Notice is hereby given of the Act on Contracts and other legal transactions pertaining to property law, cf. Consolidation Act no. 781 of 26 August 1996 with the amendments resulting from section 2 of Act no. 1376 of 28 December 2011 and section 15 of Act no. 1565 of 15. December 2015.
Conclusion of contracts
An offer and a reply to an offer shall be binding on the person making them. The rules in Art. 2-9 of this Act shall apply, unless otherwise provided by the offer, the reply, the trade usage or other custom.
If the offeror has fixed a period for acceptance of the offer, the acceptance must reach him within that period.
(2) If the offer is made by letter, acceptance period begins to run as from the date indicated on the letter, and, if made by telegram, as from the moment the telegram is handed to the telegraph office of the place of dispatch.
If the offer is made by letter or telegram and no acceptance period has been fixed, the acceptance must reach the offeror before the end of the period which could reasonably be expected to elapse when he made the offer. In calculating this period, unless otherwise indicated by the circumstances, it shall be presumed that the offer is received in due time and that the acceptance is sent without delay after the offeree has had reasonable time to consider it and that it is not delayed in transit . If the offer is made by telegram, the acceptance shall be communicated by telegram unless it can reach the offeror in due time by another equally fast means
(2) An oral offer with no fixed period for acceptance shall be accepted immediately.
A late acceptance shall be regarded as a counter-offer.
(2) This does not apply, however, if the offeree believes that it was received in due time and the offeror ought to be aware of it . In such case and if offeror does not intend to accept the reply, the offeror must inform the offeree accordingly without undue delay. If he fails to do so, the contract shall be deemed to be concluded.
If rejected, the offer lapses, even if the reply period has not yet expired.
A reply purporting to accept an offer but because of additions, restrictions or reservations is not in accordance with the terms of the offer, shall be regarded as a rejection combined with a counter-offer.
(2) This does not apply, however, when the sender of the reply believes that it is in accordance with the offer, and the offerorought to be aware of it. In such case and if he does not intend to accept the reply, the offeror must inform the other party accordingly without undue delay. If he fails to do so, a contract with the terms contained in the reply shall be deemed to be concluded.
A revoked offer or a reply will lapse if the revocation reaches the other party before or at the same time as the offer, or if the reply is brought to his knowledge.
If the offeror has stated that he will regard silence on the part of the offeree as an acceptance of the offer, or if it appears from the circumstances of the case that the offeror does not expect an express reply, the offeree must, if so requested, nevertheless make a statement of acceptance if he intends to accept the offer. If he fails to do so, the offer lapses.
If, in a statement that would otherwise be deemed to constitute an offer, a person has used the words “uden forbindtlighed”, “uden obligo” (without obligation) or a similar expression, the statement shall be regarded only as an invitation to make offers in accordance with the terms contained in the statement. If, within a reasonable time, such offer is made by a person to whom the statement was addressed, and if the offeree must take it to have been made in response to the statement, the offeree must inform the offeror accordingly without undue delay if he does not intend to accept the offer. If he fails to do so, the offer shall be deemed to be accepted.
Art. 1-9 shall not apply to the conclusion of contracts concerning the sale of goods covered by the Convention on Contracts for the International Sale of Goods.
Authority of agents
Any person who has authorised another to make a legal transaction shall directly incur rights and obligations under a contract. Those rights and obligations are owed any third party with whom the agent has concluded a contract in the name of the principal and within the scope of his authority.
(2) Any person who, under a contract with another person, occupies a position which by law or custom confers on him the power to act within certain limits on behalf of that other person shall be regarded as authorised to enter into legal transactions falling within the scope of his authority.
If, when making the legal transaction, a person acting as an agent acts contrary to the instructions of his principal, the act shall not bind the principal if the third party realised or ought to have realised that, in making the legal transaction, the agent acted outside his authority.
(2) If the authority is governed by the provisions of Art. 18 of this Act, and if the agent acted outside his authority when making the legal transaction, the act shall not bind the principal even if the third party acted in good faith.
A principal who intends to revoke an authority governed by articles 13-16 of this Act shall, even if he has informed the agent that the authority no longer stands , take the steps for each particular case as provided in the sections referred to above. If several provisions apply to an authority, they shall all be complied with.
(2) The third party whose authority has been revoked as provided in Art. 13 of this Act may not rely on the fact that the authority was not revoked in another manner.
An authority that has been brought to the knowledge of a third party by a separate statement addressed to him by thePrincipal, is revoked when a separate statement specifying that the agent’s authority is longer stands has reached the third party.
An authority that has been publicly communicated in newspapers or in any other way by the principal shall be revoked by a statement to that effect published in the same manner.
(2) If this is not possible, the revocation shall be communicated in a manner equally effective. The principal may require the authority specified in Art. 17 of this Act to determine which steps to take in that respect.
(3) Registration of the authority does not amount to public communication.
An authority as mentioned in Art.10 (2) of this Act is revoked when the agent is removed from his position.
A document granting agency authority that has been handed over to the agent, and which must be deemed to be intended to be in his possession and to be shown to a third party, shall be revoked by the principal demanding the return or destruction of the document.
(2) If so requested, the agent shall return the document to the principal.
If the principal shows that I is be probable that a document granting agency authority governed by Art. 16 of this Act has been lost or for any other reason cannot be recovered within a reasonable time, it may judicially be declared ineffective.
(2) A petition for a declaration shall be filed with the ordinary court of first instance at the principal’s place of residence or his last known residence. If the court finds that a petition should be granted, the court shall prepare a declaration stating that the authority will become ineffective once the declaration has been published in the Danish Official Gazette (Statstidende) and after publication a fixed period of no longer than 14 days has passed. In its declaration, the court may specify that the declaration shall also be published in another manner prior to its publication in the Official Gazette. When publication is effected as provided and the period fixed by the court has passed, the authority will become ineffective in relation to the principal. If the principal so requests, the court shall issue a certificate to that effect.
(3) No appeal lies against a decision of the court under this section. If the court sits with more than one judge, the presiding judge shall make the decision.
A power of attorney based solely on a statement from the principal to the agent is revoked when the declaration making the authority ineffective has reached the agent.
If, despite the revocation of the authority or declaration making the authority ineffective, the principal has special grounds to believe that the agent intends to make a legal transaction on his behalf with a specific third party, and if he thinks it is unlikely that the third party knows that the authority is no longer effective, the principal shall, to the extent possible, so inform the third party. If he fails to do so, the legal transaction becomes binding on the principal if the third party acted in good faith.
If the authority has not been revoked or declared ineffective but the principal has instructed the agent not to act under the authority or in any other way indicated that the authority is ineffective, any legal transaction made under the authority shall not be binding on the principal if the third party knew or ought to have known about the termination of the agency.
Authority is still effective if the principal dies, provided that special circumstances do not cause the authority to lapse. However, even if such circumstances exist, a legal transaction based on the authority is binding on the principal’s estate if the third party neither knew nor ought to have known about the death and its effects on the agent’s authority to make the act. If the authority is governed by the provisions of Art. 18 of this Act, the transaction shall only be valid if, in addition to the third party, the agent neither knew nor ought to have known about the death and its effects at the time he made the legal transaction.
(2) The authority will terminate at the end of the day of an advertisement for creditors in the Danish Official Gazette (Statstidende). If, after the death of the principal, the agent pays any debt and the estate is insolvent, the sum paid may be refunded.
If the principal becomes incapacitated and is divested of his legal capacity, see Art. 6 of the Danish Guardianship Act (værgemålsloven), a third party incurs no rights or obligations vis-à-vis the incapacitated person under a legal transaction with the agent other than those the third party would have incurred if the legal transaction had been made directly with the incapacitated person. In such circumstances, the third party may not rely on the legal transaction if : (i) third party knew or ought to have known about the incapacity, (ii) the act was made under an authority governed by Art. 18 of this Act, and (iii) the agent knew or ought to have known about the incapacity at the time the legal transaction was made.
If the principal becomes insolvent, the third party incurs no rights or obligations vis-à-vis the bankrupt’s estate under the legal transaction concluded with the agent, other than the rights and obligations the third party would have incurred if the legal transaction had been made by the principal himself. If the legal transaction is made under an authority governed by Art. 18 of this Act, the third party may not rely on the legal transaction against the bankrupt’s estate if the agent knew of ought to have known about the bankruptcy at the time the legal transaction was made.
If the principal dies, becomes incapacitated and has divested his legal capacity, see Art. 6 of the Danish Guardianship Act, or becomes bankrupt, the agent may by virtue of the authority conclude the legal transactions required to protect the estate or the incapacitated person from loss or damage until the necessary steps can be taken by the estate or a guardian.
Any person who acts as an agent on behalf of another person warrants that he has the necessary authority. If he gives no notice of such authorisation or that his legal transaction is authorized by the named principal or is, for some other reason, binding on him, the agent shall pay compensation for the loss or damage suffered by a third party as a result of the fact that the legal transaction cannot be relied on against the named principal.
(2) This provision shall not apply if the third party knew or ought to have known that the person who made the legal transaction did not have the necessary authority. Nor shall this provision apply if the person who acted under an authority which was invalid or ineffective for reasons he was unaware of and which the third party could not reasonably expect the agent to have been aware.
The above provisions of this Part concerning authority to make legal transactions shall apply correspondingly to an authority to act on behalf of the principal in respect of legal transactions relating directly to the principal.
Nothing in this Act will affect any special provisions in the current legislation concerning specific types of agency.
(2) The provisions of Art. 7 and 32 of Act No. 23 of 1 March 1889 on commercial registers, business names and powers of procuration continue to apply to the revocation of a power of attorney which has been entered in the commercial register. Once the power has been entered in the commercial register and duly notified, the person granting the power of attorney is not required to revoke the power in any other way.
Invalid declarations of intention
A declaration of intent that has been unlawfully induced by actual violence or by threat of immediate use of such violence is not binding on the person coerced.
(2) If the duress is exercised by a third party and if the person to whom the declaration was adressed acted in good faith, the coerced person shall, if he intends to rely on the duress, notify the receiver of the declaration without undue delay after the duress has ceased to operate. If he fails to do so, the person coerced is bound by his declaration.
A declaration of intent that has been unlawfully induced by coercion other than that specified in Art. 28 of this Act, is not binding on the coerced person if the person to whom the declaration is adressed, has exercised himself the coercion or if the latter realised or ought to have realised that the declaration was unlawfully induced as a result of coercion by a third party.
A declaration of intent shall not binding on the person making it if the person to whom it is addressed, has induced it by fraud or the latter realised or ought to have realised that it was induced by fraud on the part of a third party.
(2) If the person to whom the declaration was addressed fraudulently misrepresented circumstances that may be deemed to affect the declaration or fraudulently concealed such circumstances, the declaration shall be deemed to have been made by such fraud unless it is shown that the fraud was unlikely to have affected the declaration.
If a person has taken advantage of another person’s financial or personal distress, lack of knowledge, thoughtlessness or an existing dependency relationship to obtain or condition a benefit that is substantially disproportionate to the consideration or for which no consideration is to be given, the person so exploited shall not be bound by his declaration of intent.
(2) The same applies if the exploitation governed by subsection (1) hereof is a result of the acts of a third party and the person to whom the declaration of intent was adressed realised or ought to have realised this.
Any person who has made a declaration of intent which, as a result of a clerical error or other mistake on his part, has been given a different meaning from that intended, shall not bound by the terms of his declaration if the person to whom the declaration was addressed realised or ought to have realised that an error or mistake had been made.
(2) If a declaration of intent is transmitted by telegraph or made orally by an agent is inaccurate as a result of an error on the part of the telegraph service or inaccurate expression by the agent, the person making the declaration shall not be bound by the declaration in the form in which it was made even if the person to whom it was addressed acted in good faith. If the person making the declaration intends to claim that the declaration is not binding, he shall give notice to this effect without undue delay after the distortion came to his knowledge. If he fails to do so, he shall be bound by the declaration in the form in which it appeared if the person to whom the declaration was addressed acted in good faith.
Even if a declaration of intent shall otherwise be considered as valid, the person to whom the declaration was adressed may not, however, rely on the declaration if, as a result of circumstances existing at the time when the declaration came to his knowledge and of which he must be deemed to have known, it would be contrary to the principles of good faith to rely on the declaration.
If a written declaration of intent is a sham and the person to whom it was addressed has assigned a right under the declaration to a third party in good faith, the sham may not be relied on against the third party in good faith.
If a creditor has lost the receipt for the payment of a sum of money outside of his will, the debtor shall nevertheless be discharged of his obligation upon payment, if such payment is made in good faith, after the due date, against the delivery of the receipt.
A contract may be modified or annulled , in whole or in part, if it would be unreasonable or contrary to the principles of good faith to enforce it. The same applies to other legal transactions.
(2) The decision referred to in subsection (1) shall take into account the circumstances existing at the time the contract was concluded, the terms of the contract and any subsequent circumstances.
Special provisions on consumer contracts
The provisions of this Part shall apply to consumer contracts, including terms contained in consumer contracts.
(2) For the purposes of this Act, a “consumer contract” shall mean a contract that a seller or supplier concludes for purposes relating to his trade, business or profession when the other party to the contract (the consumer) mainly acts for purposes outside his trade, business or profession. The seller or supplier has the burden of proof to show that a contract is not a consumer contract.
(3) A contract concluded or negotiated by a seller or supplier on behalf of one of the parties shall also be considered as a consumer contract subject to the provisions as set out in subsection (2) above.
If there is doubt as to the meaning of a contract and the contractual term concerned has not been individually negotiated, the term shall be interpreted in the manner most favourable to the consumer. The seller or supplier has the burden of proof to show that a contractual term has been individually negotiated.
(2) A written contract offered to the consumer shall be drafted by the seller or supplier in a clear and comprehensible language.
The provisions of Art. 36(1) of this Act apply to consumer contracts. If it would be contrary to the principles of good faith and fair dealing and causes a significant imbalance in the parties’ rights and obligations arising under the contract to the detriment of the consumer to rely on a contractual term, the legal effects specified in Art. 36(1) of this Act shall also apply. In such a case, the consumer may demand that the other provisions of the contract shall continue to bind the parties, if possible.
(2) The provisions of Art. 36(2) of this Act apply to consumer contracts with the modification that, in the assessment of the circumstances specified in Art. 36(2) of this Act, including the terms of other contracts which are connected with the contract in question, shall not be taken into account in the assessment of the subsequent circumstances to the detriment of the consumer with the result that the contract may not be modified or annulled.
If a clause in a contract provides that the law of a country outside the European Economic Area applies to the contract, such clause does not apply to matters relating to the rules relating to unfair contract terms. However, this only applies if, in the absence of the clause, the law regulating such terms in a country within the European Economic Area would apply to the contract and if that law grants the consumer a better protection against unfair contract terms.
When, under the provisions of this Act, the binding effect of a declaration of intent depends on the fact that the person to whom it was addressed did not know or ought not to have known a certain fact or otherwise acted in good faith, account shall be taken toto what he realised or ought to have realised at the time when the declaration became known to him. However, in exceptional circumstances, account shall also be taken of the knowledge he has acquired or ought to have acquired after the time specified above, but before the declaration of intent has a decisive influence on his conduct.
If a person who is required to “give notice” under the provisions of this Act has submitted such notice for transmission by telegraph or post, or if another proper means of transmission is used, - any delay or non-arrival of the notice shall not be prejudicial to him.
This Act repeals the Danish Code of King Christian V, and as for the Faroe Islands 5-1-4 and 5-1-5 of the Norwegian Code of King Christian V.
Act no. 1376 of 28 December 2011 (Implementation into Danish law of Part II on the conclusion of the contract in The United Nations Convention on Contracts for the International Sale of Goods)* contains the following entry into force and transitional provisions:
*The amendment of the Act concerns section § 9 a.
The Minister of Justice shall determine the date of the entry into force of the Act*
(2) For aftaler, der er indgået før lovens ikrafttræden, finder de hidtil gældende regler anvendelse. Det samme gælder for aftaler, hvor forslaget om at indgå aftalen er stillet før lovens ikrafttræden.
* Consolidation Act no. 973 of 24 September 2012 provides that the Act comes into force on 1 February 2013.
This Act shall not extend to Greenland and the Faeroe Islands, but may be brought into force for Greenland by a Royal Decree subject to any deviations following from the specific conditions prevailing in Greenland.
Act no. 1565 of 15 December 2015 on employment clauses* contains the following concerning entry into force and transitional provisions:
*The amendment of the Act concerns section 38.
This Act comes into force on 1 January 2016.
(2) The Act shall apply to contracts concerning employment clauses concluded on 1 January 2016 or later.
Subsections (3)-(4). (Omitted)
(5) The Act shall not apply to contracts concerning non-competition and non-solicitation clauses concluded prior to 1 January 2016. The rules previously applicableshall apply to contracts concluded prior to 1 January 2016.
Without prejudice to paragraph 2, this Act shall not extend to the Faeroe Islands and Greenland.
(2) Art.15 may be brought into force for Greenland by a Royal Decree subject to any deviations following from the specific conditions prevailing in Greenland.
The Ministry of Justice, 2 March 2016
SØREN PIND / Mette Johansen