customer was away, so the damage was not discovered. There is no doubt that the fault falls under a defect in the Consumer Purchases Act. But the customer demands compensation for all the food in the freezer and refrigerator. Is he entitled to this?
Answer: It is not often this happens, but it does occur. The customer is entitled to have the defect rectified free of charge. Most products, however, have either optical and/or acoustic temperature alarms. This gives the customer reasonable time to take care of the food before it spoils/gets ruined (30-36 hours). If the fridge has been left unattended for so long that the food inside is spoiled, the loss must potentially be covered by the customer's home insurance.
Liability for compensation
A customer has 'encased' a home cinema system in the wall, meaning there is panelling outside all the speakers. Now the system needs to be replaced under warranty, and the customer is claiming compensation for the additional expenses he has for a carpenter.
Answer: The customer is entitled to assistance at no cost. He is also entitled to compensation for 'the losses he has incurred as a result of the defect'. But in this case, he is not entitled to compensation for the carpenter. I assume that this home cinema system is not a 'built-in system'. The seller is not responsible for the customer's choice to build this into the wall.
Damage to furnishings during service
If a service technician damages furnishings, for example, kitchen fittings, during a home visit to repair a product, who is responsible? We have an example where there was water damage, and a parquet floor had to be replaced. Is this regulated by law?
Answer: The answer to this can be found in the Act on Craft Services. I have included the sections that cover compensation:
§ 28. Liability for compensation for delay and defect.(1) The consumer can claim compensation for loss resulting from delay or defect. However, this does not apply to the extent that it is demonstrated that the loss is due to an obstacle beyond the service provider's control, and which the service provider could not reasonably have been expected to take into account at the time of the agreement or to avoid or overcome the consequences of.
(2) If the loss is due to a third party that the service provider uses to perform the service, the service provider is only free from liability if the third party would also have been exempt under the rule in (1).
(3) For damage to anything other than the item or property part the service concerns or to anything other than something that has a close and direct connection with what the item or property part is intended to be used for, the consumer can claim compensation unless the service provider demonstrates that the loss is not due to error or negligence on the part of the service provider.
§ 29. Other liability for compensation.(1) The rules in § 28 apply correspondingly if an item or property is damaged while it was in the service provider's custody or otherwise under the service provider's control.
(2) For other losses in connection with the service assignment that are not a result of delay or defect, the service provider is liable when the loss is due to an error or negligence on the part of the service provider.
§ 30. Scope of liability.(1) The compensation shall correspond to the financial loss the consumer has suffered (expenses, price difference, lost earnings, property damage, etc.). However, this only applies to losses that could reasonably have been foreseen as a possible consequence of the situation.
(2) If the consumer fails to limit the loss through reasonable measures, the consumer must bear the corresponding part of the loss themselves.
(3) The liability can be reduced if it would be unreasonable for the service provider based on the size of the loss in relation to the loss that usually occurs in similar cases, and based on other circumstances.
(4) The compensation rules in this chapter do not apply to losses in business operations.
Based on these rules, we interpret it as the service technician and the one he represents who are responsible.
MISCELLANEOUS QUESTIONS FROM SHOP AND WORKSHOP
Arbitration
We have received a contract proposal stating that any disputes shall be resolved by arbitration. What does this entail?
Answer: Arbitration is an agreement to use a private court to resolve a current or future dispute, as opposed to using public courts. The arbitration award then regulates how the dispute should be handled. One of the advantages is that the parties have greater control over the process itself than in a public trial. The parties themselves choose the judge or several judges in larger cases. Often, cases through arbitration can also be kept away from the mass media. Arbitration is widely used in business, and often between parties of different nationalities. They often cannot agree on which country's laws should be the basis for a trial. An arbitration award is binding and cannot be appealed. Since the parties themselves choose the judge/judges, there is a question of who can become such a judge? Often the agreement does not specify this, so any impartial and independent person can be chosen. However, the Arbitration Act states that one must be qualified for the position. So, it is common to appoint law professors, judges, or lawyers. It also happens that one or more judges who are not lawyers are appointed, but who have a technical or other background suitable for the case. Remember that an arbitration award is as binding as an ordinary judgment. This is regulated in the Arbitration Act.
Electronic advertising - SPAM
Is it legal to send advertising (spam) via email or SMS, without asking me as the recipient in advance?
ANSWER: No, it is prohibited to send marketing via email, SMS/MMS, fax, and similar to physical persons, without prior consent from the recipient. If you have a customer relationship with a company, they can send you advertising for similar products to those you have purchased if they have informed you that they wish to do so, and you have the opportunity to decline receiving advertising.
Invoice shark
We have received an invoice from a company we have no customer relationship with. They claim that we have ordered a service. Do we have to pay this?
ANSWER: You do not have to pay for a service you have not received. You must send a written complaint to the company, stating that you have neither ordered nor received the service. It is the company that must document that they have an agreement with you, and if they cannot, they have no legal basis to collect the money. It is also not legal to send a disputed claim to debt collection, so if they threaten with debt collection, you have protection under the debt collection law.
Advance payment
A customer wants to order a product for 'special interest'. We do not stock this, but it can be ordered. Can I require advance payment from the customer before I order? I do not want to be left with this if the customer changes their mind.
ANSWER: You can legally agree on full or partial advance payment with the customer. The disadvantage for the customer is that the financial risk then transfers to them, which is what you want in this case. Regarding a customer's right to cancel a product, they can do so until the product is delivered. For distance selling, the right of withdrawal also applies.
More expensive than agreed
We have provided a price estimate for an installation job, but the job was larger than we thought, and the bill was higher than agreed. Can the customer refuse to pay more than what is stated in the price estimate?
ANSWER: This is regulated by the Craftsman Services Act. If a price estimate is given, the price cannot exceed the estimate by more than 15%. If you have made too low an estimate, you must bear the cost yourself.
Can we require work lighting?
A customer had ordered service on an induction cooker. When we arrived, it turned out there was no light in the room where the cooker was placed. The customer had not installed lighting in that room. It was quite dark, and at this time of year, it is the dark season here in the north. The fault was a defect covered by warranty. Can we require that the cooker be repaired at our workshop, and that the customer pays for transport due to the lack of work lighting?
Answer: The consumer is entitled to have the defect covered at no cost. If you want to take the cooker to your workshop, you can do so, but you cannot charge the customer for the transport. The problem with lighting can be solved in other ways, for example by using a work lamp with a cord from another room, or by moving the cooker to another room. I assume the customer has electricity in the house, otherwise it is difficult to use an induction cooker.
Inspection fee
We sent a customer's PC to the workshop to have a defect repaired. It has now come back, along with an invoice for an inspection fee of NOK 500, and 'no fault found'. The customer does not want to pay this fee because she was not informed about it in advance. Can she refuse this?
Answer: If an inspection fee is to be charged, this must be agreed upon in advance. If the fault turns out to be a defect and is covered by warranty, the customer should not pay the fee. But if it is not a warranty case, the workshop should be paid for the work they have done. In this case, it seems the customer had an expectation that this was a warranty case and at the same time had not received information about the inspection fee. Therefore, she can refuse to pay.
Long service time with supplier
We have sent a TV to the supplier for service. It has now been gone for eight weeks, and is still not finished for 'a good while'. The supplier is missing a part. The customer is now complaining and wants a new device or their money back. Are they entitled to this?
ANSWER: Eight weeks is too long. The law states that remedy should occur within a reasonable time. The Consumer Disputes Committee has defined 'reasonable time' to be approximately 30 days in our industry. This of course assumes that the customer has been offered a loan product. In this case, the customer may have a claim for exchange.
Transport damage and the customer's duty to inspect
We sell a number of white goods and find that many customers delay unpacking them. There can be several reasons for this, but we see two main reasons: 1. The customer buys on sale because the kitchen is to be renovated 'soon'. 2. The customer's new kitchen is delayed, and then the white goods remain standing. When they are unpacked, there are in a few cases hidden transport damages, i.e., the product has a damage, while the packaging is intact. Often it can take five to six months before this is discovered. What rights does the customer have then? A customer must report a defect no later than two months after it is discovered, or should have been discovered.
Answer: There are many uncertainties here, including who was responsible for the transport (when the customer assumed risk and responsibility), and how the products have been stored. If the goods, for example, have been on a construction site, they are more exposed to external influences than in a private garage. But we assume that the damage occurred during transport before the customer assumed the risk. We have asked trainee lawyer Peter Hallsteinsen at Kluge DA to look more closely at this issue. Here is his answer:
After investigating the matter, we have concluded that the six-month deadline after delivery forms the basis for a guideline. Below, I will explain the reasoning for our position. The seller writes in their question that the buyer must report any defects within two months after they discovered or should have discovered the defect, which is entirely correct. The question is at what point the buyer 'should' have discovered a potential defect. It is only at this point that the two-month deadline begins to run. Here, an assessment must be made of what requirements can be placed on the buyer's examination of the item, both before and after purchase. The Sale of Goods Act § 31 contains rules on the buyer's duty to examine after delivery. However, the Consumer Purchases Act has no equivalent rule. In the commentary on the Consumer Purchases Act, written by Professor Kai Krüger, the following is stated: 'On the other hand, one cannot impose on the buyer to unpack goods purchased for later use, for example, packaged garden furniture bought at a reduced price in the autumn for use in the next season.' Although legal theory will not always be decisive for the solution of legal questions, I believe the statement above should be used as a starting point. The rule in the Consumer Purchases Act § 18 second paragraph does not preclude complaints made later than six months after delivery. But this assumes that the buyer can prove that the defect existed at the time of delivery.
Validity of gift cards
We sell gift cards in our shop. Some customers save these until the sales start, so they get more for their money. Can I set a restriction that gift cards cannot be used on sale items?
ANSWER: Yes, in principle, you can. Such a restriction must, to be valid, be agreed upon at the time of purchase of the gift card. Unless otherwise agreed, the gift card is valid for three years.
Denial of order
We have received an order for a capital item by phone and sent it to the customer, along with an invoice. Now he denies having ordered it and refuses to pay for the item. What can I do?
ANSWER: This is a typical "claim versus claim" case. There is a purchase agreement between you as the seller and the customer, but it is you as the seller who must document that such an agreement exists. This can be difficult if the agreement was made over the phone. You also cannot simply send the invoice to debt collection, as it is not legal according to the debt collection law to send a disputed claim to debt collection. You have the option to bring the case to the Conciliation Board, but once again, it is you who has the burden of proof. Another solution is to "throw in the towel", take the item back, and credit the invoice.
Advance payment
A customer has ordered a relatively expensive item from us, which we do not stock. If I am worried that the sale might fall through, can I demand advance payment?
ANSWER: Yes, it is fully permissible to agree on full or partial advance payment, but this must be agreed upon in advance. The customer will then bear all the risk (which is what you want). The question is whether the customer is willing to do this.
Alarm on stove
We have sold a stove to an elderly couple. They complain that they cannot hear the alarm clock and want to cancel the purchase. I have checked the stove, and the sound level is normal. It is more likely that the customer's hearing is starting to fail. Do they have the right to cancel the purchase?
ANSWER: Since this purchase was made in-store, there is no right of withdrawal. If there is nothing wrong with the alarm clock, there is no defect in the product, and the "table will catch". The exception is if the customer requested a stove with a strong alarm at the time of purchase, and the one sold does not meet the customer's expectations for the product.
Lower prices online than in own store?
One of our competitors has their own online store. Can this business have a lower price online for an item compared to the price for the same item in the store?
Answer: If the price in the online store differs from the prices in the physical store, it must be clearly stated in the online store that these prices only apply to the online store.
Same product at different prices
We own two stores, one is based in a shopping centre with high rent, the other is in a 'standalone building' with lower rent and not as attractive a location. Therefore, we have slightly higher prices in the shopping centre. Often customers come there and demand to buy at the lower price. Are they entitled to this?
Answer: Each individual store can set its own prices. This is due to competitive considerations. The customer is not entitled to buy at anything other than the listed price, but of course has the right to haggle or ask for a discount. Whether they get a lower price is up to the store. The customer's choice is whether to buy or not. It is important to emphasise that if the customer has already purchased an item, they usually cannot demand a refund of the difference between the two prices. This assumes that the store does not have a price guarantee, as we know from several players in our industry.
Transferring information from an old mobile phone
We have a customer who at the end of October approached us wishing to replace her old mobile phone with a newer equivalent. The customer bought a model of the same brand as the old one. She wanted assistance to transfer the phonebook and photos, which we also did for her. However, she wants everything on the old phone to be transferred to the new one, something we have always pointed out may not be possible - including old SMS and MMS. We have spent a lot of time, but the customer is still frustrated - the new phone will not cooperate with the old one. There are no faults or defects with the new phone. Based on the fact that the customer cannot transfer all data, she wants to cancel the purchase. It is now over six months since she received the phone. Is she entitled to cancel?
Answer: For the customer to have a claim for a complaint, there must be a defect in the product. If the defect is significant, this may provide grounds for cancellation, for example, if replacement/repair is not possible. But in this case, there is no fault with the mobile phone, and the customer therefore does not have the right to cancel. You have also provided information that there was a possibility that old SMS and MMS could not be transferred. However, if you had promised that this would work, you would have given the customer an expectation, and it could possibly have influenced her choice at the time of purchase. In your case, she was correctly informed, and she therefore has no 'claim' against you as the seller.
Direct delivery to workshop
Customers often come to us with white goods (vacuum cleaner and other small electrical items) that can be delivered to a workshop five minutes away from us. Can we refuse to accept the product and ask the customer to go directly to the workshop?
Answer: You cannot refuse to accept these products. I assume you have sold the product, and that this is a complaint in accordance with the Consumer Purchases Act. The customer is then entitled to assistance from the seller, and you must provide this. It is not the customer's fault that you have chosen a workshop in a different location than the point of sale.
What is the Conciliation Board?
We have been summoned to the Conciliation Board and are wondering what this is?
ANSWER: All municipalities have a Conciliation Board. It consists of three elected lay judges and three deputy members. All are elected by the municipal council for four years at a time. The purpose of the Conciliation Board is to relieve the rest of the judicial system. If the Conciliation Board finds a case too difficult or extensive, it is referred to the District Court. However, all practice indicates that few cases are appealed or proceed further in the judicial system. The Conciliation Boards are the very first instance of the courts (the Consumer Disputes Committee is also one, but only handles consumer cases). It is both a mediation body and a court. Only civil cases can be handled in the conciliation boards, not criminal cases. Most cases that end up in the Conciliation Boards concern financial transactions and disputes about debts, often in connection with the sale of goods and services.
A debt claim can be brought before the Conciliation Board to achieve an amicable solution or to have it determined by judgment that the claim is legally valid. A legally valid claim can be enforced by the bailiff. A conciliation complaint should be in writing, and there are ready-made forms for such use. The respondent receives a copy of the complaint and the opportunity to respond. And if the respondent does not respond, the Conciliation Board will issue a default judgment in accordance with the complainant's claim. Then the parties are summoned to mediation. If the respondent does not appear, a default judgment will often be issued. In the Conciliation Board, there is a more informal pattern than in a traditional courtroom. You also do not need a lawyer. The goal is to reach a settlement between the parties. Conciliation mediation is exempt from public disclosure, and a settlement has the same effect as a final judgment.
In cases where a settlement is not reached, it will end with court proceedings. In this phase, it is allowed to have a legal representative. The Conciliation Board can then conclude the case by delivering a judgment. The judgment must be based on Norwegian laws and applicable rights. Just like a decision in the Consumer Disputes Committee, a judgment in the Conciliation Board is final, unless it is appealed within four weeks. The appeal must then be directed to the District Court. One of the advantages of the Conciliation Board is that it is not expensive. If you wish to have a case processed, you must pay a court fee in advance. A court fee is currently NOK 860. In addition, the party who loses the case is usually ordered to pay the legal costs.
Frost-damaged coffee maker
A customer bought an expensive coffee maker for use at the cabin. When the customer purchased it, we did not inform them that they needed to empty all the water before winter and the cold came. It now turns out that the coffee maker is damaged because the water left in the machine/pipes has frozen and thus damaged the machine. The customer believes we should have informed her about this, which we doubt. Do we have any duty to inform here?
ANSWER: You have no duty to inform at all. The Consumer Purchases Act covers product defects (manufacturing faults). This is a 'user error', and the fact that water expands when it freezes should be known to most people.
Beer and fridge
A customer bought a fridge from us. This fridge has a beer tap in the door (similar models have water). The problem is that Norgesgruppen has now stopped selling these special beer kegs under the pretext of low sales. It is possible to order such beer kegs from Vinmonopolet, but with a long delivery time. The customer now wants to cancel the purchase of the fridge and then buy another fridge without a tap system. Is he entitled to cancel the purchase?
ANSWER: The Consumer Purchases Act states that the seller is responsible for direct defects in the product, and the consumer is therefore entitled to have the defect rectified at no cost. In your case, there is no defect in the product itself, the problem lies in the availability of an ingredient (in this case beer) becoming less. As we see it, this is an external factor, and the seller cannot be held responsible for this.
What is reasonable time?
Both the Consumer Purchases Act and the Sales Act refer to the term 'reasonable time'. When we receive items for service, which will take more than seven days to repair, the customer is offered a loan product (ref. 'seven-day rule'). We are located in Northern Norway, and some products have to be sent away for service. Sometimes the actual repair can take two to three weeks, maybe longer, and some customers react to this. Can you tell me: how long is 'reasonable time'?
Answer: We in the industry organisation have previously pointed out that a period of 3-4 weeks is considered as "reasonable time". However, this assumes that a loan product is made available to the consumer. This is not the first time this question has been asked, usually in connection with servicing a laptop. We also took the question to the Consumer Council's legal trainee Thomas Nortvedt. Here is his answer:
The wording of the law only refers to reasonable time, and the preparatory works do not provide any clear guidelines. The department lists a number of factors that should be considered, none of which are decisive when it comes to a laptop. Furthermore, the choice of the term "reasonable time" is intended to differentiate between different products and different defects. I therefore felt I needed to find something more than just a claim of 3-4 weeks before I wrote to you. The Consumer Disputes Committee (FTU) decides a number of cases concerning consumer electronics each year. There has not been a similar case, but in case FTU-2006-831, the FTU says this about the waiting time for the delivery of a new charger: "The committee has, with some doubt, concluded that there is no basis for cancelling the purchase. A waiting time of four weeks for the delivery of a new charger for a camera is at the outer limit of what is acceptable, but in itself probably does not exceed "reasonable time" in the Consumer Purchases Act § 30 first paragraph." This concerns a different item and cannot be directly transferred. But as the Consumer Council sees it, this is an indirect support that 3-4 weeks is on the borderline of what can "in principle" be considered reasonable time.
Supreme court ruling on the expected lifespan of mobile phones
Does this ruling apply to all portable products or just mobile phones?Answer: The supreme court gives no indication that this applies to all portable products. This case concerned mobile phones. The mobile phone guidelines were heavily relied upon in this case, and they do not cover other products. There are no such 'rules' for all other types of portable products. The answer is that the ruling applies to mobile phones.
Lifespan of products
We have a customer who bought a shaver that cost over 2,000 kroner. He demands a five-year warranty, arguing that a product at that price should be expected to last longer than two years. According to the Warranty Guide published by the Electronics Industry in 2015, it states two years for small electrical products. Can you help me?
Answer: Shavers fall under the two-year rule, unless the manufacturer or supplier has provided a commitment to a longer warranty period. For products that contain wear parts, it is generally difficult to specifically comment on whether the warranty applies without knowing the cause. Why has the product stopped functioning satisfactorily?
PURCHASES ABROAD
Purchases abroad
I have a question regarding complaints about phones purchased outside the Nordics: Is there anything in the consumer purchase act that says we must accept such a complaint, or can we simply refer to the fact that the complaint must be made in the country where the phone was purchased?
ANSWER: You must complain in the country where the product was purchased, and it is the regulations of that country that apply. The consumer purchase act applies in Norway, for products purchased in Norway. If the product is purchased outside Norway, it is the same whether it is purchased in the Nordics or not.
Other countries' right to complain
How is the right to complain in our neighbouring countries?
ANSWER: The main rule is that if you buy a product in another country, that country's laws apply. The EU is currently working on a common consumer directive so that there will be uniform rules in the EU. This has not yet been implemented and is not yet clear.
England: You have 6 years to complain about defective goods. This applies in England, Wales, and Northern Ireland.
Scotland: Here, there is a five-year right to complain.
Netherlands: No limitation on the right to complain. The right is linked to the expected lifespan of the product. An expensive washing machine, for example, is expected to last more than 10 years.
Belgium: The right to complain is not specified, but it should be done within a reasonable time.
Spain: Three-year complaint period
Iceland: Two years, five years for items with significantly longer lifespan.
Norway: Two years, five years for items intended to last significantly longer. Sweden: Three-year right to complain.
Finland: The complaint period is not specified. Practice shows it can be up to 10 years.
Foreign products?
What about products purchased outside the Nordic countries? Is there anything in the Consumer Purchases Act that says we must accept such a complaint or can we just refer to the complaint being made in the country where the product was purchased?
ANSWER: You must complain in the country where the product was purchased. And then the regulations in that country apply. The Consumer Purchases Act applies in Norway, for products purchased in Norway.
BUSINESS PURCHASES
Business purchases vs. consumer purchases
We receive several service cases on white goods where public institutions / companies are listed as the recipient on the invoice, but with a delivery address to private individuals. We have considered that this must be characterised as a business purchase.
Answer: I would characterise this as a commercial purchase, and the Sale of Goods Act applies. But there can be exceptions. An example might be where a developer buys white goods and installs them in a property, then sells this property (with white goods) to a consumer. This consumer would then have a five-year right to claim under warranty for the white goods, but there would also likely be a purchase contract documenting the purchase. If a company buys a product, which it then rents out to a consumer, the Sale of Goods Act will apply.
Commercial purchase vs. consumer purchase
We have sold a TV to a company, and the company name appears on the invoice. Now the TV is four years old and in for service. The customer demands a five-year warranty, since the company is a 'personal company', and therefore the Consumer Purchases Act applies. We believe this is a commercial purchase, and thus regulated by the Sale of Goods Act with a two-year warranty. What is correct?
Answer: A sole proprietorship is a company form on par with a limited company, and this is therefore a commercial purchase. The Sale of Goods Act applies, and it states a two-year warranty unless otherwise agreed.
Commercial purchase and warranty
We have a business customer who has bought a refrigerator from us, the motor is defective after seven months. The supplier says there is no warranty for business customers! What is correct according to Norwegian law? Is the customer entitled to have the refrigerator repaired or replaced? It is a refrigerator in the lower price range.
Answer: The supplier is wrong. There is also a right to claim under warranty for business purchases. This is regulated by the Sales Act (buying and selling between two equal parties). The Sales Act states: The warranty period is what is agreed between the parties. If nothing is agreed, two years apply. Here you must look at your sales terms towards your customer. The rules are the same regardless of which price group the product is in.
Privacy
Can the trade register personal details of the customer?
The Data Inspectorate has now decided that consent must be obtained from the customer before personal data is registered in the customer register, and that procedures must be developed to ensure that consent is obtained.
Background
The industry's stores usually register the name and address of customers on goods over a certain value. Sellers are required to obtain this when it comes to licensed products, which must be reported to the NRK License Office. This is authorized in the television regulations. But the practice has been that this is done for all product groups. The background is that the order/receipt can easily be searched in the data system, for example in the event of a complaint.
A customer has complained about this to the Data Inspectorate, which has looked into the matter.
Privacy
According to section 8 of the Personal Data Act, a legal basis is required for all processing of personal data. Such a legal basis is consent from the person to be registered. Consent is defined as a voluntary, explicit, and informed declaration by the data subject that he or she accepts information about themselves (Personal Data Act § 2 no. 7). Information and consent must be obtained before registration takes place. Furthermore, section 28 of the Personal Data Act states that the information must not be stored longer than necessary for the purpose. As we see it, this means a maximum storage period of five years, as no products have a longer complaint period than five years.
Documentation of the purchase
A consumer has, according to the Consumer Purchases Act, a complaint period of two or five years depending on the product. When a customer complains about the item to the seller, the purchase must be documented. The most common is a purchase receipt, but other documentation is also accepted (an example of this can be a bank statement). It often happens that customers do not have the necessary documentation, but the retailer can then look up the sales receipt, and the customer thus receives the rights they are entitled to according to the Consumer Purchases Act. The retailer is not required to do this but does so as part of customer service.
What needs to be done
It is voluntary to provide your name and address for the purchase of non-licensable goods. The customer must then give their consent before registration is carried out. A verbal confirmation from the customer is sufficient. It is the seller's responsibility to ensure that there are good routines for obtaining consent, and that the stored information is handled securely. A step in complying with the information obligation can be a poster at the point of sale. This information must explain why personal data is being registered, and that it is voluntary.
- It is important for a customer to know what they are consenting to before registration takes place, says advisor Mari Hersoug Nedberg at the Data Protection Authority.
- The seller must also ensure that the information is not stored longer than necessary, she concludes.
Consequence for the consumer of not giving consent
Customers who do not wish to give this consent will then receive a receipt without a name and address. For these customers, it will be especially important to keep the purchase documentation. Registration in the seller's customer database is an offer to store purchase information, which for many customers will appear positive and unproblematic. If an unregistered customer wants to complain about a product, they MUST be able to document the purchase. If the customer cannot do this, they risk having their complaint rejected.
Various questions from workshop
Used too much?
We received a flat screen for service. The product is three years old. This device has been 'on' for an average of 11 hours a day the entire time the customer has had it. Can we reject the complaint because the screen has been used too much? The average is around two to three hours.
Answer: The answer here is no. It is not forbidden to watch TV all day. If you had at the time of sale made reservations that this model had usage limitations and the customer was informed of this in advance, it would have been different. Such information would likely have influenced the customer's choice of model. It is also not common to set such limitations on TV sets today.
Legal regulation of inspection fee
Repairs are often submitted where there is nothing wrong, or it is user error. We have therefore charged an inspection fee for a long time. This is deducted if it is a complaint or a real fault. You have previously said that we are allowed to do this, as long as the customer is informed in advance. But where is this described in the legislation? Cannot find this in the Consumer Purchase Act.
Answer: This is regulated in the 'Act on Craft Services etc. for Consumers', specifically in §34. It states as follows: If a preliminary examination or similar work is to be carried out to determine whether a service should be ordered, the consumer shall only pay for the preliminary work if it has been informed or reserved in advance. This law came in 1990, while the Consumer Purchases Act came in 2002, so they have nothing to do with each other, other than that they will 'work' in accordance with each other.
Do we have to install?
We have sold a number of heat pumps. These are installed at customers' homes. The problem is that the supplier is now bankrupt, and some of these heat pumps need to be replaced. How do we deal with this in front of the customer? We want to offer the customer an exchange, but do we also have to install it for him?
Answer: It is the seller who is responsible for ensuring that a consumer has a defect in the product rectified. The consumer is also entitled to have the defect rectified free of charge. If you have sold this heat pump ready installed, you must also install the new one. If the customer bought it over the counter and installed it themselves, this is not your responsibility.
Lack of parts
We have sold a TV that has now broken down. The device was sold two years ago. It is not possible to obtain the relevant part, and we are therefore unable to carry out the repair. We have offered the customer a new device, but he wants to cancel the purchase. Can the customer demand this?
Answer: The law states that if the defect is significant, the customer can choose between cancelling the purchase or getting a replacement. Since you are unable to repair the device (even though the reason is a missing part), this is a significant defect. So here the customer can choose. Be aware that the customer cannot first choose a replacement, then change their mind and demand cancellation. Here, the 'table catches'.
Right to withhold product 1
Do we as a retailer have the right to withhold a product for a customer? This concerns a defect repair. The product has a five-year warranty. The customer has not fulfilled their payment obligations to us. The claim was sent to debt collection two years ago, and we have written off almost the entire purchase price as a loss.
Answer: No, you have no right to withhold the product. If this is done, it is considered as self-help. To withhold a product, the case must be brought before the bailiff, and there must be a decision from him. It is possible to simultaneously present the debt collection claim to the bailiff in the same case.
Right to withhold product 2
Do we as a service workshop have the right to withhold a repair if the owner does not pay for the work performed?
Answer: This question is very similar to the one above, but the difference is that here a 'work' has been performed on the product. In this case, the Act on Handicraft Services applies. Section 46 deals with the right of retention and states:
If the service concerns an item that has been handed over to or is otherwise with the service provider, and the consumer does not pay in due time what the service provider can demand according to the assignment, the service provider can retain the item until the consumer pays or provides adequate security for the claim.
The answer in this case is therefore yes.
Sale of uncollected services
As a service workshop, we occasionally experience that submitted services are not collected after repair. Can we dispose of or sell these products?
Answer: This is an issue that has actually received its own law. The law is from 1953 and is called 'Act on the right for craftsmen etc. to sell items that are not collected.' This law states, among other things, that if a repair is not collected and paid for within three months after the 'item' was completed, it can be sold, and one can take 'their share of the sale price.' If the item has no obvious value, it can be disposed of.
This, however, presupposes that certain obligations are fulfilled: The customer must have been informed that the item is ready and available for collection. If this is not done, the workshop is obliged to 'make known' that if the item is not collected within a specified time, it will be sold or disposed of. This notice must be sent by registered mail.
However, the law states that if it is not possible to send a notice, notice of sale shall be announced at “the place where such items are delivered and received”. It is important to note that if there is money left after the sale, it shall go to the owner of the product. If the owner cannot be found, the amount goes to the state treasury. It is not permissible to sell or dispose of a product if there is a dispute related to the product, which is significant for whether it is disposed of or sold. An example of such a dispute could be the price of the repair.
What is normal use?
We have received a somewhat special case. A customer has handed in a mobile phone for service. The phone has clear marks from being used as a bottle opener. The customer also admits this but believes this is something the mobile phone should withstand. The phone's motherboard has been subjected to such great stress that it has become unstable, and repair is unprofitable. The workshop has naturally refused to repair it under warranty/complaint. The customer does not accept this and wants to take the case further! Do you know of any similar cases that I can refer to in my response to the customer?
ANSWER: This is a typical example of how mobile phones are used differently, and how people have different perceptions of what products should withstand. I have no similar case on this. But to claim a complaint, the product must have a defect, that is, an inherent weakness, i.e., a manufacturing defect. This does not apply in this case. In addition, the product is manufactured for normal use, and a bottle opener is not normal use for a mobile phone. It is highly doubtful that any supplier will accept this as a defect claim.
Difficult three-letter abbreviations
Eight months ago, we sold a video camera with a hard disk (HDD). Recently, the customer returned. He said that a friend had told him that this was not a camera that filmed high-resolution images, HD images. The customer wants to cancel the purchase or exchange it for an HD camera. He claims he was misinformed by the seller and that HDD (hard disk drive) was perceived as HD (high definition). Our seller denies this, arguing that after many years in the industry, he knows the difference between a camera with a hard disk and an HD camera. What is the customer entitled to?
ANSWER: The customer claims exchange or cancellation with reference to the Consumer Purchases Act §15 (the item's characteristics), and that the seller should have sold this as an HD camera. If it does not appear in any sales information (advertisement, poster in the shop, etc.) that this is an HD camera, then it is based on the information the seller provided at the time of sale. This is then 'claim against claim'. The main rule is that the person making the claim must document this. If the customer can document that the seller sold this as an HD camera, he has a good case. Without such documentation, it is difficult to see that this is covered by the 'concept of defect'.
Documentation requirements for the first six months
When we have sold a mobile phone that has a fault, we often have problems explaining external influences on the phone. This applies to those who have received an estimate from the workshop. This is relevant for both liquid and impact/crush damage. We are aware that the burden of proof lies with us when the phone is under 6 months, but the Consumer Council does not consider it sufficient with photographic documentation and explanation that the damage is present. They require documentation on how the damage occurred. When we have photographic evidence that clearly shows liquid or a crack in the display, should this not suffice? We find this a strange way to handle such damages. As it stands now, we will lose all such cases that go to the Consumer Council, as it is impossible to prove the origin of the damage.
ANSWER: The question of what constitutes sufficient documentation is a recurring issue for us. Since reference is made to the requirements set by the Consumer Council for documentation, we have forwarded the question to legal advisor Vivian Mikalsen at the Consumer Council. She has mobile phones as one of her areas of responsibility. Here is her response:
For a fault not to be considered a legal defect, the phone must have been subjected to abnormal use. It is up to the seller to document this. Since it is the workshop that examines and possibly repairs the product, the seller will depend on the workshop report to substantiate abnormal use. In legal practice, quite strict requirements have been set for the seller's duty to document. It will not be sufficient for the consumer/possibly the Consumer Council to be sent pictures, with a message that signs of liquid have been found on the circuit board. The possible cause of this must also be stated. An ordinary person has no opportunity to see where the damage is and assess whether this is something caused by careless use or by normal use. A brief explanation of how extensive the liquid damage is, where the liquid has entered, and the connection between the damage and the symptoms the customer experiences should be provided. Regarding impact damage, it is somewhat easier for the workshop. If they see that this is a fault caused by external influence/impact, they can write this. It is then useful to include a sentence about why they believe impact is the cause, for example, that a part is knocked loose, or that such damage to the display occurs due to crush damage and cannot have another cause.
Documentation requirements for HD Ready
We sold a TV three years ago. The customer claims that our salesperson promised that this screen would be ready for HD broadcasts (HD Ready). The fact is that this screen is not. The salesperson believes this is not correct and that he never 'promised anything' about HD Ready. How do we handle such cases?
ANSWER: An oral agreement is as binding as a written one, but it is naturally more difficult to document. If there is a brochure, receipt, etc. that states the screen is HD Ready, then the case is clear. The customer is right, and this is a defect (based on the expectations set during the sale). If the customer's claim is that this was only said by the salesperson, it is different. The main rule is that the one who makes the claim must document it. In this case, it means that if the customer claims the salesperson said this, he must also be able to document it.
Loan products to employees
Our salespeople depend on knowing the products inside out, so they can best assist dealers and customers. To make this easier, we lend out TV sets to our employees, which they use privately for a period before they are replaced by another model. Our auditor asked us to check if this is taxable. Can you help?
Answer: This is an issue that affects most in our industry, as the products are precisely those found in a household. To have this checked in the best possible way, we have sought advice from a large auditing firm. Here is the answer in full:
Gross salary reduction when transferring TV etc. from employer to employee (seller) as a private benefit/natural benefit, while the seller is allowed to use a product he sells privately, with the advantages this entails for the employer, cannot be carried out in the same way as the PC scheme. This is a special regulation that does not go further than the benefit of private use of the employer's data equipment.However, the Ministry of Finance has in a statement reproduced below accepted gross salary deductions for a number of tax-free benefits, but such a benefit as you request is not considered tax-free according to the tax law regulation § 5-15. Thus, we are left with the ordinary rules on taxation of natural benefits at market value.
I can also see that the advantage of the seller becoming familiar with the product provides a basis for a particular reduction in the valuation of the natural benefit. An example here could be the car salesman who is fully taxed for a free car. However, when valuing the sold TV, which should be based on market value, a deduction for staff discount can be made. This is referred to in the Tax ABC 2008 as follows:Staff discount on goods is not taxed when all the following conditions are met:* the discount must be considered reasonable* the item is produced or sold in the employer's business* the item withdrawal must be considered to cover a normal private consumption.
Purchasing more frequently than every three years of significant capital items such as cars, boats, etc., cannot be considered to cover ordinary private consumption. The Ministry of Finance has, for the time being, assumed that the tax exemption can include services when the conditions applicable to employee discounts on goods are met. For the discount to be considered reasonable, it must not bring the price below the employer's cost price, including indirect costs. The discount must normally not be greater than that given to major customers. If the discount exceeds a reasonable level or nothing is paid for the benefit, the advantage gained is fully taxed. If the TV remains the employer's property, the employee will have to be taxed for free use. In such benefit taxation, no deduction can be made for the employee discount element mentioned above.
Refuses to return loan product
We have a customer who refuses to return a loan product. The case concerns a complaint that is now closed, and not in the customer's favour. The customer demands to keep the loan product until the case is brought forward via the Consumer Council and possibly the Consumer Disputes Committee. It is approximately 2 months since we closed the case from our side, and we have not heard anything from the customer since. What can/should we do?
Answer: It is assumed that there is no written agreement regulating the loan. Unfortunately, experience shows that a number of consumers do not return the replacement item. The loaned item is often of higher value than the one submitted for repair. To protect themselves, many businesses have introduced a deposit for loans, or an invoice with a specified amount that the consumer must sign.
If the replacement item is not returned, the invoice amount will be a legitimate claim against the consumer. Upon correct return, the invoice is credited or the deposit returned. Regarding the Consumer Purchases Act § 30 third paragraph or the preparatory works to the law Ot.prp. no.44/NOU 1993, we interpret this to mean that there is nothing preventing such a deposit for a replacement item. In this case, he must invoice the consumer for the loan product based on the value the business places on the item. The business will then have the opportunity to send this to debt collection if the customer does not return the item, or if he does not pay.
The consumer loses no rights even if there is a dispute to be brought before the consumer council. One can also bring the case before the bailiff. Therefore, a written agreement is important in such cases. The Electronics Industry Foundation has prepared a template for such an agreement, which can be obtained by contacting us.
Demo products
We had a refrigerator as a demonstration product in our store. After one year, we sold this as a B-grade item to a consumer, at a reduced price. The customer was informed that it was a display model. Now the fridge is defective after three years, and the customer is complaining based on the five-year rule. Our supplier refuses to accept this under warranty as it has been more than two years, and because it is a demonstration product. Is this correct?
ANSWER: In this case, two laws apply. You, as the trader, have purchased this from a supplier, and this is a sale between two professional parties. Therefore, the Sales Act of 1988 applies. This states that unless otherwise agreed between the parties, a two-year warranty applies. Most agreements between trader/chain and supplier contain clauses that the Consumer Purchases Act is the basis, otherwise, the trader will be responsible 'in the last three years for consumer purchases'. Be also aware that many traders and suppliers have special agreements regarding display products. So our advice is that you check what is stated in the agreement with your supplier. The end customer has bought the refrigerator in your store, and this is a consumer purchase, so the Consumer Purchases Act applies here. The fact that the customer has bought a display product at a reduced price does not change this.
Further details on the marketing act
What is a bonus?
It is now legal to offer bonuses. On 1 June 2009, the new marketing act came into effect, which applies to everyone selling goods and services. The most interesting aspect is that the ban on bonuses has not been continued. The new law means that a seller can, for example, give away a cured ham when purchasing a camera. In this context, it is about tempting the customer with a product or service if you buy another product (the main product). The 'temptation product' can either be free or discounted compared to the usual price. Previously, the bonus had to have a natural connection with the main product, for example, the customer would receive a bookmark when buying a book. This is no longer the case, something we have already seen examples of in our industry. The chains Lefdal and Siba were early adopters, both offering a bicycle with the purchase - and a bicycle, as is well known, does not have a natural connection with the industry's products. Canon has also been early, offering a camera with a Creative MP3 player included. As before, it is still allowed to give away 'more of the same service'. Examples of this can be petrol stations giving away every tenth wash.
Legal in Sweden
In Sweden, bonuses have been legal for a long time, which has led to some peculiar outcomes. El-giganten in Sweden has, among other things, given away scooters as bonuses. This became so popular that El-giganten became the largest scooter importer in Sweden for a period. However, such a service can still be affected by other provisions in the law, an example of this can be that all marketing revolves around the additional item and not the main item.
So, it is only creativity and perhaps the cost budget that limits what we will see in the future. A car has already been given away in Norway with the purchase of a house.
Consequence of EU directive
The law is a result of the EU directive 2005/29/EC on 'unfair commercial practices'. The law has some relaxations and some tightenings compared to the old law. Most changes are in communication with consumers. An important change is that a claim about a product or service must now be documented. Paragraph 3 states that the documentation must be in the advertiser's possession when the marketing takes place. Completely clear exaggerations or other claims that are unrealistic will still be acceptable. An example of this is 'The world's cheapest fishing rod'.
Charitable purposes
Another change worth noting is that it is now possible to link the sale of a product or service to a charitable purpose. 'Buy a boat and 10 percent goes to the Rescue Society' would be such a connection. As is known, Nittedal's matchboxes have had '1 øre' for charitable purposes. This is the only exception that was previously accepted, most likely for historical reasons. Today, for example, water bottles are sold completely legally with a label stating that one krone from each bottle sold goes to Unicef. Here, the company has a unique opportunity to show its social responsibility while selling its goods and services.
Telephone sales and advertising in the mailbox
In the new law, there is also a tightening regarding telephone sales and opting out of advertising. For telephone sales, a written agreement must now always be made, for example, the seller sends an email or SMS to the customer. All important information must be provided here, including price, any binding period, and cancellation rights. The agreement is only binding when the customer has sent written confirmation to the seller. Companies engaged in telephone sales are now required to check whether customers have opted out of telephone sales every month, compared to every third month previously.
Attachments
The option to opt out of unaddressed advertising in the mailbox has been extended to also cover the doormat. The scheme now also applies to addressed advertising. It will still be permissible to include inserts and similar in newspapers and magazines, as this is essentially no different from regular advertisements. Such advertisements are covered by editorial responsibility and can thus be covered under a slightly different degree of freedom of expression than regular advertising. As for public information, this will still come in the mailbox, even if the recipient has opted out of unaddressed advertising. This is good news for neighbourhood associations, sports teams, and school bands.
Contact person for legal questions:
Jan Røsholm
+47 928 87 000
jr@elektronikkbransjen.no
Below you will find links to a number of laws and regulations that are relevant to the members of the electronics industry.
Laws
Act on limited companies (the Companies Act).
Act on worker protection and working environment etc.
Act on the conclusion of agreements, on authority and on invalid declarations of intent.
Act on flammable goods as well as liquids and gases under pressure. Applies only to Svalbard
Holiday Act.
Act on consumer purchases (the Consumer Purchases Act)
Act on commercial activity with used and discarded items (the Second-hand Trade Act).
Act on artisan services etc. for consumers (the Artisan Act).
Sales Act.
Act on control of marketing and contract terms (the Marketing Act).
Act on control of products and consumer services (the Product Control Act).
Broadcasting Act.
Act on the duty to provide information and the right of withdrawal etc. in distance selling and sales outside fixed retail outlets (the Right of Withdrawal Act).
Product Liability Act
Act on supervision of electrical installations and electrical equipment.
Act on protection against fire, explosion and accidents
Other laws
Regulations
Regulation on qualifications for electrical professionals
Regulations on radio dealer control
Regulation on radio dealers' duty to report to the Norwegian Broadcasting Corporation
Regulation on authorisation for installers of electronic communications networks and radio equipment (authorisation regulation)
Regulation on registration and requirements for import and sale of radio and telecommunication terminal equipment Regulation on cancellation form information on how the cancellation forms should be used
Regulation on television receivers regulations on
regulation on safety in electronic communications networks (galvanic isolation)
EE register
Regulatory help for discarded electrical and electronic products
Other regulations
Contact person for legal questions:
Jan Røsholm
+47 928 87 000
jr@elektronikkbransjen.no
