Aftaleloven (the Danish Contracts Act)
Also known as danish contracts act, contract law, section 36
Aftaleloven decides when an agreement is binding, who was able to enter into it — and when a term can be set aside as unreasonable.
Key facts
- Decides
- Whether the agreement binds
- Contains
- The rules on authority
- Section 36
- Unreasonable terms can be set aside
In practice
A creditor meets this act in three places, and usually only once the claim is disputed.
- Was an agreement reached? Offer and acceptance need not be in writing, but they have to be provable. This is where the order confirmation earns its keep.
- Could the person who ordered bind the company? The rules on authority decide whether the buyer, the fitter or the intern committed the company. The objection “he had no authority” comes up more often than you would expect.
- Do your own terms hold? Under section 36 an unreasonable term can be altered or set aside. It rarely catches an ordinary interest clause between businesses, but it is why a set of terms of trade has to be defensible rather than merely sharp.
Where it commonly goes wrong
- Writing the terms as hard as possible. A term that can be set aside is weaker than one that is reasonable and holds all the way.
- Not recording who placed the order. Without a name and a role on the order, the question of authority stays open, and it takes time to close afterwards.