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19.1. Generally, about overriding of agreements in Danish law

19.1.1.Contracts are generally valid

The fundamental principle in Danish contract law is that contracts/agreements are valid. The Roman law principle about agreements (“pacta sunt servandi”) has been codified in Danish law from the first written law from 1241, and it is currently codified in Section 1 of the Danish Act on Contracts which briefly states that “Offers and replies to offers are binding on the issuer”. The principle about contracts being valid and binding is so solidly grounded that even verbal agreements are considered to be valid and binding according to Danish law (if the existence and content of such an agreement can be proven).

While Danish law does not allow for more formal objections considering the validity of a contract than what is known from the requirements of the Anglo-Saxon legal system about “signed, sealed & delivered”, it is, however, possible according to Danish law to declare a promise for invalid due to circumstances relating to the establishment of the contract or because the contract, according to its content, appears to be unreasonable, possibly taking into account possible following circumstances. There are also case-law examples that courts (and VBA) supplement a contract that does not rule on a dispute that has arisen through completion.

19.2. Overall information about the possibilities for amending or changing an agreement

19.2.. Statutory invalidity rules

As mentioned, the clear starting point is that a contract or agreement is valid. According to Danish law, courts or arbitration institutes are generally very reluctant to declare promises invalid. As professor Mads Bryde Andersen, Doctor of Laws, writes in the 4th edition of “The Basic Contract Law” (from 2013, page 355): 

“It goes without saying that very strong demands must be made on the legal basis that must justify the invalidity of a promise or an agreement. The promise and the agreement are “the law of the parties”. The parties must have confidence in this legal basis. Every time you allow objections to invalidity, you reduce that trust. The starting point is hence that it requires legal authority to declare a promise invalid.” (My translation). The general rules of law can be found in chapter 3 of the Danish Act on Contracts, including on coercion, fraud and general dishonesty. Within certain legal disciplines, special statutory invalidity rules apply, but this is not the case for construction law.

19.2.2. The case-law-created presupposition doctrine

In addition to legal rules on invalidity, it has been recognised in both legal theory and case-law that things can subsequently develop in a way where the original preconditions for entering into an agreement are breached. Mads Bryde Andersen further writes on page 356, that “If it can be established that the will that moved the promisor to make a promise has lapsed for reasons which the promisor should not have foreseen or should not reasonably bear the risk of, the courts have, on a general basis, developed an invalidity rule allowing the promisor to be released from the contract. This presupposition doctrine applies with (at least) the same force as the general invalidity rules.” Other authors also recognise the doctrine of preconditions on an equal footing with the statutory invalidity rules. See e.g. professors Ole Hansen and Vibe Ulfbeck: “Textbook on Contract Law”, 1st edition, page 91: “Contracts can be set aside as invalid, also without direct authority from a law. Important rules about invalidity exist that do not appear in or from the legislation but which have been developed in detail from case-law.”   

When Mads Bryde Andersen writes that the presupposition doctrine applies with at least the same force as the statutory invalidity rules, it probably expresses that the doctrine of presupposition is presenting a sort of “safety valve” which allows the courts to reach reasonable decisions and that the doctrine of presupposition as a product of case-law does not have the more rigid rules of form attached to it. 

19.2.3. Interpretation and supplementing

Although the invalidity of promises in principle has nothing to do with the doctrine about interpretation of contracts, there are gradual transitions. In some court cases, it can be difficult to tell whether an agreement does not have the intended legal effects due to invalidity, restrictive interpretation or failure of preconditions. In addition, there is a connection up to the contract law discipline filling in – the supplementing of agreements addressing the issues that the agreement has not sought to resolve. The alternative to supplementing a matter not catered for by the agreement would thus be to consider the agreement invalid/lapsed due to breached preconditions in its entirety. In the acknowledged and acclaimed work “Agreements and Intermediaries”, 7th edition from 2017, Lennart Lynge Andersen and Palle Bo Madsen write that: “The adoption, interpretation and invalidity questions are all just a part of “The legal technique” used by the courts to avoid unreasonable terms”. The authors refer to a number of previous works that state the same conclusion.

19.2.4. The function of the rules, and the breaking considerations

Ole Hansen and Vibe Ulfbeck state on page 92 that: “Although the invalidity rules can be regarded as a restriction to the freedom of contract, they support the fundamental right of the contract law to the individual’s free will, to the recipient’s trust in the declaration and to society’s demands for fair and just contractual practices, including especially the protection of weak contract partners.” The authors further state that: “The greater the values at stake, the more complex and the more special the contracted service is, the more the contract partners’ focus along the way will generally shift from compliance with the exact wording of the contract to executing the transaction as a whole. In particular, the content-oriented invalidity rules of modern contract law which, to a large extent, involve taking subsequent circumstances into account directly or indirectly – a basis for the parties in the specific, contractual relationship to be able to adjust or adapt an agreement, if the circumstances change radically.” The principle that the contract is valid as a starting point thus leads precisely to an effort to reach a solution that does not lead to invalidity but that can ensure that the contract can be maintained – if necessary, with modifications. See also “Agreements and Intermediaries”, page 395, and “Basic Contract Law”, page 338. It is commonly acknowledged that the aforementioned basic contract principle that contracts are valid leads to a preference for achieving a result that leads to maintaining the contract.