A: Buying and selling
The risk of accidental destruction of the goods passes from the seller to the buyer at the time when delivery has taken place. The time of delivery is therefore of decisive importance if the goods are delayed or there are defects in the goods.
An agreement between seller and buyer regarding the purchase of an item should therefore always contain a clear indication of how the item is delivered and who bears the risk of the item’s demise.
Local trading, when the buyer lives in the seller’s normal business area.
Collection purchase, here the buyer must pick up the item himself at the seller’s business address and the risk passes to the buyer upon handover.
Delivery purchase, here the seller delivers the goods to the customer and the risk passes from the seller to the buyer upon delivery to the buyer’s address.
Distance trading when the seller must send the item to the buyer.
In distance trading, it is common for the parties to agree on who pays the freight costs and at what point the risk passes from seller to buyer. In the absence of an agreement, the delivery is considered to have taken place when the goods are transferred to the buyer (consumer purchase) or transferred to a foreign carrier (commercial purchase).
In practice, this provision is often deviated from, as the so-called sales clauses, which are standard delivery terms, are usually used.
The Danish Purchase Act contains a description of the importance attached to each clause.
When trading beyond borders, the so-called INCOTERMs contain some international sales clauses, which have the same starting point as the Danish sales clauses, but which are much more comprehensive and more detailed in the description of the individual clause.
| Delivery-conditions | Shipping is paid by | Buyer’s risk begins when |
| EXW / AbFabrik | Buyer | When the item is made available to the buyer (at the seller) |
| FCA / Free carrier | Seller to first carrier Buyer from and including the first carrier | When first carrier takes over the item |
| FAS / Free at ship’s side | Seller to ship side Buyer from and including the ship side | When the item is made available in the port of shipment |
| FOB / Free on board | Seller to the item is on board the ship Buyer from and including shipping | When the item passes the ship’s side in the port of shipment |
| CIF / cost, insurance & shipping | Seller to port os arrival Buyer from ship and home | When the item passes the ship’s side in the port of shipment |
| CPT / Free shipping | Seller to specified destination. Buyer from and including specified destination | When first carrier takes over the item |
| DAF / Delivered to boarder | Seller to specified boarder. Buyer from and including the boarder | When the item is made available at the boarder |
| DDP / Delivered and paid custom | Seller to specified destination. Buyer from and including specified destination | When the item is made available at the specified destination |
In Denmark, they also use:
| Free delivery or franco | Seller to specified destination. (normally the buyers business address) | Once the item has arrived at the buyer |
| Free on the truck or free at the cart | Seller to first carrier Buyer from and including the first carrier | When first carrier takes over the item |
In addition to buying and selling, we should mention international sales act. The rules of the Danish Sales Act, as we often know them, apply to national purchases, this means an agreement between a buyer and a seller who both operate in Denmark.
On the other hand, if the purchase has an international element, for example, an agreement between a Danish seller and a foreign buyer, the purchase may be covered by the United Nations Convention on International Purchases of 1980. (Convention on Contracts for the International Sale of Goods) (CISG). The Convention, drawn up under the auspices of the United Nations Committee on International Trade Law (UNCITRAL), entered into force in Denmark on 1 March 1990.
The aim of the CISG has been to implement, as far as possible, uniform rules for buying and selling in international trade relations worldwide. In this way, the uncertainty that may be associated with sales contracts being treated under one country’s sales law or under another country’s purchasing rights can be significantly reduced. In order to avoid this uncertainty, the parties have so far often chosen to agree on which country’s sales law should be taken into account in any legal proceedings between them.
Such conflict-of-law and conflict-of-law rules will continue to be necessary, in particular because the CISG does not cover all contract and sales law issues and therefore has some thresholds that national law typically has to fill. For example, the CISG does not have rules on unfair contract terms.
The CISG is in force in 91 countries, including virtually all EU Member States as well as, among others, the United States, Russia, Japan, Brazil, and China.
The Nordic countries, upon accession to the CISG, took in accordance with the nature of the Convention 94 reservation that the CISG shall not apply to purchases entered into between parties with establishments in Denmark, Finland, Sweden, Norway and Iceland. In intra-Nordic purchases, therefore, the national sales laws apply, that is if Danish law is to apply despite the fact that the conditions for the use of the CISG are met. The reservation to exclude the use of the CISG in sales agreements between the Nordic countries, even though the parties have a place of business in different Nordic countries, was originally motivated by the great similarity of the purchasing laws in these countries. Since then, the preconditions underlying the opt-out have disappeared. In the years 1987-1990, Norway, Sweden and Finland received completely new domestic purchasing laws that richly reflect the provisions of the CISG.
Due to the declaratory nature of the CISG, the parties may also derogate from or modify the individual rules of the CISG. For international traders, the declaratory nature of the CISG is of great importance because it allows companies to agree on a different solution than that provided for in the CISG.