AFGØRELSESOVERSIGT
The following decision overview provides an outline of new and relevant rulings within construction and building. The overview contains summaries of decisions since the last newsletter and allows the reader to click through to the respective rulings if needed. The decisions are divided into themes. The section begins with the decision of the month, which highlights a specific theme or issue.
Månedens afgørelse: TBB2025.509 – sag nr. C-16644 afsagt den 4. marts.
The decision of the month concerns the construction of an extension as well as a complete renovation of a property. The works were delayed, and the consumer client was granted a proportional reduction. The main contractor had not remedied the defects in due time, and the right to remedy was therefore considered forfeited. Claims for additional work were largely rejected, while the claim for liquidated damages was also not upheld.
Resume
• A dispute arose between a main contractor (“MC”) and a consumer client (“CC”) regarding delays, defects, and payment for alleged additional work in connection with a complete renovation and extension.
• The parties had entered into a construction contract based on AB 18. The main contractor (MC) had overall coordination responsibility for the construction, while certain trade contracts were handled directly by the consumer client (CC). According to the construction contract, the work was to be carried out from early January 2022 to late November 2022.
• On March 6, the consumer client (CC) sent an email with the subject “Change of completion date,” in which it was stated, among other things, that the deadline for handing over the turnkey house and extension was set for March 29. In the same email, CC also gave notice of a claim for liquidated damages starting from March 30.
• The project was handed over on May 15, 2023. A dispute then arose as to whether the consumer client (CC) was entitled to a proportional reduction due to defects in the project, as well as a claim for liquidated damages. At the same time, the main contractor (MC) claimed payment for additional work and the remaining contract sum. Prior to the arbitration case, an expert inspection was conducted, during which MC largely acknowledged the defects.
• The main contractor (MC) argued that the company had the right to remedy the defects and thereby avert the consumer client’s (CC) claim for a proportional reduction. CC disputed this and argued that MC had forfeited its right to remedy.
• The arbitration tribunal assumed that the consumer client (CC) had, on several occasions prior to handover – including in emails dated March 6 and April 26, 2023 – complained about a number of issues, and that these defects were also pointed out during the handover on May 15, 2023. It was further established that the main contractor (MC) had committed to remedying the defects, and that a deadline for doing so was set on May 17, 2023.
• The arbitration tribunal emphasized that the main contractor (MC) had sufficient opportunity to remedy the defects but failed to do so effectively and in due time, even after repeated complaints and an explicitly set deadline.
• Based on the evidence, it was established that a significant portion of the defects pointed out by the consumer client (CC) both before and during handover, and which the main contractor (MC) had undertaken to remedy, were still present during the expert inspection.
• The main contractor’s (MC) remediation was therefore assessed as deficient or not carried out. The solutions proposed by MC, including those concerning the sealing of a valley gutter and the floor structure in the extension, were deemed completely inadequate by the expert.
• Under these circumstances, the arbitration tribunal found that the main contractor (MC) had forfeited the right to remedy the defects. The consumer client (CC) was therefore upheld in the claim for a proportional reduction in the contract sum, corresponding to the expert’s assessment of the remediation costs, totaling DKK 620,056.
• The main contractor’s (MC) claim for payment for 11 alleged additional works was largely rejected as undocumented and not separately agreed upon. The consumer client’s (CC) claim for liquidated damages was also not upheld, as the notice was not made in a sufficiently specific and unequivocal manner, and there was no documentation proving that liquidated damages were actually incurred.
• After offsetting the parties' claims, the main contractor (MC) was required to pay DKK 485,106, along with legal interest and court costs, to the consumer client (CC).
Hvad kan udledes af afgørelsen?
• The decision shows that a contractor can forfeit their right to remedy defects if the defects are not remedied in a timely and adequate manner, especially when the client has repeatedly complained, and the contractor has committed to making repairs but fails to carry them out effectively. It is the contractor's responsibility to ensure that defects are actually remedied to a professionally acceptable standard within a reasonable time.
• Furthermore, the decision illustrates that notification of liquidated damages must be made in a specific and unequivocal manner to form the basis of a claim, and that the burden of proof for additional work lies with the contractor – including the requirement for written documentation or agreements.
Øvrige afgørelser
Ekstraarbejder og passivitet
• TBB2025.505 – C-16739
In 2022, the main contractor ("TE") and a subcontractor ("UE") entered into a subcontract for ventilation work on a building, the establishment of a new 2nd floor, and a production building under AB 18 terms. UE made claims for payment of six invoices for additional work, which TE denied, citing counterclaims for defects. The arbitration tribunal concluded that the requirement for written documentation in the contract was not a condition for validity and that a clause stating that TE should only pay UE if TE received payment from the client ("BH") did not prevent UE's right to payment. UE partially succeeded in their claims, while others were rejected. The tribunal rejected a claim for an invoice because it was sent 18 months after the issuance of the agreement letters. In contrast, another claim was upheld as the ranking of the documents favored UE’s interpretation. Additionally, the tribunal found that UE could only be blamed for defects in a heat pump that did not meet the bid requirements. TE’s claim for defects related to air exchange was dismissed due to insufficient documentation and the lack of an expert inspection specifically addressing this matter.
Bygherrens ansvar ved skader mellem entreprenører
• TBB2025.534 – C-16416
In April 2021, the client ("BH") initiated a regulatory project involving the construction of 62 homes, which were to be built under subcontracting agreements. BH entered into agreements with a carpentry contractor ("FE1") in May 2022 and an electrical contractor ("FE2") in December 2021. During construction, it was found that there were errors in the electrical and plumbing installations when FE1 and its subcontractor used drywall clips for two layers of gypsum in walls with only one layer, leading to clips piercing hidden cables and pipes, causing significant damage. The insurance company offered compensation in March 2023, but BH rejected the offer and withheld payments to both FE1 and FE2. Both contractors then made claims against BH that exceeded the compensation offer. The arbitration tribunal considered BH’s responsibility under AB 18 §§ 27 and 53, which regulate risks and liabilities for consequential damage. The main rule is that damage caused by contractors to each other's work is irrelevant to the client, unless a contractor has committed a fault. The tribunal found FE1’s claim against BH was justified, while BH’s objections and counterclaims were rejected. The tribunal also awarded BH DKK 450,000 including VAT for damage to cables and pipes, as the insurance company’s deduction for "recurrence effect" was not accepted. FE2 was also upheld, and BH was ordered to pay DKK 587,773.34 to FE1 and DKK 782,234.20 to FE2.
Forældelse og garanti
• TBB2025.521 – C-16292
In June 2018, the client ("BH") entered into an agreement with the main contractor ("TE") for the construction of a rotten tank system. The original contract sum was approximately DKK 23.3 million, but was reduced to DKK 19.7 million due to adjustments in the project. A risk pool of DKK 600,000 was also established, with both parties contributing half. The delivery of the project was delayed, which led to the operation of the tank being postponed. BH then made claims based on the delay and issues regarding functional guarantees and defects. An expert inspection was conducted prior to the arbitration. The tribunal determined that the claim for delay was time-barred, as the limitation period is only interrupted for issues specifically covered by the expert inspection, which did not include the delay. TE was found responsible for exceeding the agreed polymer usage as the contractor had not conducted the necessary investigations before issuing the functional guarantee. However, the claim was reduced. The tribunal found that the risk pool could not be used to cover claims related to the functional guarantee, as the costs could not be considered unforeseen. BH’s claims for defects were partially upheld.
Entreprenørens rådgivning
• TBB2025.530 – C-15811
In this ruling, a main contractor ("HE") was held responsible for design defects in two agreements for the construction of a channel system for trout farming and an associated warehouse. Both agreements were main contracts, and AB 92 was adopted. In the contract between BH and HE, it was specified that HE and BH would jointly be responsible for design and supervision of the project. Material deliveries were to be made by two suppliers ("L1" and "L2") in agreement with HE. A disagreement arose regarding defects in the concrete work in the basins, and BH made a claim for DKK 8.1 million. The tribunal concluded that HE had full responsibility for the design of the concrete work involved in the dispute, even though it was not a total contract. This was due to the fact that HE, in collaboration with L2, had specifically taken on the design task. It also played a role that BH’s consultants lacked the necessary technical expertise to assess the structural aspects of the concrete, which HE should have accounted for. However, the tribunal found that HE could not be held responsible for the use of concrete elements designed for an "aggressive environment" instead of an "extra-aggressive environment," as it was BH’s decision not to apply further surface treatment. Based on the expert’s statements, the tribunal concluded that the concrete floors were both poorly designed and poorly executed, particularly concerning the placement of the reinforcement. HE was therefore ordered to pay compensation to BH.
Voldgiftsklausuler
• TBB2025.438 – BS-35722/2022-VLR
A construction project was carried out as a total contract for a client ("BH"), where the main contractor ("TE") had the overall responsibility, while the ventilation work was performed by a subcontractor ("UE"). After the delivery in 2015, problems arose with the system, including drafts and noise issues. TE later went bankrupt, leading BH to file a direct claim against UE in July 2018 for nearly DKK 3.4 million. The claim concerned issues such as noise from the ventilation system, insufficient access, and failure to meet the functional requirements specified in the project. It was stipulated in both the agreement between BH and TE and the agreement between TE and UE that disputes should be settled by arbitration under ABT 93 and AB 92. The district court found that BH should have been aware of the mentioned defects as early as the summer of 2015, and therefore, the claim was deemed time-barred when filed in 2018. The Court of Appeal then considered whether the case could be handled by the ordinary courts and concluded that UE was bound by the arbitration clause. This did not change the assessment, even though BH had filed the claim for damages outside the contract.
Andre emner
• TBB2025.515 – C-16576
In connection with the execution of five different projects in 2021 between a subcontractor ("UE") and a main contractor ("HE"), a dispute arose regarding payment. UE made a claim for approximately DKK 600,000, which HE rejected, citing alleged defects and claims for liquidated damages. The parties had opposing claims, and the case was handled by the arbitration tribunal, which concluded that both UE and HE had to bear the burden of proof for their respective claims. In the treatment of the five projects, the tribunal ruled as follows: In project 1, it could not be documented that defects existed in the work, so UE was upheld in their claim for payment. A claim for additional work was rejected as it was deemed undocumented. In project 2, UE’s claim was reduced because it turned out the agreed amount already included VAT. In project 3, UE claimed payment for additional work in the form of painting, but this was rejected as UE failed to demonstrate that the painting work was not included in the contract. There was also no separate agreement to justify payment for additional work. UE was fully upheld in project 4, and HE’s counterclaim was dismissed as there was insufficient documentation to support HE’s claims for defects and liquidated damages. Finally, the claim in project 5 was also upheld. The tribunal emphasized that HE did not raise objections in a timely manner but only reacted months after the invoice was sent. The tribunal also agreed with UE that UE’s letter of July 15, 2020, should not be considered a binding offer, but merely an estimate.
NYHEDER FRA BRANCHEN
Månedens fokus: Forsvaret opruster – og håndværkere får chancen
• According to Dansk Håndværk, thorough preparation and strong partnerships are crucial if small craft businesses are to succeed in the competition for defense contracts worth billions.
• A large-scale renovation and modernization of the Danish Defense’s building stock has been initiated, with around two billion set aside for the purpose. In this regard, the Ministry of Defense's Property Agency expects to offer a range of new tasks in the coming years – tasks that could also be relevant for smaller and local craft businesses.
• The tasks range from larger construction and infrastructure projects to the ongoing operation and maintenance of projects. "For years, we've seen how the defense’s buildings couldn’t be maintained within the previous budgets. Now, billions will be spent on renovating and modernizing, while completely new facilities are being established," says Morten Frihagen, Director at Dansk Håndværk.
• Securing contracts with the Danish Defense can, however, be a complex process. Dansk Håndværk therefore encourages interested parties to thoroughly familiarize themselves with the tender conditions, procedures, and framework agreements in advance, to have the best foundation for securing these tasks.
• Companies that wish to enter the Defense sector can benefit from partnering with actors who already have an agreement with the Defense. This can be an effective way to gain experience and access to tasks.
• The Ministry of Defense's Materials and Procurement Agency, as well as the Danish Business Authority, have provided useful advice for meeting some of the requirements the Defense places on its suppliers. Erhvervshus Midtjylland has also created a guide to increase the chances of becoming a supplier.
Kilder:
• Milliarder til Forsvarets renoveringer er en chance for lokale håndværkere – Læs artiklen click here.
• 6 gode råd, hvis du vil være leverandør til Forsvaret – Læs artiklen click here.
• GUIDE: Sådan bliver din virksomhed leverandør til Forsvaret – Læs artiklen click here.
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