NB: Unofficial translation©Ministry of Justice, Finland

Consumer Protection Act(38/1978; amendments up to 29/2005 included)

Chapter 1 — General provisions
Section 1(1)

This Act applies to the offering, selling and other marketing of consumer goods
and services by businesses to consumers. The Act applies also where a businessacts as an intermediary in the transfer of goods or services to consumers.

(2)

This Act does not apply to statutory insurance, group life assurance of
employees, or corresponding benefits granted by a municipal insurance
institution.

Section 2
The provisions of this Act on sales apply also to barter.
Section 2a (29/2005)
The provisions laid down in chapters 3, 4 and 6a and provisions laid down on
door-to-door selling in chapter 6 of this Act apply, where appropriate, to thecommitments of a private guarantor and pledgor to a creditor as referred to in
the Act on Guaranties and Third-Party Pledges (361/1999).
Section 3 (16/1994)
For the purposes of this Act, consumer goods and services are defined as goods,
services and other merchandise and benefits that are offered to natural persons
or which such persons acquire, to an essential extent, for their privatehouseholds.
Section 4 (16/1994)
For the purposes of this Act, consumer is defined a natural person who acquires
consumer goods and services primarily for a use other than business or trade.

Section 5 (16/1994)
For the purposes of this Act, business is defined as a natural person or a private
or public legal person who, in order to obtain income or other economic benefit,
deals in, sells or otherwise offers consumer goods or services on a professional
basis and for consideration.
Section 6 has been repealed.

Chapter 2 — Regulation of marketing
Section 1(1)

No conduct that is inappropriate or otherwise unfair from the point of view ofconsumers shall be allowed in marketing.

(2)

Marketing that does not convey information necessary in respect of the health or
economic security of consumers shall always be deemed unfair.

Section 1a (460/2002)
Marketing must clearly show its commercial purpose and on whose behalf
marketing is implemented.
Section 2
False or misleading information shall not be conveyed in marketing.
Section 2a (1072/2000)
Consumer goods or services shall not be marketed by delivering them toconsumers without an express order and by requiring that the consumer pays forthem, returns them, safekeeps them or undertakes other measures in respect ofthem.
Section 3
The price of consumer goods or services shall not be advertised as being reducedby more than it actually is below the price previously charged by the business.
Section 4 (1072/2000)
If several consumer goods or services are being marketed at one price or so thatthe purchase of a good or service entitles one to another good or service at a2

reduced price or to another specific benefit, the following information shall beclearly noted in the marketing:(1)

the content and value of the offer and, for goods and services marketed at
one price, their individual prices, unless the individual price of a good orservice is less than EUR 10;(2)

the conditions of the offer, especially its duration and the volume
restrictions and other restrictions applying to it.

Section 4a (1072/2000)(1)

For the purposes of this section, comparative advertising is defined as advertisingwhere a competitor or a good or service marketed by a competitor can be directly
or indirectly recognised.

(2)

Comparative advertising shall be allowed, in so far as concerns the comparison,provided that:(1)

it is not false or misleading;(2)

it pertains to goods or services that are used for the same purpose or for thefulfilment of the same need;(3)

the comparison is impartial and pertains to essential, significant, verifiable
and representative characteristics of the goods or services, or to the price ofthe goods or services;(4)

it does not give rise to a danger of confusing the advertiser and thecompetitor, their trademarks, trade names, other distinguishing marks or
goods and services;(5)

it does not belittle or dishonour the competitor’s trademark, trade name,other distinguishing mark, good or service, operations or circumstances;(6)

it does not take unfair advantage of the reputation of the competitor’s
trademark, trade name or other distinguishing mark, nor of the original
appellation of the good or service marketed by the competitor;(7)

it does not represent a good or service as a copy or reproduction of anothergood or service protected by a trademark.

(3)

In so far as does not concern the comparison, comparative advertising shall be
subject to the provisions elsewhere in the law on advertising and othermarketing.

3Section 4b (460/2002)
If marketing includes raffles, competitions for the public or games, the conditions
on participating in them must be clear and easy to understand as well as readily
accessible.
Section 5(1)

No benefit based on chance shall be promised in marketing if the obtaining ofsuch benefit presupposes consideration, the purchase of consumer goods orservices or the making of a purchase offer.

(2)

The provision in paragraph (1) does not apply to ordinary recreational
competitions in newspapers and magazines.

Section 6
Necessary provisions regarding the following may be issued by Decree:(1)

the attachment of labels or instructions to consumer goods, or the provisionof other information on the quality, characteristics and use of consumer
goods or services in marketing;(2)

the quotation of the price of consumer goods and services and of credit
terms as well as of other contract terms in marketing; and(3)

the arrangement of consumer competitions in connection with marketingand the maximum value of prizes or benefits to be given without
consideration in marketing.

Section 7(1)

If deemed necessary in respect of consumer protection, an injunction may be
issued against a business ordering or carrying out a marketing operation,
forbidding it to continue marketing in violation of the provisions of this chapter
or of provisions or regulations issued on the basis thereof, or forbidding it torepeat such or comparable marketing. The injunction shall be reinforced by athreat of a fine unless this is for a specific reason deemed unnecessary.

(2)

Should there be special cause, the injunction may also be directed against aperson in the employ of the business referred to in paragraph (1) or against
another person acting on its behalf.

4Section 8(1)

An injunction referred to in section 7 shall be issued by the Market Court. The
Market Court may also issue an interim injunction, in which case the injunction
shall remain in force until the case has been finally decided. (1547/2001)(2)

The Consumer Ombudsman may issue an injunction or interim injunctionreferred to in section 7, as provided in the Consumer Ombudsman Act(40/1978).

Section 8a (37/1995)(1)

An injunction referred to in section 7 may be issued by the State Provincial Office
in a matter relating to a violation of the Decree on the Quotation of the Price ofConsumer Goods and Services in Marketing (9/1989), the provisions issued
thereunder, or the Decree on the Information to be Provided in the Marketing ofResidences (847/1983), if the conduct in question is evidently against theprovisions and if the application practice of the provisions in the matter inquestion is established. The decision of the State Provincial Office shall not be
subject to appeal.

(2)

The business may refer an injunction referred to in paragraph (1) to the Market
Court within fourteen days of being served with the decision of the State
Provincial Office. Otherwise the decision shall be final. (1547/2001)(3)

The State Provincial Office may reinforce its injunction issued by the threat of afine. The fine shall be enforced by the Market Court. (1547/2001)(4)

Before the State Provincial Office issues an injunction referred to in paragraph(1), it shall reserve the business an opportunity to be heard.

(5)

When issuing an injunction referred to in paragraph (1), the State Provincial
Office shall make its decision in writing and see to its service on the parties.

Section 9 (1547/2001)
When issuing an injunction referred to in section 7, the Market Court may oblige
the business on whom the injunction was imposed or who ordered or carried out
the marketing operation to rectify the marketing operation within a set period,
where this is deemed necessary because of the evident harm caused toconsumers thereby. The obligation may be reinforced by the threat of a fine.

5Section 10(1)

The Consumer Ombudsman shall supervise the lawfulness of marketing with inrespect of consumer protection.

(2)

The quotation of the price of a consumer good or service in marketing shall, in
addition to the Consumer Ombudsman, be supervised by the National Board ofTrade and, as district administrative authorities subject to the National Board ofTrade, the State Provincial Offices. (8/1989)(3)

In other respects, the Market Court and the procedure therein shall be governedby the provisions of the Market Court Act (1527/2001) and the Act on Certain
Proceedings before the Market Court (1528/2001). (1547/2001)

Section 11 has been repealed.
Section 12 (8/1989)(1)

The National Board of Trade may be authorised, by Decree, to grant, for special
reasons, dispensations from the provisions of the Decree issued under section 6on the quotation of the price of a consumer good or service in marketing.

(2)

The National Board of Trade may be authorised, by Decree, to issue orders on thequotation of the unit price of a consumer good or of a group of consumer goods
in marketing.

Section 13 has been repealed.

Chapter 3 — Regulation of contract terms
Section 1(1)

A business offering consumer goods or services shall not make use of a contract
term which, considering the price of the good or service and the other relevant
circumstances, is to be deemed unfair from the point of view of consumers.

(2)

If an association of businesses draws up contract terms for contracts relating toconsumer goods or services or issues recommendations or instructions on theterms and conditions to be used, the association shall ensure that its conduct
does not result in the use of terms that are unfair from the point of view ofconsumers. (1259/1994)

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Section 2(1)

Where necessary in respect of consumer protection, a business may be enjoinedfrom continuing the use of a contract term contrary to section 1(1) or repeating
the use of such a term or a comparable term. An association of businesses may
correspondingly be enjoined from continuing or repeating conduct contrary tosection 1(2). The injunction shall be reinforced by the threat of a fine unless thisis for a specific reason deemed unnecessary. (1259/1994)(2)

Should there be special cause, the injunction may also be directed against an
employee of a business referred to in paragraph (1) or against a person acting on
its behalf.

Section 3(1)

An injunction referred to in section 2 shall be issued by the Market Court. The
Market Court may also issue an interim injunction, in which case the injunction
shall remain in force until the case has been finally decided. (1547/2001)(2)

The Consumer Ombudsman may issue an injunction or interim injunctionreferred to in section 2, as provided in the Act on the Consumer Agency(1056/1998). (1547/2001)

Section 4(1)

The Consumer Ombudsman shall supervise the use of contract terms in respectof consumer protection.

(2)

In other respects, the Market Court and the procedure therein shall be governedby the provisions of the Market Court Act and the Act on Certain Proceedings
before the Market Court. (1547/2001)

Chapter 4 — Adjustment and interpretation of a contract(1259/1994)
Section 1 (1259/1994)(1)

If a term in a contract referred to in this Act is unreasonable from the point ofview of the consumer or if an unreasonable result would ensue from its
application, the term may be adjusted or it may be disregarded. Also a
commitment as to consideration shall be deemed a contract term. In theassessment of unreasonableness, due note shall be taken of the contract as a7whole, of the positions of the parties, of the circumstances under which thecontract was concluded and, unless otherwise follows from section 2, of thechanges in circumstances, as well as of other relevant points. (1072/2000)(2)

If a contract term referred to in paragraph (1) is of such nature that it cannot
reasonably be required that the rest of the contract remain in force unalteredafter the adjustment of the term, the contract may, unless otherwise provided in
section 2, be adjusted also in other respects or be ordered to lapse.

Section 2 (1259/1994)(1)

If a contract term referred to in section 1 has been drafted in advance without
the consumer having been able to influence its contents, section 1 shall beapplied in compliance with the restrictions provided in this section.

(2)

If a term has been unreasonable under the circumstances at the conclusion of
the contract, a change of circumstances shall not be taken note of, to thedetriment of the consumer, in any later assessment of the unreasonableness ofthe term.

(3)

If the adjustment or disregard of a term relates to a contract term which,contrary to good practice, will lead to a significant imbalance in the rights andobligations of the parties to the detriment of the consumer, the other terms of thecontract shall not be adjusted. In this case, the contract shall, in other respects,
remain in force unchanged if it can be retained in force as such.

Section 3 (1259/1994)
If a term in a contract referred to in this Act has been drafted in advance without
the consumer having been able to influence its contents and if uncertainty arises
as to the significance of the term, the term shall be interpreted in favour of theconsumer.
Section 4 (1259/1994)
Should a dispute arise as to whether a term referred to in sections 2 and 3 hasbeen drafted in advance, the burden of proof on this shall lay on the business.
Section 5 (416/1999)
A choice-of-law term according to which the contract is subject to the law of astate outside the European Economic Area shall not prevail over the provisions ofa member state of the European Economic Area on unreasonable contract terms,

8applicable but for the term in question, if the provisions offer a more effective
protection of consumers against unreasonable contract terms than does the lawthat would be applied on the basis of the choice-of-law term.

Chapter 5 — Sale of consumer goods (16/1994)
General provisions on the sale of consumer goods
Section 1 — Scope of application of the chapter (1258/2001)(1)

The provisions of this chapter apply to sale of goods where the seller is abusiness and the buyer is a consumer.

(2)

The provisions of this chapter apply likewise to orders of goods to be
manufactured. If the buyer is to supply an essential proportion of the materials,
the order shall, however, not be governed by the provisions in sections 23—28 ofthis chapter but, instead, by the respective provisions in chapter 8, sections 23—
31. In addition, such an order shall be governed by the provisions in chapter 8,
sections 14 and 32.

(3)

The provisions of this chapter do not apply where used goods are sold by auction,
if the buyer can participate in the auction in person.

Section 2 — Mandatory provisions (16/1994)
A contract term differing from the provisions of this chapter to the detriment of
the buyer shall be void unless otherwise provided below.

Delivery and risk
Section 3 — Delivery (16/1994)(1)

Unless otherwise agreed, the goods shall be held available to the buyer at theplace where the seller had its place of business at the time of the conclusion of
the contract. If the seller did not have a place of business relevant to the sale andif it has not been otherwise agreed, the seller shall send or transport the goods tothe buyer.

(2)

The goods shall be deemed delivered when the buyer gains possession of thegoods.

(3)

However, if the goods are to be installed or assembled by the seller at the buyer’s
premises, they shall not, for purposes of the provisions on delay by the seller, bedeemed delivered until the seller has fulfilled the said obligation.

9Section 4 — Time of delivery (16/1994)(1)

Unless it has been agreed that the goods are to be delivered at a fixed time orupon demand or without delay, the goods shall be delivered within a reasonable
time after the conclusion of the contract.

(2)

Unless the buyer is granted credit or a postponement in making payment, theseller shall not be under any obligation to relinquish possession of the goods
until the buyer pays the purchase price.

Section 5 — Costs incurred for the goods before delivery (16/1994)
Unless otherwise agreed, the seller shall be responsible for transport costs andother costs incurred for the goods before their delivery. However, this does not
apply to costs incurred because the delivery has been delayed owing to a reason
attributable to the buyer.
Section 6 — Transfer of risk (16/1994)(1)

The seller shall bear the risk of the goods being destroyed or lost, deteriorating or
diminishing before delivery, owing to a reason not attributable to the buyer. If thebuyer fails in time to fetch or take delivery of goods held available to him/her, thebuyer shall, however, bear the risk of the goods deteriorating owing to theirinherent characteristics after the seller has completed its obligations relating to
the delivery.

(2)

If the goods, due to a notice of defect by the buyer, are returned to the seller for
inspection or a remedy of the defect, the seller shall bear the risk for the goods
until the goods have been redelivered to the buyer.

(3)

If a provisional sale has been made and the goods have been delivered, the buyer
shall bear the risk for the goods until the goods have been returned to thepossession of the seller.

(4)

If the buyer bears the risk and the goods are destroyed or lost, deteriorate or
diminish owing to a reason not attributable to the seller, the buyer shall,nevertheless, pay the purchase price.

Sanctions for delay in the delivery of the goods
Section 7 — Right to withhold payment (16/1994)
If the seller is in delay, the buyer shall have the right to withhold payment of thepurchase price. The buyer shall, however, not have the right to withhold an

10amount that evidently exceeds the claims that he/she is entitled to on the basisof the delay.
Section 8 — Right to demand fulfilment of the contract (16/1994)(1)

If the delivery of the goods is delayed, the buyer has the right to require
performance from the seller. The seller shall, however, not be liable to fulfil thecontract in the event of force majeure or if the performance would require sacrifices that are disproportionate to the buyer’s interest in the performance.

(2)

If the force majeure event or the disproportion cease to exist within a reasonable
time, the buyer may, nevertheless, require performance from the seller.

(3)

The buyer shall forfeit the right to require performance if he/she delays therequirement for an unreasonably long time.

Section 9 — Cancellation of the contract (16/1994)(1)

The buyer may cancel the contract on account of the seller’s delay if the breachof contract is essential.

(2)

If the buyer has granted the seller an extension for the delivery of the goods andthe extension is not unreasonably short, the buyer shall also be entitled to cancel
the contract if the goods are not then delivered in time. During the extension, thebuyer may cancel the contract only if the seller makes it known that it will not
perform the contract in time.

(3)

If the buyer has not granted an extension to the seller, he/she may cancel thecontract if the goods are not delivered within a reasonable time from his
requirement of performance.

(4)

Where the contract is for the supply of goods to be manufactured or acquired
specially for the buyer in accordance with his instructions or wishes and theseller cannot, without considerable loss, make other use of the goods, the buyer
may cancel the contract on account of the seller’s delay only if the delay causes,
as for the buyer, an essential failure in the purpose of the sale.

Section 10 — Compensation (16/1994)(1)

The buyer shall be entitled to compensation for the loss that he/she suffers
because of the seller’s delay, unless the seller proves that the delay was due toan impediment, beyond its control, which it could not reasonably be expected to11have taken into account at the conclusion of the contract and whose
consequences it could not reasonably have avoided or overcome.
(2)

If the delay is due to a third person whom the seller has engaged to perform all orpart of the contract, the seller shall be released from liability only if that third
person would also be released from liability under paragraph (1). The sameprovision applies if the delay is due to a contractor of the seller or someone else
at a previous level in the supply chain.

(3)

The seller shall, however, be liable to compensate the buyer for indirect loss only
if the delay or the loss is due to negligence attributable to it. Indirect loss shall
include:(1)

loss of income suffered by the buyer due to the breach of contract ormeasures arising from the same;(2)

loss incurred through obligations based on another contract, and(3)essential loss of the use of the product, not resulting in direct economic
loss, as well as other comparable detriment, if essential.

(4)

However, if a loss referred to in paragraph 3(1)–(3) is incurred through the
mitigation of another type of loss, it shall not, for that part, be consideredindirect loss.

(5)

A member of the buyer’s family who suffers loss due to the delay shall have thesame right to compensation as the buyer himself/herself.

Section 11 — Notice of cancellation and claim for compensation (16/1994)
If the goods have been delivered in delay, the buyer shall not be entitled to cancel
the contract nor to claim compensation for the delay unless he/she notifies theseller or the sales agent, within a reasonable time from the delivery of the goods,that he/she wishes to cancel the contract or to claim compensation. However, if
the buyer cancels the contract, he/she need not make a separate notification of aclaim for compensation.

Characteristics of the goods and defects
Section 12 — General provision on defects (16/1994)(1)

In type, quantity, quality, other characteristics and packaging, the goods shallcorrespond to what can be deemed to have been agreed.

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(2)

Except where something else can be deemed to have been agreed, the goods
shall:(1)

be fit for the purpose for which such goods are ordinarily used;(2)

conform to the particular purpose for which the goods were intended, if theseller must have known of this purpose at the conclusion of the sale and if
the seller had not before the conclusion of the sale informed the buyer thatthe goods possibly do not conform to the intended purpose; (1258/2001)(3)

conform to what has been represented by the seller and possess thecharacteristics which the seller has implied by way of a sample or model;(1258/2001)(4)

be packaged in a manner that is usual or otherwise appropriate, if
packaging is necessary to preserve or protect the goods; as well as(5)

as to durability and otherwise, correspond to what a consumer ordinarily
may expect in the purchase of such goods.

(3)

The goods shall in their characteristics conform to the requirements set by law,decree or official decision, unless the buyer intended to use the goods for a purpose where the said requirement is of no significance.

(4)

If the goods do not conform to the provisions of paragraphs (1)–(3), they are
defective. However, the buyer shall not invoke as a defect any circumstances thatthe buyer must have known of at the conclusion of the sale. In addition, thebuyer shall not invoke as a defect any circumstances arising from the materials
that the buyer has supplied for the manufacture of the goods, except if there has
been negligence on the part of the seller. (1258/2001)

Section 12a — Defect arising from installation or lack of instructions (1258/2001)(1)

If the installation or assembly of the goods is included in the contract of sale andif the goods have been installed by the seller or by someone else on the behalf ofthe seller, the goods shall likewise be defective if they do not conform, owing toerroneous installation or assembly, to what has been provided in section 12.

(2)

The goods shall likewise be defective if they are not delivered complete with such
instructions that are necessary for the buyer for the installation, assembly, use,maintenance or storage of the goods.

13Section 13 — Information on the goods (1258/2001)(1)

The goods are defective also if they do not conform to the information given by
the seller or by a person other than the seller either at a previous level of the
supply chain or on behalf of the seller on the characteristics or the use of thegoods when marketing the goods or otherwise before the conclusion of the sale.

(2)

However, the seller shall not be liable for a defect referred to in paragraph (1), if
the seller proves that:(1)

the seller was not aware and should not have been aware of the information
given;(2)

the information cannot have had an effect on the sale; or(3)

the information has been clearly corrected in time.

Section 14 —“As is“ clause (16/1994)
If the goods have been sold subject to an “as is“ clause or a similar generalreservation, the goods shall, nevertheless, be considered defective if:(1)

the goods do not conform to information on the characteristics or use of thegoods which was given by the seller before the conclusion of the contract
and which can be presumed to have had an effect on the contract;(2)

the seller has, before the conclusion of the contract, failed to disclose to thebuyer relevant information on the characteristics or use of the goods which
the seller could not have been unaware of and which the buyer could
reasonably expect to be informed about, provided that the failure can bepresumed to have had an effect on the contract; or if(3)

the goods are in a poorer condition than the buyer reasonably could expect,taking the price and the other circumstances into account. (1258/2001)

Section 15 — Relevant time for defectiveness (1258/2001)(1)

The defectiveness of the goods shall be determined with regard to theircharacteristics at the time when the risk passes to the buyer. The seller shall be
liable for any defect that existed at that time even if it appeared only later.

(2)

The defect shall be deemed to have existed at the time when the risk passed tothe buyer if it appears within six months of that time, unless the contrary is
proven or unless the assumption is incompatible with the nature of the defect or
the goods.

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(3)

If the goods deteriorate after the risk has passed to the buyer, the goods shall beconsidered defective if the deterioration was due to a breach of contract by theseller.

Section 15a — Significance of warranty (1258/2001)(1)

If the seller has assumed liability for the fitness or other characteristics of thegoods for a fixed period (warranty), the goods shall be deemed defective if they
deteriorate during this period as referred to in the warranty. Liability for thedefect shall, however, not arise if the seller makes it likely that the deterioration
was due to an accident, the inappropriate handling of the goods or anothercircumstance attributable to the buyer.

(2)

If the warranty was given by a person other than the seller, either at a previous
level of the supply chain or on behalf of the seller, the goods shall also be
considered defective under the conditions referred to in paragraph (1). The seller
shall, however, not be liable for a warranty given by a previous level of the supply
chain for a defect that he would not otherwise be liable for under this chapter, if
the seller shows that it has clearly notified the buyer of the same before theconclusion of the sale.

(4)

A warranty shall not limit the liability for defects provided for in this Act.

Section 15b — Warranty information (1258/2001)(1)

The warranty shall clearly indicate the following information:(1)

the contents of the warranty and the fact that the buyer has statutory
rights and that the warranty does not restrict these rights; and(2)

the party giving the warranty, its period and area of validity and the otherinformation necessary for the filing of claims under the warranty.

(2)

On the request of the buyer, the warranty shall be given in writing or inelectronic form so that the information cannot be unilaterally altered and that itremains accessible to the buyer.

(3)

The buyer is entitled to invoke the warranty even if it does not meet therequirements laid down in this section.

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Sanctions for a defectSection 16 — Notice of defect (16/1994)(1)

The buyer shall not invoke a defect in the goods if he/she does not notify theseller of the same within a reasonable time after he/she discovered or ought tohave discovered the defect. However, the notice of defect may always be given
within two months of the buyer’s discovery of the defect; it may also be given to
the business who has sold the goods on behalf of the seller or assumed liability
for the characteristics of the goods. (1258/2001)(2)

Irrespective of the provisions of paragraph (1), the buyer shall have the right toinvoke a defects in the goods if:(1)

the seller’s conduct has been grossly negligent or incompatible to honour
and good faith;(2)

the defect is based on the fact that the goods do not conform to therequirements set in the Product Safety Act (914/1986) or in otherprovisions or orders issued for the protection of health or property; or if(3)

the defect is based on the fact that the goods are otherwise hazardous tohealth or property.

Section 17 — Right to withhold payment (16/1994)
For a defect, the buyer shall have the right to withhold payment of the purchaseprice. The buyer shall, however, not have the right to withhold an amount that
evidently exceeds the claims that he is entitled to on the basis of the defect.
Section 18 — Rectification (16/1994)(1)

The buyer has the right to require that the seller rectify the defect or deliver nondefective goods. Such rectification shall be performed within a reasonable timeand so that the buyer does not thereby incur costs or significant inconvenience.
However, the seller shall not be liable to rectify the defect if there is anunavoidable barrier to the same or if this would cause unreasonable costs. In
this context, special attention shall be paid to the significance of the defect andthe value of the goods, had these conformed to the contract, and to the issue
whether the rectification can be performed in some other manner withoutcausing significant inconvenience to the buyer. (1258/2001)

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(2)

Even if the buyer does not require that the defect be rectified or that nondefective goods be delivered, the seller shall, at its own expense, have the right toperform such rectification if it offers to do so without delay after the buyer has
notified it of the defect. The buyer shall have the right to refuse rectification of
the defect if that would cause him/her essential inconvenience, a decrease in thevalue of the goods or a danger that the costs incurred by the buyer not becompensated, or if he/she has another special reason for refusal.

(3)

The seller shall not invoke the fact that it did not have a chance to rectify thedefect referred to in paragraph (2) if the buyer has had the defect rectified and if,
considering the circumstances, it cannot reasonably be expected that the buyer
would have waited for the seller’s rectification.

Section 19 — Reduction of price and cancellation of contract (1258/2001)
If the rectification of the defect or the delivery of non-defective goods is out of thequestion or if it has not been performed as referred to in section 18, the buyer
shall have the right to:(1)

demand a price reduction proportionate to the defect; or(2)cancel the contract, except if the defect is of minor significance.

Section 20 — Compensation (16/1994)(1)

The buyer shall be entitled to compensation for loss that he/she suffers becauseof a defect in the goods. Indirect loss, referred to above in section 10(3) and (4)shall, however, be compensated by the seller only if the defect or loss is due tonegligence attributable to it or if, at the conclusion of the contract, the goods
differed from an express representation of the seller.

(2)

A member of the buyer’s family who suffers loss for the defect shall have thesame right to compensation as the buyer himself/herself.

Section 21 — Property damage (16/1994)(1)

If a defect of the goods causes damage to property other than the goods that were
sold, the provisions of section 20 shall apply to the liability of the seller only if
the damage is caused to property with a direct connection of use to the goods
sold.

(2)

If the seller pays compensation by virtue of paragraph (1), the right of thebeneficiary, if any, to demand compensation on the basis of the Product Liability

17

Act (694/1990) shall be transferred, for the corresponding amount, to the seller.
The provisions of section 10 of the Product Liability Act applies also to the seller’s
right to compensation.
(3)

The provisions of this chapter do not apply to personal injury caused by thecharacteristics of the goods.

Section 22 — Liability of third parties (16/1994)(1)

If the goods are defective in the manner referred to in section 13(1), the liability ofthe person giving the information to compensate the buyer for any loss caused by
the defect shall be governed by the provisions laid down on the seller’s liability
above. (391/2002)(2)

If someone other than the seller has undertaken to rectify a defect in the goods orotherwise to assume liability for the characteristics of the goods, the liability ofthe promissor to compensate the buyer for any loss incurred through a breach of
the promise shall correspondingly be governed by the provisions of the seller’s
liability above.

Buyer’s obligations and sanctions for buyer’s breach of contract
Section 23 — Purchase price (16/1994)
If no price for the goods can be deemed to have been agreed, the buyer shall pay
a price which is reasonable taking into account the quality and characteristics ofthe goods, the going price at the conclusion of the contract, as well as the othercircumstances. If the seller, when marketing the goods, has given information on
the price of the goods or the manner of the calculation of the price relating to theprice levels at the conclusion of the contract, and this can be presumed to have
had an effect on the contract, the price shall be determined in accordance with
the information given.
Section 24 — Time of payment (16/1994)(1)

Unless otherwise agreed, the seller shall pay the purchase price upon demand of
the seller, but not, however, before the goods are available to him in accordancewith the contract.

(2)

Before the payment of the purchase price, the buyer shall have the right toinspect the goods as is customary or as is appropriate with regard to thecircumstances unless such inspection is not compatible with the agreed mannerof delivery and payment.

18

(3)

If the payment is effected through a bank or the post, the payment shall, when
considering the rights of the seller referred to in sections 26–28, be deemed
effected on the date when the bank or the post has accepted the proper payment
order of the buyer.

Section 25 — Withdrawal of an order (16/1994)
If the buyer breaches the contract by withdrawing the order before the delivery of
the goods, the seller shall not have the right to adhere to the contract and to
demand payment of the purchase price. Instead, the seller shall be entitled tocompensation for any loss he has incurred, in accordance with section 28.
Section 26 — Overdue interest (16/1994)
If the buyer is delayed in paying the purchase price, the seller shall, unless thecontract is withdrawn or cancelled, have the right to overdue interest inaccordance with the Interest Act (633/1982).
Section 27 — Seller’s right to cancel the contract (16/1994)(1)

If the buyer is delayed in the payment of the purchase price, the seller may
cancel the contract if the breach of contract is essential.

(2)

If the seller has granted the buyer an extension for the payment of the purchaseprice and the extension is not unreasonably short, the seller shall also be entitledto cancel the contract if the payment is not then effected in time. During theextension, the seller may cancel the contract only if the buyer makes it known
that he/she will not effect the payment in time.

(3)

If the buyer has gained possession of the goods, the seller may cancel thecontract only if he has reserved the said right in the contract or if the buyer
rejects the goods. The right of the seller to invoke a term to repossess the goods,
in the event that the buyer has been granted credit, is governed by chapter 7.

(4)

The seller shall not cancel the contract due to the buyer’s delay in payment oncethe overdue payment has been made.

Section 28 — Seller’s right to compensation (16/1994)(1)

If the seller cancels the contract due to the buyer’s delay in payment before thebuyer has gained possession of the goods or if the buyer cancels the order for the
goods in accordance with section 25, the seller shall be entitled to compensation
for any special costs that he has incurred due to the conclusion and performance19

of the contract and which are likely to be of no use, as well as for any special
costs incurred due to the cancellation or withdrawal of the contract.
(2)

As for other losses, the seller shall be entitled to a reasonable compensation,
taking into account the price of the goods, the time of cancellation or withdrawalof the contract, the measures undertaken to perform the contract, as well as theother circumstances.

(3)

A contract under which the seller has a right to liquidated damages forwithdrawal or cancellation shall be valid if the liquidated damages arereasonable, taking into account the compensation that the seller would generally
be entitled to under paragraphs (1) and (2).

(4)

The seller shall, however, not be entitled to compensation under this section if
the buyer’s delay in payment or the withdrawal of the order is due to theprovisions of an Act, the interruption of general transport or payment
communications or another similar hindrance which the buyer cannot
reasonably avoid or overcome.

Other provisions on the sale of consumer goods
Section 29 — Application of the Sale of Goods Act (1258/2001)
The provisions of the Sale of Goods Act (355/1987) apply to a sale referred to inthis chapter, unless otherwise provided in this Act. A sale referred to in this Act
shall, however, not be governed by the provisions of sections 13(3), 15, 20(2),20(3), 24, 31, 35, 39(2), 47, 49(3), 57(2), 58, 60, 63(1) and 73(2) of the Sale ofGoods Act. The provisions in sections 19(2) and 37(2) of the Sale of Goods Act do
not apply to an auction within the scope of application of this chapter. The provisions of sections 68 and 69 of the Sale of Goods Act on the right of the seller tocompensation of price difference do not apply to a sale referred to in this chapter.
The provisions of section 76(2) of the Sale of Goods Act do not apply when the
duty of care lies with the buyer. Under sections 75–78 of the Sale of Goods Act,the seller shall not be entitled to compensation that exceeds the compensation
under section 28 of this chapter.
Section 29a — Restriction of choice-of-law clauses in the sale of consumer goods(1258/2001)
A choice-of-law clause according to which the contract is subject to the law of acountry outside the European Economic Area shall not prevail over the rules on20

the sale of consumer goods of a member state of the European Economic Area
that would be applied in the absence of the clause, if the latter rules provide formore effective consumer protection than those of the law referred to in the
choice-of-law clause.
Section 30 — Mitigation of loss and adjustment of compensation (16/1994)(1)

The injured party shall take reasonable measures to mitigate his/her loss.
Failing this, the injured party shall self bear the corresponding part of the loss.

(2)

The amount of compensation payable for a breach of contract may be adjusted if
it is unreasonable taking into account the reason for the breach, the contributory
negligence of the other party to the loss, if any, the financial circumstances of theparties, the price of the goods, the chances of the breaching party to foresee andprevent the damage, as well as the other circumstances.

(3)

The amount of compensation payable by the buyer under section 28 may be
adjusted especially if the delay in payment or the withdrawal of the order is dueto the buyer’s difficulties of liquidity arising from illness, unemployment or
another special reason primarily without his own volition.

Section 31 — Liability for defects of the previous level of the supply chain (16/1994)(1)

The buyer shall have the right to direct his/her claims based on a defect in the
goods, in accordance with the provisions of this chapter, also at a business whoat an earlier level of the supply chain has supplied the goods for resale.

(2)

However, the buyer shall not have the right under paragraph (1):(1)

if the defect has arisen from a reason not attributable to the business inquestion after it delivered the goods;(2)

to the extent that the claim is based on a promise which has been given bysomeone else than the business and which places the buyer in a better
position than he/she would be in under the provisions of this chapter in theabsence of the said promise; nor(3)

to the extent that the claim relates to a price reduction or a refund of thepurchase price and exceeds the amount that the contracting party vis-à-vis
the said business could have claimed on the same grounds, disregarding
any restrictive terms in their contract between the businesses.

(3)

The buyer shall forfeit his right to present claims under paragraph (1), unless henotifies the business of the defect or unless the latter is informed of a notice of21

defect made to a later level in the supply chain within the time referred to in
section 16(1), and the buyer has had access to the necessary information on thebusiness to present the claim. Notwithstanding the provisions of this paragraph,the buyer may invoke a defect if the conduct of the business against whom theclaim is presented has been grossly negligent or incompatible to honour andgood faith or if the defect in question is one referred to in section 16(2)(2) or
16(2)(3). (1258/2001)
Section 32 — Liability for defect of another business (16/1994)
If the seller has enlisted the aid of another business for the performance of thecontract and the performance of the latter is defective, the provisions of chapter
8, section 35 on the right of the commissioner to present claims against abusiness aiding the service provider apply correspondingly to the right of thebuyer to present claims against the business aiding the seller.

Chapter6—

Door-to-door

sellinganddistance

selling(1072/2000)
Section 1 — Scope of application (1072/2000)(1)

The provisions laid down in this chapter govern door-to-door selling and distanceselling of consumer goods and services. The provisions laid down in sections 2, 3,
5, 8—12 and 20—25 apply to door-to-door selling. The provisions laid down insections 2, 4, 6, 7 and 13—25 apply to distance selling.

(2)

The provisions on distance selling of financial services and instruments are laid
down in chapter 6a. (29/2005)

Section 2 — Mandatory provisions (1072/2000)
A contract term derogating from the provisions of this chapter to the detriment of
the consumer shall be void, unless otherwise provided below.
Section 3 — Definition of door-to-door selling (1072/2000)
For the purposes of this chapter, door-to-door selling is defined as the offering of
consumer goods or services for sale to the consumer in person at a place otherthan the premises of the business. However, the offering of consumer goods orservices for sale at the following places does not constitute door-to-door selling:(1)

a place where consumer goods or services are normally offered for sale;

22

(2)

a place, other than a private home, which the business advertises as a place
where consumer goods or services can be obtained, without offeringtransportation to the consumers;(3)

a place where the business arrives upon the express request of theconsumer in order to offer the requested consumer good for sale.

Section 4 — Definition of distance selling (1072/2000)(1)

For the purposes of this chapter, distance selling is defined as the offering of
consumer goods or services for sale to the consumer by way of distance offering,arranged by the business, so that the conclusion of the contract and thepreceding marketing effort are carried out exclusively through one or moremeans of distance communication.

(2)

Distance offering is defined as a method of marketing or selling so arranged thatits primary purpose can be deemed to be the conclusion of contracts through ameans of distance communication.

(3)

Means of distance communication is defined as telephones, post, televisions,information networks or other devices that can be used for the conclusion ofcontracts without the parties being simultaneously present.

Section 5 — Application restrictions in door-to-door selling (391/2002)(1)

The provisions laid down in this chapter on door-to-door selling do not apply to:(1)

a contract relating to the sale or rental of real property;(2)

a contract relating to securities referred to in the Securities Markets Act(495/1989);

(2)

(3)

an insurance contract;(4)

a contract relating to time-share housing referred to in chapter 10.

Moreover, the provisions of this chapter on door-to-door selling do not apply if
the price of the consumer good is less than EUR 15. However, the provisions of
this chapter do apply if several goods are sold at the same time and their total
price is at least EUR 15. This amount may be adjusted by a Government Decree,
if the development of the economy and monetary conditions so warrant.

Section 6 — Application restrictions in distance selling (29/2005)
The provisions of this chapter on distance selling do not apply to:

23

(1)

a contract relating to the sale of real property or to another right to real
property, with the exception of rental;(2)

a contract relating to time-share housing referred to in chapter 10;(3)

a contract concluded by way of a vending machine or in automatedbusiness premises;(4)

a contract concluded with a provider of telecommunications services by wayof a pay-phone;(5)

a contract concluded at an auction, if participation in the auction ispossible also without using a means of distance communication.

Section 7 — Derogations to certain provisions on distance selling (1072/2000)(1)

The provisions in sections 13—15 and 18(1) of this chapter do not apply to
distance selling where(1)

the delivery of foodstuffs, beverages or other everyday items to the home orworkplace of the consumer by way of a regular delivery system;(2)

accommodation, transportation, restaurants or leisure services, if thebusiness at the conclusion of the contract undertakes to perform the service
at a given time or within a given period.

(2)

However, sections 13—15 do apply if the business offers to the consumer goods
or services referred to in paragraph (1) by way of cold calling. The provisions in
those sections apply to distance selling referred to in paragraph (1)(1) also if thecontract concerns continuous or repeated deliveries.

Section 8 — Door-to-door selling document (1072/2000)(1)

In door-to-door selling, the business or its agent shall provide the consumer witha document (door-to-door selling document), which shall be dated and which shallstate the name and address of the business, the consumer goods or services, theprice and the other contract terms. The document shall contain a mention of therights of the consumer under sections 9—11 and 21—25, as well as instructions
for the exercise of said rights. The door-to-door selling document shall conform to
the model approved by the Ministry of Trade and Industry.

(2)

In the sale of tangible goods, the door-to-door selling document shall be given to
the consumer at the latest when the consumer takes delivery of the goods or the
first shipment of goods. In a contract relating to other consumer goods or

24

services, the document shall be given to the consumer at the latest when the
consumer makes an offer or accepts the offer of the business.
Section 9 — Right of withdrawal in door-to-door selling (1072/2000)
In door-to-door selling, the consumer is entitled to withdraw from the contract by
notifying the business of the same within 14 days of receiving the door-to-door
selling document or, in the sale of tangible goods, of taking delivery of the goods
or the first shipment of goods, if the delivery takes place later than the receipt ofthe document. In the sale of tangible goods, the return of delivered goods shallconstitute withdrawal from the contract.
Section 10 — Refund of the price in door-to-door selling (1072/2000)
In door-to-door selling, the business shall refund what has been paid of the pricewithout delay and in any event within 30 days of being notified of the withdrawal.
The consumer is entitled to retain the goods or another retainable performance ofthe business until the price has been refunded.
Section 11 — Keeping and returning performances in door-to-door selling (1072/2000)(1)

In door-to-door selling, if the consumer withdraws from the contract, he/sheshall keep the delivered goods or other returnable performances available to thebusiness at the place where the business delivered the same or a place from
where the business can retrieve the goods or performances without undue
inconvenience. The consumer shall inform the business of the place where thegoods or performances are available. However, it may be stipulated in thecontract terms that goods or performances that have been delivered by post are
to be returned by the consumer by post within a reasonable time.

(2)

The liability of the consumer to keep the goods or performances on behalf of thebusiness shall cease at the latest two months after receipt of the goods or
performance. If the business does not retrieve the goods or performances within
this period, the consumer may keep them without consideration unless this isevidently unreasonable to the business.

(3)

If the consumer returns goods or performances to the business, the businessshall compensate the consumer for the costs of the return.

Section 12 — Door-to-door selling document forms (1072/2000)
The Ministry of Trade and Industry shall see to it that forms conforming to themodel approved by the Ministry by virtue of section 8 are kept available to the25public for a reasonable charge. It shall be indicated on the forms that they
conform to the model approved by the Ministry.
Section 13 — Prior information in distance selling (1072/2000)(1)

In distance selling, the consumer shall be supplied with the following information
well in advance of the conclusion of the contract:(1)

the name and address of the business and its location, if this is not evident
in the address;(2)

the main characteristics of the consumer good or service;(3)

the price, delivery charge and terms of payment on the consumer good orservice;(4)

the other terms of delivery or performance of the contract;(5)

the minimum duration of the contract, if it is about the continuous orrepeated delivery of goods or services;(6)

the costs of the use of the means of distance communication, if theseexceed the basic tariff;(7)

the period of validity of the offer;(8)

the existence of the right of withdrawal under section 15 or the absence ofthe same under section 16(1)(2)—16(1)(7).

(2)

The information referred to in paragraph (1) shall be supplied in a mannersuitable

for

the

means

of

distancecommunication

used,clearly,

comprehensibly and in a manner that makes clear the commercial purpose of
the information. In telephone contacts, the business shall state its name andthe commercial purpose of the call immediately in its beginning.
Section 14 — Confirmation of information in distance selling (1072/2000)(1)

The information referred to in section 13(1)(1)—13(1)(5) shall be confirmed to theconsumer in person in writing or electronically so that the consumer may saveand reproduce the information unchanged. In addition, the confirmation shallcontain:(1)

instructions and information for the exercise of the right of withdrawal
referred to in section 15 and information to the effect that, under section
16(1), withdrawal from the contract is no longer possible once the provision26

of the service has been commenced in accordance with the consent of theconsumer;(2)

the geographical address of the business premises where the consumer may
file complaints;(3)

information on any warranty and the available maintenance and repair
services;(4)

the rules on the termination of the contract, if it has been concluded for thetime being or for a period exceeding one year. (29/2005)(2)

The confirmation shall be delivered as soon as possible after the conclusion of
the contract and, in the sale of tangible goods, at the latest when the goods aredelivered, except where the goods are according to the contract to be delivered toa third party.

(3)

The confirmation need not be delivered, if the information referred to inparagraph (1) has been supplied to the consumer in accordance with thatparagraph already before the conclusion of the contract. Moreover, theconfirmation need not be supplied if a service is provided through a means of
distance communication at a single occasion and if it is billed for by the business
whose distance communication service is being used for the purpose. However,the consumer shall always be informed of the visiting address of the businessproviding the service where the consumer may file complaints.

Section 15 — Right of withdrawal in distance selling (1072/2000)(1)

In distance selling, the consumer is entitled to withdraw from the contract by
notifying the business of the same within 14 days of receiving the confirmationreferred to in section 14 or, in the sale of tangible goods, of the delivery of thegoods or the first shipment of goods, if these are delivered later than theconfirmation. If the confirmation need not be supplied, the withdrawal period
shall be calculated in the sale of tangible goods from the delivery of the goods or
the shipment and in other cases from the conclusion of the contract. In the saleof tangible goods, the return of the delivered goods shall constitute withdrawal
from the contract.

(2)

If the confirmation does not meet the criteria set in section 14, the withdrawal
period shall be three months. If the confirmation is rectified during that period,
the consumer is entitled to withdraw from the contract in accordance withparagraph (1) as from the date when he/she received the rectified confirmation.

27

(2)

If the confirmation is not supplied at all, the provision in section 20 applies.

Section 16 — Restrictions of the right of withdrawal in distance selling (1072/2000)
Unless otherwise agreed, the consumer shall not be entitled to withdraw from thecontract by virtue of section 15, if:(1)

the provision of the service or the delivery of the good electronically has inaccordance with the consent of the consumer commenced before the end of
the withdrawal period and the consumer has been informed of the nonexistence of the right of withdrawal in the confirmation referred to in section
14;

(2)

the price of the good or service depends on financial market quotations
beyond the control of the business;(3)

the contract pertains to goods manufactured or customised to theconsumer’s specifications so that they cannot be resold without incurringconsiderable loss or that they cannot be resold at all;(4)

the contract pertains to goods that by their nature cannot be resold or that
spoil or age rapidly;(5)

the consumer has opened an audio or video recording or computer softwarethat has been delivered sealed;(6)

the contract is for the delivery of newspapers or magazines and thebusiness is not offering these goods to the consumer by way of cold calling;(7)

the contract is for betting or lottery services.

Section 17 — Return of performances in distance selling (1072/2000)(1)

In distance selling, if the consumer withdraws from the contract, he/she shallreturn the delivered goods or other returnable performances to the businesswithin a reasonable time.

(2)

The business shall refund what has been paid of the price without delay and inany event within 30 days of the return of the goods or performances, as well ascompensate the consumer for the costs of the return, if the goods or
performances can be normally returned by post. However, the business shallalways bear the costs of the return of a replacement good, as referred to in
section 18(3). If there is no returnable good or performance, the 30-day period
shall be calculated as from the notification of withdrawal.

28

Section 18 — Performance of the contract in distance selling (1072/2000)(1)

Unless otherwise agreed, the business shall deliver the consumer good within areasonable time and in any event within 30 days of the date when the consumer
has given or sent the offer or acceptance to the business. The time of delivery of agood or service and the sanctions for delay are governed by the provisions inchapters 5, 8 and 9.

(2)

If the business cannot perform the contract because the ordered consumer good
is not available, the business shall inform the consumer of the same without
delay; in any event, within 30 days of the date of offer or acceptance referred toin paragraph (1) or, if the agreed time of delivery is later, at that time, thebusiness shall refund what has been paid of the price.

(3)

Notwithstanding the provision in paragraph (2), the business is entitled to use astandard term of contract under which a replacement good can be delivered tothe consumer, if the ordered good is not available. The replacement good shallcorrespond in purpose to the ordered good, it shall be of the same or better
quality and its price shall not exceed that of the ordered product. In addition,such a contract term shall be clearly indicated in the advance informationreferred to in section 13. If the delivery of the replacement good meets the criteria
set in this paragraph, it shall not be deemed prohibited marketing, as referred toin chapter 2, section 2a.

Section 19 — Restriction of choice-of-law clauses in distance selling (1072/2000)
A choice-of-law clause according to which the contract is subject to the law of acountry outside the European Economic Area shall not preclude the applicationof the distance selling rules of a member state of the European Economic Area
that would be applied in the absence of the clause, if the latter rules provide formore effective consumer protection than those of the law referred to in the
choice-of-law clause.
Section 20 — Failure to provide information (1072/2000)(1)

If the door-to-door selling document or the confirmation referred to in section 14
has not been supplied to the consumer, the contract shall not be binding on
him/her. If the consumer wishes to invoke this non-bindingness, he/she shallnotify the business of the same within one year of the conclusion of the contract.

(2)

If the business supplies the door-to-door selling document or the confirmation
before the consumer has invoked the non-bindingness of the contract, the29consumer shall be entitled to withdraw from the contract, in door-to-door sellingas referred to in section 9 and in distance selling as referred to in section 15, asfrom the receipt of the document or the confirmation.
(3)

If the contract lapses owing to the consumer having invoked its non-bindingness,the business shall without delay and in any event within 30 days of thenotification refund the payments received and compensate the consumer for thecosts of returning the goods or other performances.

Section 21 has been repealed.
Section 22 has been repealed.
Section 23 — Responsibility for delivered performances and compensation for benefit
accrued (1072/2000)(1)

If the consumer has received goods or other returnable performances, he/sheshall keep the goods or performances in an essentially unaltered andundiminished condition in order to retain the right of withdrawal.

(2)

The destruction, spoiling or diminishing of the goods or performances through nofault of the consumer shall not preclude the right to withdraw. The consumer
shall not be responsible for any reduction in value ensuing from the opening of a
package, the inspection of the goods or performances or a comparable reason.

(3)

If, at the withdrawal from or lapse of a contract, the consumer gains the benefitof a non-returnable performance, he/she shall compensate the business for thesame with a reasonable amount.

Section 24 — Termination of a credit agreement (1072/2000)
If, for the conclusion of a contract in door-to-door selling or distance selling, theconsumer has been extended credit by the seller, the service provider or anothercredit provider on the basis of a contract with the seller or the service provider orof another consumer credit scheme, the credit arrangement shall be terminatedwhen the consumer withdraws from the main door-to-door selling or distanceselling contract. The credit agreement shall likewise be terminated if the contract
lapses by virtue of section 20. Upon the termination of the credit agreement, thecreditor shall without delay and in any event within 30 days of being informed of
the withdrawal from or lapse of the main contract refund the payments made by
the consumer.

30Section 25 — Overdue interest (1072/2000)
If a business or creditor liable to refund a price or another payment, has noteffected the refund to the consumer within the time set in section 10, 17, 18,
20 or 24, the consumer shall be entitled to overdue interest in accordancewith the provisions of the Interest Act.

Chapter 6a — Distance selling of financial services andinstruments (29/2005)
Section 1 — Scope of application(1)

This chapter lays down the provisions on distance selling when a business offers

to consumers:(1)

deposit and customer accounts;(2)

payment transaction services;(3)

credits and credit intermediation;(4)

insurance policies and insurance policy intermediation;(5)

units in a fund or other securities to which the Securities Markets Act(495/1989) is applicable;

(2)

(6)

brokerage services or other investment services;(7)

investment advice; or(8)other financial services or instruments.

The provisions of this chapter laid down below on financial services also apply tofinancial instruments.

Section 2 — Application restrictions in certain cases(1)

If a distance selling contract between a business and a consumer comprises
permanent or recurrent undertaking of financial services of the same nature, theprovisions laid down in this chapter shall not apply to individual services
carried out according to the contract.

(2)

If the same contracting parties recurrently agree on financial services of the same
nature, sections 5—11 of this chapter shall only apply to the first contract.
Sections 5—11 shall apply, however, if the previous contract was concluded morethan a year ago.

31

Section 3 — Mandatory provisions
A contract term derogating from the provisions of this chapter to the detriment of
the consumer shall be void.
Section 4 — Definitions(1)

For the purposes of this chapter, distance selling means the provision of financial
services to the consumer with the aid of a distance sales-provision scheme run
by a business in which the conclusion of a contract and the preceding marketing
effort are carried out exclusively through one or more means of distancecommunication.

(2)

Distance offering is defined as a method of marketing or selling so arranged thatits primary purpose may be deemed to be the conclusion of contracts through ameans of distance communication.

(3)

Means of distance communication is defined as telephones, postal services,
televisions, information networks or other instruments which may be used toconclude contracts without the simultaneous physical presence of the parties.

Section 5 — Obligation to provide information prior to the conclusion of a contract
In addition to the provisions to provide information laid down elsewhere in thelaw, the consumer shall be supplied in good time prior to the conclusion of thecontract with information referred to in sections 6—9 concerning the business,
the financial services that are to be provided, the distance selling contract andthe means of redress mechanisms available to the consumer. The information
shall be supplied in a manner suitable for the means of distance communication
used, clearly, comprehensibly and in a manner that makes clear the commercial
purpose of the information.
Section 6 — Prior information concerning the business
At least the following information concerning the business shall be supplied:(1)

the name and main business, the geographical address in the state ofestablishment as well as the geographical address of the premises where
customer relations are handled;(2)

the possible branch office or other representative in the consumer’s countryof residence and the geographical address of the branch office or representative
where customer relations are handled;

32

(3)

the name of the intermediary or agent who works for the business, thegeographical address of the premises where customer relations are handled aswell as information concerning the nature of the business when the consumer
deals with an intermediary or agent;(4)

the trade register or any other corresponding public register where thebusiness may be entered as well as the company or corporation registration
number of the business or any other corresponding means of identification in theregister;(5)

the contact information of a relevant supervisory authority if the activities ofthe business require a licence or registration.
Section 7 — Prior information concerning the financial service
At least the following information concerning the financial service shall be
supplied:(1)

a description of the main characteristics of the financial service;(2)

the total amount of fees, charges and other expenses to be paid by the
consumer, including all taxes, or, when an exact amount cannot be
indicated, the basis for the calculation of the expenses;(3)

a notice of possible capital gains tax, transfer tax and equivalent taxes or
public charges related to the acquired financial services of which thebusiness is aware and which the consumer may be required to pay inaddition to the expenses referred to in paragraph 2, payable to thebusiness;(4)

the arrangements for payment and performance of the contract;(5)

the costs of the use of the means of distance communication, if theseexceed the basic tariff;(6)

where relevant, a notice indicating that the financial service may include arisk of losing the invested funds or other special risk, and a noticeindicating that the prior fluctuation of prices or performance is no indicator
for future performance;(7)

any limitations concerning the period for which the information supplied isvalid.

Section 8 — Prior information concerning the distance selling contract33

At least the following information concerning the distance contract shall be
supplied:(1)

the existence of a right of withdrawal or that such right does not exist
according to law;(2)

the period of withdrawal, the amount of compensation which may becharged from the consumer because of the withdrawal, or, when an exact
amount of compensation cannot be indicated, the basis for the calculationof the compensation, as well as other conditions and instructions
concerning the use of this right;(3)

the minimum duration of the distance contract if the financial services
are to be performed permanently or recurrently;(4)

any right to terminate or cancel the contract or fulfil the contractual
obligations prematurely which are based on law or a contractual term as
well as the consequences of these actions;(5)the state according to whose legislation the information has been provided;(6)

any contractual terms on law applicable to the contract and competentcourt;(7)

in which language or languages the consumer may receive the informationand contractual terms in the manner laid down in section 11, and which
language or languages the business agrees to use during the contractual
relationship.

Section 9 — Prior information concerning the redress mechanisms
At least the following information concerning the redress mechanisms shall be
supplied:(1)

whether or not there are out-of-court redress mechanisms available for the
consumer, and, if so, the methods for having access to them;(2)

the existence of guarantee funds or other compensation arrangements
which are not based on the legislation of the European Community.

Section 10 — Prior information in telephone communications(1)

In telephone communications, the identity of the business, the name of theperson who is calling as well as the commercial purpose of the call shall be madeexplicit at the beginning of any conversation with the consumer.

34

(2)

In telephone communications, the business is not required to disclose all theinformation referred to in sections 6—9 subject to the explicit consent of theconsumer. In this case, the consumer shall be notified that he or she may receive
additional information on request and of what nature this information is.
However, the following information shall always be supplied:(1)

the relationship between the business and the person calling the consumer,
such as whether or not the caller is in the service of the business orwhether the caller is an agent, other representative or an intermediaryworking for the business;(2)

a description of the main characteristics of the financial service;(3)

the total amount of fees, charges and other expenses to be paid by the
consumer, including all taxes, or, when an exact amount cannot be
indicated, the basis for the calculation of the expenses;(4)

a notice of possible capital gains tax, transfer tax and equivalent taxes or
public charges related to the acquired financial services of which thebusiness is aware and which the consumer may be required to pay inaddition to the expenses referred to in paragraph 3, payable to thebusiness;(5)

the existence of a right of withdrawal or that such right does not exist
according to law;(6)

the period of withdrawal, the amount of compensation which may becharged from the consumer because of the withdrawal, or, when an exact
amount of compensation cannot be indicated, the basis for the calculationof the compensation, as well as other conditions and instructions
concerning the use of this right.

Section 11 — Communication of the prior information and of the contractual terms inwriting or in other permanent manner(1)

The prior information and contractual terms shall in good time before thecontract is concluded be notified to the consumer in person in writing orelectronically so that the consumer may save and reproduce the information
unchanged. The same applies to the information which the business is according
to provisions elsewhere in law required to give to the consumer before a contract
concerning financial services is concluded.

35

(2)

If the contract has been concluded at the consumer’s request using a means of
distance communication which does not enable providing the information or thecontractual terms in a permanent manner referred to in subsection 1 before theconclusion of the contract, the information and the contractual terms shall begiven in a permanent manner immediately after the conclusion of the contract.

(3)

At any time during the contractual relationship the consumer is entitled, at hisor her request, to receive the contractual terms on paper.

Section 12 — Right of withdrawal(1)

The consumer shall have the right to withdraw from the contract by notifying thebusiness of this within 14 days after the conclusion of the contract or a later dateon which the consumer received the prior information and the contractual terms
in a permanent manner.

(2)

The provisions laid down in subsection 1 and sections 14—16 on the right towithdraw from the contract shall not apply to consumer credits or insurance
policies. Chapter 7 lays down the provisions on the consumer’s right to withdraw
from a consumer credit agreement and premature payment of consumer credit.
The Insurance Contracts Act (543/1994) lays down the provisions on the right ofa policyholder to withdraw from a contract or cancel a contract.

Section 13 — Cancellation of an additional contract(1)

When the consumer uses his or her right to withdraw from a distance contract ofa given financial service, a distance contract related to the main contract iscancelled without separate measures if the additional service is supplied by thesame business. The additional contract is also cancelled if a third party is
responsible for the additional service on the basis of a contract or otherarrangement between the business that has concluded the main contract and thethird party.

(2)

Chapters 6(24) and 10(12) lay down the provisions on the withdrawal from acredit agreement related to another contract.

Section 14 — Restrictions on the right of withdrawal
The consumer shall not have the right of withdrawal laid down in section 12, if:(1)

the price or value of a given financial service or related instrument depends
on the fluctuations in the financial market outside the control of thebusiness;

36

(2)

the contracting parties have already fulfilled their contractual obligations intheir entirety at the consumer’s express request.

Section 15 — Payment of the service provided before the withdrawal(1)

If the consumer withdraws from a contract, he or she may only be required to
pay for the service actually provided by the business prior to the withdrawal inaccordance with the contract. The compensation shall not exceed the amountwhich is reached when the service provided prior to the withdrawal is comparedwith the full extent of the services covered by the contract.

(2)

If the business has not notified the amount of compensation or the basis for its
calculation in advance, or if the business has commenced the performance of thecontract without the express request of the consumer, the consumer is not
required to pay for the provided service.

Section 16 — Return of payments(1)

The consumer shall, without undue delay and within 30 days after sending thenotification of withdrawal, return any payments or property to the business he or
she has received according to the contract or the withdrawal shall become
void. The consumer may, however, refrain from the obligation to return thepayments or property until the business fulfils his or her own corresponding
obligations.

(2)

The business shall, without undue delay and within 30 days after receiving thenotification of withdrawal, return all sums he or she has received from theconsumer according to the contract. A compensation, which the business isentitled to charge under section 15 from the consumer for the services provided
prior to the withdrawal from the contract, may, however, be deducted from thepayments which are to be returned.

Section 17 — Restriction of choice-of-law clauses
A choice-of-law clause according to which the contract is subject to the law of acountry outside the European Economic Area shall not preclude the applicationof rules on distance selling of financial services of a member state of theEuropean Economic Area that would be applied in the absence of the clause, if
the latter rules provide for more effective consumer protection than those of thelaw referred to in the choice-of-law clause.
Section 18 — The right of the consumer to change a means of distance communication37

During the contractual relationship, the consumer shall have the right to use
other means of distance communication than the one used in concluding thecontract, if the use of other means of distance communication is not in conflictwith the nature of the contract or the financial service.

Chapter 7 — Consumer credits (385/1986)
Definitions and application restrictions
Section 1 (85/1993)(1)

For the purposes of this chapter, consumer credit means credit that, byagreement, is granted or promised to the consumer by a business in the form ofa loan, deferred payment or another corresponding financial arrangement.

(2)

In the application of this chapter, a consumer credit shall, however, not include
credit based on an agreement under which the consumer may pay the price of agood delivered or service provided on a continuous basis in instalments during
the validity of the agreement.

(3)

Credit granted for the acquisition of a residence or for studies shall be governedby the provisions of this chapter unless otherwise stipulated in the legislation
pertaining to these types of credit.

Section 2 (85/1993)
For the purposes of this chapter:(1)

running account credit means continuous consumer credit used with acredit card or other means and where the receivables of the creditor vary inaccordance with the amount of credit actually used;(2)

lump-sum credit means consumer credit other than running account credit;(3)

goods-or-services-related credit means consumer credit granted, for theacquisition of consumer goods or services, by the seller or service provider
itself or by another business on the basis of an agreement concluded withthe seller or service provider or under other arrangements for the financing
of consumers;(4)

cash price means the price for which the consumer could obtain the goods
or services if he/she paid for them in cash;

38

(5)

credit costs mean the total amount of interest, costs and other paymentsthat the consumer shall pay on the basis of the consumer credit
relationship, with the exception of insurance premiums on an insurance
policy relating to the goods delivered or services provided;(6)

credit price means the sum total of the cash price and the credit costs; and(7)annual percentage rate of charge means the interest rate that results when
the credit costs are calculated as annual interest on the credit, taking into
account any payments against the balance.

Section 3(1)

In the application of the provisions of this chapter;(1)

the assignee of the rights of the creditor on the basis of a consumer credit
agreement shall also be deemed a creditor; and(2)a leasing or hiring or similar agreement on the basis of which goods passinto the possession of a consumer and under the terms of which the cash
price and the credit costs shall be paid during the leasing period or theterms of which otherwise indicate that the intent of the agreement is totransfer the ownership of the goods to the consumer, shall be deemed acredit sale.

(2)

In the application of the provisions in section 19, the identification providing theright to use an account or other financial services or instruments shallcorrespond to the identification providing the right to use a running accountcredit. In this case, the provisions laid down on creditors shall be applied to abusiness which has concluded a contract regarding the identification with aconsumer. (29/2005)

Section 4 (85/1993)(1)

Sections 6, 7, 9, 10, 11 and 12(1) of this chapter do not apply to consumer credit
to be paid within a maximum of three months. Sections 10 and 11 do, however,
apply to such credit if the credit may be used by means of a credit card or othercorresponding means of identification.

(2)

Sections 13 and 14 of this chapter apply only to goods-or-services-related credit
and section 17 only to goods-or-services-related credit granted for the acquisitionof goods.

39

(3)

It may be stipulated by Decree that sections 6, 7, 9, 10 or 11 apply to consumer
credit amounting to not less than FIM 1,000. It may further be stipulated by
Decree that the provisions of sections 9, 10 and 11 may, in certain types ofgoods-or-services-related credit, be satisfied by sending the consumer, together
with the consumer goods or services, a document to be further confirmed by
Decree if this can be deemed necessary in order to retain or establish in the fieldin question an invoicing, delivery or other practice that is in the interest of theconsumers.

Section 4a (85/1993)
The amounts in FIM provided for in section 4(3) and 12(4) may be altered by
Decree if this is warranted by the development of the economy and monetaryconditions.

Marketing of consumer credit
Section 5
The granting of consumer credit shall not be used as a main method ofmarketing when marketing other consumer goods or services.
Section 6(1)

In marketing lump-sum credit, the annual percentage rate of charge shall be
stated. If the cash price of the goods or services is stated, their credit price shallalso be stated. If the granting of the credit is subject to taking out insurance on
the goods or services, the insurance and its premium shall also be stated.
(85/1993)(2)

If a business grants consumer credit for the same purpose on different terms, theannual percentage rate of charge and the credit price may be stated in the formof an example of the customary credit terms offered by the business.

Section 7
In marketing running account credit, the annual percentage rate of charge shallbe stated in the form of an example illustrating the typical use of the credit.
Section 8
Mere reference in marketing to the possibility of consumer credit shall not be
considered marketing of consumer credit under sections 6 and 7.

40

Section 9 (85/1993)
Before the conclusion of a consumer credit agreement the consumer shall be
notified of the contract terms and any other information referred to in section 11,
in addition to which he/she shall be provided with an opportunity to peruse
them in writing.

Provisions on the consumer credit agreement
Section 10 (85/1993)(1)

A consumer credit agreement shall be concluded in writing. The consumer shallbe given a copy of the agreement.

(2)

The consumer shall not be charged any payment, interest, fee or compensationthat is not included in the terms of the agreement referred to in paragraph (1).

Section 11 (85/1993)(1)

The consumer credit agreement shall state:(1)

the amount or limit of the credit, if any;(2)

the payments, interest and other credit costs relating to the granting anduse of the credit;(3)

the due date of the credit or, if the credit is to be paid in instalments, theamount and due date of each instalment or the other repayment conditions;(4)the credit price, any down payment and the cash price if the agreement
relates to a goods-or-services-related credit;(5)

other terms of the contract;(6)

the right, based on section 12, to pay the credit before maturity and thedetermination of the compensation therefor, if any; as well as

(7)
(2)

the annual percentage rate of charge.

In an agreement relating to a running account credit and in another agreement
relating to credit that varies in amount, the annual percentage rate of charge
may be expressed in the form of an example describing a typical use of the credit.

(3)

The terms of a consumer credit agreement may stipulate that the interest rate
payable on the credit shall vary in accordance with the basic rate of interest
charged by the Bank of Finland of other reference interest rate detailed in theagreement. The reference interest rate shall be public and based on matters not41

dependent on the unilateral decisions of the creditor. The reference interest rateof a credit in a foreign currency may also be in the currency of the credit or, if thecredit has been granted in units calculated from several currencies (basket
credit), a rate calculated in the same manner from said currencies.
(4)

The consumer shall be notified of changes in the interest rate either in theaccount statements or otherwise in writing.

Section 11a (29/2005)(1)

In distance selling, the consumer has the right to withdraw from the credit
agreement by notifying the creditor of this within 14 days after the conclusion of
the agreement or a later date on which the consumer received in a permanentmanner the prior information referred to in chapter 6a and the copy of the credit
agreement referred to in section 10.

(2)

The consumer has no right, however, to withdraw from the credit agreement if
the contracting parties have already fulfilled their contractual obligations in their
entirety at the consumer’s express request.

(3)

If the consumer withdraws from the agreement, he or she may be required to pay
as a compensation the amount corresponding annual percentage rate of charge
for the period of time he or she has been able to use the credit. The
compensation may not be required, however, if the creditor has not notified theconsumer in advance of the fact that the amount corresponding annual
percentage rate of charge may be charged or if the creditor has commenced theperformance of the contract without the consumer’s express request.

Section 11b (29/2005)(1)

The consumer shall, without undue delay and within 30 days after sending thenotification of withdrawal, return to the creditor the funds he or she has received
on the basis of the credit agreement or the withdrawal shall become void.

The

consumer may, however, refrain from the obligation to return the funds until thecreditor fulfils his or her own corresponding obligations.
(2)

The creditor shall, without undue delay and within 30 days after receiving thenotification of withdrawal, return the payments he or she has received on thebasis of the credit agreement to the consumer. The amount of annual percentage
rate of charge under section 11a(3) may, however, be deducted from thepayments which are to be returned.

42Section 12(1)

The consumer shall have the right to pay the consumer credit before it matures.

(2)

If the consumer pays the credit before maturity, a deduction shall be made fromthe remaining receivables of the creditor for the portion of the credit costs thatconcerns the period of credit that shall not be used. If the costs arising from theestablishment of the credit relationship have been specified in the agreement andthey are not unreasonable, the creditor may collect them in full.

(3)

If the consumer pays a credit payable in instalments on another date than thedue date, the period of credit that shall not be used shall be calculated as fromthe first due date following the payment.

(4)

The creditor may charge a compensation for premature payment of the credit if
the amount of the credit granted exceeds FIM 100,000 and if the interest rate on
the credit is fixed or if the period for the determination of the reference interest
rate is at least three years and if the interest rate of a corresponding new credit
offered by the same creditor at the time of repayment is lower than the interest
rate agreed upon. The maximum compensation that may be collected shall be thedifference between the interest agreed upon and the corresponding credit with
fixed interest for the remaining credit period or the period for the determinationof the reference interest rate. (85/1993).

Section 13(1)

Where a consumer has the right to withhold payment or to receive a refund,compensation or another money payment from the seller or the service provider
on the basis of a breach of contract of the latter, this right shall apply also inrespect of the creditor who has financed the purchase or service. However, thecreditor shall not be liable to pay to the consumer more than what he received
from the latter as payment.

(2)

If the seller repossesses the purchased goods or if the sale is otherwise cancelledby agreement between seller and consumer, the consumer may invoke theaccounting of the repossession or cancellation of the sale also against thecreditor who has financed the sale. However, the consumer shall not have thisright if:(1)

the creditor has, in good time and in a clear manner, notified the consumer
that the seller does not have the right of repossess the goods or any otherright to dispose of the agreement and, in case the subject-matter of the sale43

is by law to be registered, the creditor is entered in the register as theowner;(2)the creditor can otherwise prove that the consumer was aware of therestriction of the rights of the seller (541/1994).

Section 14(1)

No bill of exchange or other debt instrument may be taken from the consumer on
the basis of a consumer credit claim where the transfer or pledge of such an
instrument restricts the right of the consumer to make claims on the basis of thesale or agreement of service against a party who has received the instrument ingood faith. Such an instrument shall not be taken from a person who shares ahousehold with the consumer, either.

(2)

The provisions of paragraph (1) does not apply to a negotiable promissory noteissued by a bank.

(3)

A person who takes a bill of exchange or a negotiable instrument in violation ofparagraph (1) shall not enforce the said instrument. Separate provisions govern
the right of the debtor to make claims against an endorsee.

Section 15
The consumer shall have the right to decide to which of several receivables of thesame creditor his/her payment shall be credited.
Section 16 (541/1994)(1)

If the creditor, by agreement, for reason of the consumer’s delay in payment or
another breach of contract, has the right to claim an instalment that has nototherwise matured, to repossess the goods sold or to enforce another specificsanction, the creditor may enforce such a right only:(1)

if the payment has been delayed by at least one month and is still
outstanding and if the amount, in a lump-sum credit, is at least 10 per centor, if it concerns more than one instalment, at least five per cent of theoriginal amount of the credit or, in the case of a goods-or-services-related
credit, of the credit price or if it concerns the total remaining claim of thecreditor; or(2)

if the other breach of contract by the consumer is essential.

44

(2)

However, the creditor shall not have the right to enforce the sanction referred toin paragraph (1) if the matter is of a delay in payment and the said delay is dueto the consumer’s illness, unemployment or another corresponding reason that is
not attributable to him, except where this would, taking into account the lengthof the delay and the other circumstances, be evidently unreasonable to thecreditor.

(3)

If the creditor, on the basis of a term in an agreement referred to in paragraph(1), claims instalments that would not have otherwise matured, the deductions
referred to in section 12(2) shall be made in calculating the claim of the creditor.
The maturity cannot enter into force earlier than four weeks or, if the consumer
has earlier been reminded of the delay or other breach of contract, not earlier
than two weeks from the date on which the notice of maturity was given or sent
to the consumer. If the consumer, within this period, pays the delayed amount orremedies the other breach of contract, the maturity shall lapse.

Section 17(1)

If the creditor repossesses the goods, a statement of account shall be madebetween him and the consumer.

(2)

In the statement of account, the consumer shall be credited with the value of thegoods at the time they were repossessed. The value shall be determined inaccordance with what the seller can be presumed to have after the goods havebeen sold in an appropriate manner and, if needed, reasonably repaired.
However, in determining the value, consideration shall be given to the cash pricementioned in the agreement and to the length of time the goods were in thepossession of the consumer and to the manner in which the goods weremaintained.

(3)

The creditor shall be credited with the following:(1)

The unpaid portion of the credit with a deduction made in accordance withsection 12(2);(2)

the interest on the matured instalments;(3)

the necessary costs and payments incurred by the creditor in repossessing
the goods and which the creditor had to pay in order to obtain possession of
the goods; and

45

(4)

the claim of the creditor for repairs on or maintenance of the goods if thecreditor has the right of retention over the goods on the basis of such aclaim.

(4)

If the consumer pays at one time the amount that is to be credited to the creditor
under paragraph (3), he may retain the goods.

Section 18 has been repealed.
Section 19(1)

A consumer who has the right to use running credit shall be liable for theunauthorised use of a credit card or other means of identification providing theright to use a running account only if:(1)

he has given the means of identification to another;(2)

the passing of the means of identification into the possession of anunauthorised person is due to the negligence of the account holder and thisnegligence is not slight; or(3)after having lost possession of the means of identification in a manner otherthan that referred to in subparagraph (2) and after having become aware of
the same, the account holder has neglected to notify the creditor without
delay.

(2)

However, the account holder shall not be liable for the unauthorised use of themeans of identification in the cases referred to in paragraph (1) if:(1)

the means of identification is used after the creditor is notified that themeans of identification has been lost or is in the possession of anunauthorised person; or(2)

the seller or the party performing the service or a person who has accepted
the means of identification as the representative of them has not been
sufficiently careful in ensuring that the person in possession of the meansof identification has the right to use such means.

Section 20
A condition restricting the rights of a consumer under sections 10—19 shall be
void.

46

Authority to issue orders
Section 21(1)

If it is necessary to limit the granting of consumer credit in order to prevent
indebtedness detrimental to consumers, the Government may order that:(1)

in granting lump-sum credit, at least a certain portion of the cash price of
certain types of consumer goods or services or of consumer goods orservices with a price exceeding a certain cash price shall be charged before
delivery of the goods or performance of the service;(2)

it shall be agreed that the price in the lump-sum credit referred to in
subparagraph (1) shall be paid in full within a certain maximum period atregular intervals and primarily by equal instalments; or that(3)

in running account credit agreements it shall be agreed that at least acertain portion of the respective balance of the credit shall be paid atregular intervals.

(2)

If an order given on the basis of paragraph (1) has not been complied with, aterm in the agreement on retention of ownership or repossession of the goods
sold on the basis of a breach of contract by the consumer shall be void.

Section 22
The Ministry of Trade and Industry may issue more detailed orders on theproviding of the information referred to in sections 6—11 and on the calculationof the annual percentage rate of charge.

Supervision and sanctions
Section 23
A business that violates the provisions of this chapter on marketing or on
consumer credit agreements or the provisions issued on the basis of section 21
or 22 may, if this is necessary for consumer protection, be enjoined fromcontinuing such measures or repeating these or comparable measures. The
issuing of the injunction and its enforcement by the threat of a fine shall begoverned by the provisions of chapters 2 and 3.

47

Section 24(1)

Compliance with the provisions of this chapter shall be supervised by theConsumer Ombudsman, the Consumer Agency and, as district authorities
subordinate to it, the State Provincial Offices as well as by the Banking
Supervision Authority when the granting of credit falls within the activity
supervised by the Banking Supervision Authority. (85/1993)(2)

A business shall present for inspection by the supervisory authorities the
documents concerning consumer credits that are necessary for the supervision ofsuch credits.

Section 25 has been repealed.

Chapter 8 — Certain consumer services contracts (16/1994)
General provisions on consumer services contracts
Section 1 — Scope of application of the chapter (16/1994)(1)

The provisions of this chapter shall apply to services provided by a business(contractor) against consideration to a consumer (commissioner) and consisting ofwork or other performance relating to movables, a building, other structures orreal estate. Certain construction contracts shall, however, be governed by theprovisions of chapter 9 below. (1258/2001)(2)

The provisions of this chapter do not apply to services consisting of thesafekeeping of the property of the consumer.

Section 2 — Mandatory provisions (16/1994)
A contract term derogating from the provisions of this chapter to the detriment of
the commissioner shall be void unless otherwise provided below.

General provisions on the performance of the contractor
Section 3 — Delivery of a service (391/2002)
If the object of the service is in possession of the contractor for the delivery of aservice, the service shall be deemed delivered when the object is returned to thecommissioner after the provision of the service. In other cases, the service shallbe deemed delivered when it has been completed.

48Section 4 — Time of delivery (16/1994)
If it has not been agreed that the service is to be delivered at a certain time orupon demand or without delay, it shall be delivered within reasonable timetaking into consideration the nature and scope of the service.
Section 5 — Acquisition of material (16/1994)
Unless otherwise agreed, the contractor shall acquire the material, spare partsand supplies (material) necessary for the delivery of the service.
Section 6 — Additional work (16/1994)(1)

If, during the provision of the service, additional measures which are notincluded in the commission, but which are appropriately undertaken in the sameconnection (additional work), become necessary, the contractor shall ask thepermission of the commissioner to perform such work.

(2)

If the commissioner cannot be reached within a reasonable period, the additional
work may be done only if the costs charged for the work are minor in amount orin relation to the price of the service agreed upon or the cost estimate given forthe service. The costs incurred through the additional work may not result in the
maximum price agreed upon, if any, being exceeded.

(3)

Should the contractor notice that there is need for such additional work thatcannot be postponed without causing a hazard to health or property and which
is not performed under this section, the contractor shall, without delay, notify
the commissioner of any facts endangering safety that he has noticed.

Consequences of a delay in service
Section 7 — Right to withhold payment (16/1994)
On the basis of a delay of the contractor in delivering the service, thecommissioner shall be entitled to withhold payment of the service price. The
commissioner shall, however, not be entitled to withhold an amount whichclearly exceeds the claims that he is entitled to on the basis of the delay.
Section 8 — Right of the commissioner to demand fulfilment of the contract (16/1994)
The right of the commissioner to demand that the contractor fulfil the contract
shall correspondingly be governed by the provisions of chapter 5, section 8.

49

Section 9 — Cancellation of the contract (16/1994)(1)

The commissioner shall be entitled to cancel the contract for the delay of thecontractor if the breach of contract is essential.

(2)

If the commissioner has granted the contractor an extension for the delivery of
the service and the extension is not unreasonably short, the commissioner shall
likewise be entitled to cancel the contract if the service is not delivered within thesaid period. During the extension, the contract may be cancelled by thecommissioner only if the contractor states that he will not deliver the service
within the said period.

(3)

If the commissioner has not granted the contractor any extension, he may cancel
the contract if the service is not delivered within a reasonable period after he has
demanded its delivery.

(4)

If there are weighty reasons to presume that the service will be essentiallydelayed, the commissioner may cancel the contract immediately.

(5)

If a considerable portion of the service has already been delivered, thecommissioner shall be entitled to cancel the contract only with regard to the
portion that has not been delivered. If the delay results in an essential failure toattain the result of the service, the commissioner may, however, cancel thecontract in its entirety. For performances which cannot be returned, thecommissioner shall pay the contractor compensation corresponding to theirvalue to the commissioner.

Section 10 — Compensation (16/1994)(1)

The commissioner shall be entitled to compensation for any loss that he suffers
due to a delay of the contractor unless the contractor proves that the delay wasdue to a cause beyond his control which he could not reasonably have been
expected to take into account at the time of the conclusion of the contract andwhose consequences he could not reasonably have avoided or overcome.

(2)

If the delay is due to a person whose aid the contractor has enlisted for the
performance of all or part of the contract, the contractor shall be exempt fromliability only if the said person would also, under paragraph (1), be exempt fromliability. The same applies if the delay is due to a supplier of the contractor or
another previous level in the supply chain.

50

(3)

However, the contractor shall be liable for indirect loss only if the delay or loss
was caused by negligence attributable to him. Indirect loss shall be deemed toinclude:(1)

loss of income incurred by the commissioner due to breach of contract ormeasures caused thereby;(2)

loss incurred through an obligation based on another contract; and(3)essential loss of use of the object of the service not resulting in direct
economic loss or other corresponding damage that is not essential.

(4)

If the loss referred to in paragraph (3)(1)—(3)(3) is incurred through the
mitigation of other loss, it shall, however, not be deemed an indirect loss.

(5)

A member of the commissioner’s family who suffers loss for the delay shall havethe same right to damages as the commissioner.

Section 11 — Notice of cancellation of contract and claim for compensation (16/1994)
If a service is delivered delayed, the commissioner shall not cancel the contract or
claim damages for the delay unless he, within a reasonable period after learningof the delay, notifies the contractor that he is cancelling the contract or that hewishes to claim compensation. If the commissioner cancels the contract, he is,however, not liable separately to notify the contractor of his claim for damages.

Characteristics and defects of the service
Section 12 — General provision on defects (16/1994)(1)

In contents, manner of performance and result, the service shall conform to what
can be deemed to have been agreed.

(2)

A service shall be provided with professional skill and care and taking into
account the interests of the commissioner. With regard to durability andotherwise, the service shall conform to what the consumer generally has reason
to expect in the case of such a service. The service shall also conform to therequirements set by law, decree or official decision.

(3)

If the contractor is to acquire material necessary for the provision of the service
and unless otherwise agreed upon, the material shall, in durability and othercharacteristics, conform to ordinary good quality.

51

(4)

If the service does not conform to the provisions of paragraphs (1)—(3), it shall bedeemed defective. The burden of proof for the service having been provided withprofessional skill and care shall lie with the contractor.

Section 13 — Information on the service (16/1994)(1)

The service shall likewise be defective if it does not conform to the informationthat the contractor has given on the contents of the service or his performance oron other circumstances relating to the quality or use of the service whenmarketing the service or otherwise before the conclusion of the contract andwhich can be deemed to have had an effect on the decision-making of thecommissioner. The same shall apply to information given during the provision of
the service which may be deemed to have an effect on the decision-making of thecommissioner.

(2)

The service shall likewise be defective if it does not conform to informationreferred to in paragraph (1) and given by a person other than the contractor at aprevious level of the supply chain or, on behalf of the contractor, when marketingthe service before the conclusion of the contract. The service shall, however, notbe deemed defective if the information has been clearly corrected in good time.
The contractor shall likewise not be liable for a defect referred to in thisparagraph if he neither knew nor should have known of the information given.

(3)

The service shall likewise be defective if the contractor has failed to give thecommissioner information on a circumstance referred to in paragraph (1) that heshould have been aware of and which the commissioner could justifiably havebeen expected to be notified of.

Section 14 — Duty to advise (16/1994)(1)

Should it, either upon the conclusion of the contract or thereafter, become
evident that the service, taking into account its price, the value andcharacteristics of the object of the service or other circumstances, evidently
would not be appropriate from the point of view of the commissioner, thecontractor shall without delay inform the commissioner thereof. The contractor
shall likewise inform the commissioner if the service is likely to be considerably
more expensive that the commissioner could reasonably expect.

(2)

If the commissioner cannot be reached within a reasonable time or fails to issue
the necessary instructions, the contractor shall interrupt the provision of theservice. The contractor may, however, continue his performance if he has special

52reason to presume that the commissioner, nevertheless, wishes the service to beprovided.
(3)

Should the contractor fail in his duties under this section, the service shall bedefective.

Section 15 — Time determining the defect and warranty (16/1994)(1)

The defectiveness of the contractor’s performance shall be assessed on the basisof the results of the performance at the time of delivery or, if the delivery isdelayed for a reason attributable to the commissioner, after the contractor has
done what the performance requires of him. The contractor shall be liable also
even if the defect is discovered later. If the quality of the performance deteriorates
after the time referred to above, the performance shall be deemed defective if thedeterioration is due to a breach of contract by the contractor.

(2)

A warranty relating to a service shall correspondingly be governed by theprovisions of chapter 5, sections 15a and 15b. (1258/2001)

Sanctions for a defectSection 16 — Notice of defect (16/1994)(1)

The commissioner shall not invoke a defect unless he notifies the contractor ofthe defect within a reasonable period from the time he noticed or should havenoticed the defect. The notice of defect can also be made to a business who has
acted as an intermediary in the service or undertaken liability for its
characteristics.

(2)

Notwithstanding the provisions of paragraph (1), the commissioner may invoke
the defect of a service if:(1)

the contractor’s conduct has been grossly negligent or incompatible withhonour or good faith;(2)

the defect is based on the fact that the service does not conform to therequirements issued in provisions for the protection of health and property;(3)

the defect is based on the fact that the result of the service is otherwise
hazardous to health or property.

53Section 17 — Right to withhold payment (16/1994)
On the basis of a defect, the commissioner shall be entitled to withhold paymentof the service price. However, the commissioner shall not withhold an amountthat evidently exceeds the claims he is entitled to on the basis of the defect.
Section 18 — Rectification of a defect (16/1994)(1)

The commissioner shall be entitled to demand that the contractor rectify thedefect or replace his service with a non-defective service without additional costto the commissioner. However, the contractor shall not be liable to rectify thedefect if this would cause him unreasonable cost or inconvenience.

(2)

Even if the commissioner does not demand that a defect be rectified, thecontractor may, at his own expense, perform such a rectification if he offers to doso as soon as the commissioner notifies him of the defect. The commissioner
shall have the right to refuse the rectification if it would cause him essential
inconvenience or the danger that he would not be compensated for the costs
incurred by him or if he has another special reason for his refusal.

(3)

The contractor shall not invoke the fact that he has not been given an
opportunity referred to in paragraph (2) to rectify the defect, if the commissioner
has had the defect rectified and it could not reasonably have been expected thatthe commissioner wait for rectification by the contractor.

Section 19 — Price reduction and cancellation of contract (16/1994)(1)

If the rectification of a defect or a replacement of a service is not possible or ifsuch a remedy is not effected within a reasonable time from the commissioner’s
notice of defect, the commissioner shall be entitled to demand a price reduction
corresponding to the defect.

(2)

If there are weighty reasons to presume that there will be an essential defect inthe service, the commissioner may cancel the contract to the extent that theservice has not yet been performed.

(3)

To the extent that the service has been performed, the commissioner may, in thecases referred to in paragraph (1), cancel the contract if no other result can bedeemed reasonable for him. For performances that cannot be returned without
essential inconvenience, the commissioner shall pay the contractor a pricecorresponding to its value.

54Section 20 — Compensation (16/1994)(1)

The commissioner shall be entitled to compensation for any loss that he suffers
for a defect in a service. The liability shall cover personal injury and property
damage sustained by the commissioner unless otherwise provided in section 21.
However, the contractor shall be liable to compensate indirect damage referred toin section 10(3)—(4) only if the defect is attributable to negligence on his part.

(2)

A member of the commissioner’s family who suffers loss for the defect shall havethe same right to damages as the commissioner.

Section 21 — Property damage caused by materials (16/1994)(1)

If the material used in the performance of a service causes damage to otherproperty than the object of the service, the provisions of section 20 on theliability of the contractor apply only if the damage is caused to property with anessential connection of use with the object of the service.

(2)

If the contractor pays compensation under paragraph (1), any right of thecommissioner toclaim

damages

under

the

Product

Liability

Act

shall

correspondingly be transferred to the contractor. The provisions of section 10 of
the Product Liability Act shall apply also to the right of the contractor tocompensation.
(3)

The provisions of this chapter do not apply to compensation payable for personal
injury caused by the material used in the performance of a service.

Section 22 — Third-party liability (16/1994)
The provisions of chapter 5, section 22 apply correspondingly to a service
referred to in this chapter.

Duties of the commissioner and sanctions for a breach of contract by thecommissioner
Section 23 — Price of the service (16/1994)(1)

If the price of the service or the basis for its determination has not been agreed
upon, the commissioner shall pay a price that is reasonable taking into accountthe contents, scope, quality and economically appropriate manner of performance of the service, the going price or manner of calculating the price at thetime of the conclusion of the contract as well as the other circumstances. If thecontractor, when marketing the service, has given information on the price of the55

service or its manner of calculation relating to the price level at the time of theconclusion of the contract and this can be deemed to have affected the contract,
the price shall be determined in accordance with the information given.
(2)

If the business, at the request of the consumer, has made preliminary inquiries
into the contents of the service or the costs to be incurred thereby, he may
demand payment for such preliminary investigations except if the consumer, on
the basis of the practice prevailing in the field or other reason, had reason to
presume that the measures would be undertaken without charge.

(3)

If what the contractor has performed under the contract is damaged, destroyedor otherwise lost before delivery of the service and this is not due to a reason
attributable to the commissioner, the contractor shall not be entitled to demand
payment for the work or material lost or for other additional costs. The above
does not apply if the performance has been lost after the delivery of the service
has been delayed due to a reason attributable to the commissioner.

Section 24 — Cost estimate (16/1994)(1)

If the contractor has given a cost estimate on the service, the final price may
exceed the estimate by 15 per cent at the most. The commissioner and thecontractor may, however, separately agree on the amount by which the costestimate may be exceeded.

(2)

The cost estimate shall be deemed to relate to the total price charged for theservice unless otherwise agreed.

(3)

Should a dispute arise as to whether a quoted amount is to be deemed a fixedprice, a cost estimate or an indicative price, the contractor shall prove his claim.

Section 25 — Payment of the price and itemisation (16/1994)(1)

If no time has been agreed for the payment of the service price, the commissioner
shall pay the price upon demand of the contractor, however, not before theservice has been delivered in accordance with section 3 and the commissioner
has had a reasonable period to examine the performance.

(2)

If the service is not rendered against a fixed price, the contractor shall, uponrequest of the commissioner, give him a written itemisation on the basis of which
he may evaluate the contents of the performance and the determination of its
price. A commissioner who has requested the itemisation without undue delay

56

after the rendering of the service or after receipt of an invoice for the service,
shall not be liable to pay until after receipt of the itemisation.
(3)

If the payment is made through the bank or the post, it shall, for the purposes of
estimating the rights of the contractor referred to in sections 27—30, be deemed
effected on the date on which the bank or the post accepted the proper payment
order from the commissioner.

Section 26 — Cancellation of a service (16/1994)
If the commissioner breaches the contract by cancelling the service prior to itsdelivery, the contractor shall not be entitled to finish the service. Instead, thecontractor shall be entitled to compensation for loss incurred by him in accordance with section 30.
Section 27 — Right of the contractor to withhold delivery (16/1994)(1)

If the price of the service or a part thereof shall be paid before delivery of theservice, but the payment is delayed, the contractor shall be entitled to withholddelivery until he receives the payment. The commissioner shall immediately be
notified of the interruption of the service.

(2)

Should the interruption of the delivery cause a hazard to health or a considerable
hazard to property, the contractor shall, however, undertake the measuresnecessary to prevent the hazard.

(3)

A contractor who interrupts performance under this section shall be entitled tocompensation for the extra costs thereby incurred.

Section 28 — Overdue interest (16/1994)
If the commissioner is delayed in paying the price of the service, the contractor
shall, if the commission is not withdrawn or if the contract is not cancelled, be
entitled to overdue interest in accordance with the Interest Act.
Section 29 — Right of the contractor to cancel the contract (16/1994)(1)

If the commissioner is delayed in paying all or part of the price of the service andif the breach of contract is essential, the contractor shall be entitled to cancel thecontract to the extent that the service has not been provided.

(2)

If the contractor has granted an extension for the payment of the service priceand the extension is not unreasonably short, and if the commissioner does notmake the payment within that period, the contractor shall also be entitled to57

cancel the contract. During the extension, the contractor may cancel the contract
only if the commissioner makes it known that he will not make the payment
within that period.
(3)

The contractor shall be entitled to cancel the contract on the grounds referred toin paragraphs (1) and (2) also if the commissioner fails to co-operate in thedelivery of the contract as required for the rendering of the service.

(4)

If it has become clear that the commissioner will make himself guilty of an
essential breach of contract, the contractor may cancel the contract withimmediate effect.

Section 30 — Right of the contractor to compensation (16/1994)(1)

If the contractor cancels the contract or the commissioner withdraws thecommission, the contractor shall have the right to consideration for any part ofthe service already provided as well as for measures that have to be undertakenin spite of the cancellation or withdrawal of the contract.

(2)

The contractor shall additionally be entitled to compensation for other costs that
he has incurred through performance of the contract and which are likely to beof no use as well as for special costs incurred through the cancellation orwithdrawal of the contract. For other losses, the contractor shall be entitled tocompensation that is reasonable taking into account the price of the service, thetime of the cancellation or withdrawal of the contract, the measures undertaken
to fulfil the contract as well as the other circumstances.

(3)

The contractor shall, however, not be entitled to compensation referred to inparagraph (2) if the delay of the commissioner in making the payment or thewithdrawal of the commission is due to provisions of the law, an interruption ofgeneral transport or payment traffic or another similar hindrance which thecommissioner cannot reasonably avoid or overcome.

Section 31 — Right of the contractor to retain the service object (16/1994)(1)

If the object of the service is movable property which is in possession of thecontractor and if the commissioner fails to make payments under the said
contract, the contractor shall be entitled to deny the property to thecommissioner or the owner of the property until his claim has been paid or until
sufficient security therefor has been placed.

58

(2)

The right to sell a piece of property subject to the right of retention shall begoverned by special provisions thereon.

Other provisions on certain consumer service contracts
Section 32 — Property damage caused in connection with a service (16/1994)(1)

If the object of the service or other property of the commissioner or his family
member has been damaged, diminished, destroyed or lost while in the possession
or under the supervision of the contractor under a service contract, thecontractor shall be liable to compensate for the loss unless he proves that theloss was not due to negligence on his part.

(2)

The obligation of the contractor to look after the service object shall not cease on
the basis of the cancellation of the contract until the object has been returned tothe possession of the commissioner or until the contractor, in accordance with
provisions elsewhere in the law, is entitled to stop looking after it.

Section 33 — Mitigation of damage and adjustment of compensation (16/1994)
The provisions of chapter 5, section 30 apply correspondingly to a service
referred to in this chapter.
Section 34 — Liability of the supplier of materials for defects (16/1994)(1)

The commissioner shall be entitled to direct his claim, caused by a defect in thematerial used in the provision of a service and based on this chapter, also
against the business who has delivered the material for sale at a previous level ofthe supply chain.

(2)

The commissioner shall, however, not have the right referred to in paragraph (1):(1)

if the defect has been caused for reasons not attributable to the material
supplier after he delivered the material on;(2)

to the extent that the claim is based on another commitment than one
made by the supplier of the material, which places the commissioner in abetter position than he would be in by the provisions of this chapter without
the said commitment; nor(3)

to the extent that the claim relates to a demand of price reduction or refundof the price of the service and exceeds the amount that the counterparty ofthe material supplier under the contract could have demanded on the same
basis, any restrictive terms in their contract disregarded.

59

(3)

The commissioner shall forfeit his right to present claims under this section
unless he notifies the supplier of the material or unless the latter is notified of anotice of defect made to a later level in the supply chain within a reasonable
period after the commissioner noticed or should have noticed the defect and thenecessary information on the supplier of the material was available to him.
However, the commissioner may, notwithstanding this paragraph, invoke thedefect if the conduct of the supplier of the material in question has been grossly
negligent or incompatible with honour and good faith or if it is a defect referred toin section 16(2)(2) or 16(2)(3).

Section 35 — Liability of another business for defects (16/1994)(1)

If the contractor has enlisted the aid of another business for the delivery of aservice and the performance of this business is defective, the commissioner shallbe entitled to direct his claim, caused by the defect and based on this chapter,also against the business in question.

(2)

The commissioner shall, however, not have the right referred to in paragraph (1):(1)

if the defect has been caused for reasons not attributable to the business inquestion after he made his delivery;(2)

to the extent that the claim is based on another commitment than one
made by the business in question, which places the commissioner in abetter position than he would be in by the provisions of this chapter without
the said commitment; nor(3)

to the extent that the claim relates to a demand of price reduction or refundof the price of the service and exceeds the amount that the counterparty ofthe business in question under the contract could have demanded on thesame basis, any restrictive terms in their contract disregarded.

(3)

The commissioner shall forfeit his right to present claims under this section
unless he notifies the business in question or unless the latter is notified of anotice of defect made to the contractor within a reasonable period after thecommissioner noticed or should have noticed the defect and the necessary
information on the business was available to him. However, the commissioner
may, notwithstanding this paragraph, invoke the defect if the conduct of thebusiness in question has been grossly negligent or incompatible with honour andgood faith or if it is a defect referred to in section 16(2)(2) or 16(2)(3).

60

Chapter 9 — Sale of building elements and construction
contracts
General provisions on the sale of building elements and on construction contracts
Section 1 — Scope of application of the chapter (16/1994)(1)

The provisions of this chapter shall apply to contracts between a business(contractor) and a consumer (commissioner):(1)on the delivery of an entity of installation-ready construction parts(elements) of a building or fixed structure connected therewith;(2)

where the delivery obligation of the business contains the delivery ofelements referred to in subparagraph (1), as well as all or part of theirinstallation; or(3)where the delivery obligation of the business includes the construction or
renovation of a building or a fixed structure connected therewith, a
subcontract relating to such a project and of significant economic value or
the basic repair or renovation of domestic premises with significant
economic value (project).

(2)

The provisions of this chapter shall also apply when the business, in addition to
performances referred to in paragraph (1), also delivers to the consumer goods
for a building or structure or performs other services relating to a building or
repair project. The provisions below on elements shall also refer to such othergoods here referred to.

(3)

A minimum value of a project falling within the scope of paragraph (1)(3) may beprovided by decree.

Section 2 — Mandatory provisions (16/1994)
A contract term derogating from the provisions of this chapter to the detriment of
the commissioner shall be void.

Delivery, distribution of costs and risk
Section 3 — Delivery (16/1994)(1)

The elements shall be deemed delivered when the commissioner has obtained
possession thereof. If the performance of the contractor also includes
installation, the elements shall, in the application of the provisions on the delay61

of the contractor, not be deemed delivered until the installation has been
completed.
(2)

A project shall be deemed delivered when it has been completed and the final
inspection, if any, has been held.

Section 4 — Time of delivery (16/1994)(1)

If no specific date has been agreed for the delivery of the elements or the project
the delivery shall take place within a reasonable time from the conclusion of thecontract.

(2)

If the contractor is entitled to determine the exact date of the delivery of theelements or other performance by the contractor, the contractor shall, within areasonable advance period, notify the commissioner of the date chosen.

Section 5 — Costs for the elements prior to delivery (16/1994)
Unless otherwise agreed, the contractor shall be liable for costs of transport andstorage and for other costs incurred for the elements before their delivery. This
provision does not, however, apply to costs incurred through a delay for a reason
attributable to the commissioner.
Section 6 — Passing of risk (16/1994)(1)

The contractor shall bear the risk for the elements being destroyed, lost or
damaged before their delivery for a reason not attributable to the commissioner.
The contractor shall likewise bear the risk for other destruction, damage or lossof his performance for a reason not attributable to the commissioner before thedelivery or, if the delivery is delayed for a reason attributable to thecommissioner, before the contractor has performed what is necessary for him to
perform for the delivery.

(2)

If elements are destroyed, lost or damaged for a reason not attributable to thecontractor while the risk lies with the commissioner, the commissioner shall,nevertheless, be liable to pay the price. The same shall apply if anotherperformance of the contractor is damaged after the risk has passed to thecommissioner.

62

Sanctions for the contractor’s delay
Section 7 — Right to withhold payment (16/1994)(1)

If, due to a delay of the contractor, the elements are not delivered when the priceor part thereof is due for payment, the commissioner shall be entitled to withhold
payment until the delivery is effected. If only a part of the delivery is delayed, thecommissioner shall, however, not be entitled to withhold payment to the extent
that it would clearly exceed the claims that he is entitled to because of the delay.
Even after the delivery, the commissioner shall be entitled to withhold paymentof such part of the price that is necessary as security for a claim based on the
delay.

(2)

If, due to the delay of the contractor, a delivery referred to in section 1(1)(3) has
not reached a stage referred to in the contract when the payment or part thereof
falls due, the commissioner shall be entitled to withhold payment until thecontractual stage is reached. If the delivery is only partly delayed, the provisionsof paragraph (1) apply correspondingly. The right of the commissioner to withhold payment to secure his claim for compensation shall likewise be governed by
the relevant provisions of paragraph (1).

(3)

If the price or part thereof under the contract falls due at a certain time before
delivery, but if there is good reason to presume that the delivery of the elementsor the project will be delayed, the commissioner shall be entitled to withhold
payment until the contractor makes it likely that he can perform the contract ontime.

Section 8 — Right of commissioner to demand fulfilment of the contract (16/1994)
The right of the commissioner to demand that the contractor fulfil the contract
shall be correspondingly governed by the provisions of chapter 5, section 8.
Section 9 — Standard compensation for delay (16/1994)(1)

If the delivery of elements or the project is delayed, the commissioner shall beentitled to standard compensation. This shall, for each beginning week of delay
during the first month, amount to 0.5 per cent of the corresponding part of theprice and, for each beginning week of delay thereafter, to 1 per cent of thecorresponding part of the price.

(2)

If the delay in the delivery of the elements also delays the installation of otherelements, the standard compensation shall be calculated from a part of the price63

including the share of the latter elements, including their installation, if this is apart of the obligations of the contractor.
(3)

The maximum of the standard compensation shall amount to 10 per cent of thepart of the price referred to in paragraph (1) or (2). This provision
notwithstanding, the commissioner shall, however, be entitled to a compensation
under section 11 for any loss exceeding the standard compensation.

(4)

If the delivery of the contractor is prevented for a reason referred to in section
11(1) or (2), the contractor need not pay compensation.

Section 10 — Cancellation of the contract (16/1994)(1)

The commissioner shall be entitled to cancel the contract for a delay of thecontractor if this causes him essential inconvenience. If the elements forming the
subject-matter of the contract are to be manufactured or acquired specifically forthe commissioner in accordance with his instructions or wishes and if thecontractor cannot, without considerable loss, make other use of them, thecommissioner shall not cancel the contract unless the delay has lasted for morethan 60 days. The commissioner shall, however, be entitled to cancel thecontract even before the delay has lasted for 60 days if his position would beunreasonable, had he to adhere to the contract.

(2)

If the delay related to an element which can, without any detriment, be replacedby corresponding goods acquired elsewhere, the commissioner shall be entitled tocancel the contract under the conditions referred to in chapter 5, section 9.

(3)

If the contractor is delayed in the installation of the elements, the commissioner
shall be entitled to cancel the contract for this part under the conditions referred
to in chapter 8, section 9.

(4)

If there are weighty reasons to presume that a delay entitling to cancellation will
occur, the commissioner may cancel the contract even before the time of delivery
has arrived.

Section 11 — Compensation (16/1994)(1)

The commissioner shall be entitled to compensation for loss that he suffers due
to a delay of the contractor, unless the contractor proves that the delay was due
to an impediment beyond his control which he cannot reasonably have been
expected to take into account at the time of the conclusion of the contract andwhose consequences he could not reasonable have avoided or overcome.

64

(2)

If the delay is due to a person whose aid the contractor has enlisted for the
performance of all or part of the contract, the contractor shall be exempt fromliability only if the person in question would also be exempt from liability underparagraph (1). The same applies if the delay is due to a supplier of goods oranother previous level in the supply chain.

(3)

The contractor shall, however, be liable to compensate for indirect loss only if thedelay or loss is due to negligence attributable to him. Indirect loss shall include:(1)

loss of income suffered by the commissioner due to the breach of contract
or measures resulting therefrom;(2)

loss incurred through obligations based on another contract, and(3)essential loss of the use of the product not resulting in direct economic loss,
as well as other comparable detriment where this is essential.

(4)

If a loss referred to in paragraph 3(1)—(3) is incurred through the mitigation ofother loss, it shall not, however, be considered indirect loss for the said part.

(5)

If the performance of the contractor is subject to an impediment referred to inparagraph (1) or (2) and if the contractor fails, without delay, to notify thecommissioner of the impediment and its effect on the chances to perform thecontract, the commissioner shall be entitled to compensation for loss that could
have been avoided if he had been notified in time.

(6)

A member of the commissioner’s family who suffers loss for the delay shall havethe same right to compensation as the commissioner.

Section 12 — Special provisions on cancellation of the contract (16/1994)(1)

If the commissioner cancels all or part of the contract and if the performancealready effected by the contractor cannot be returned essentially unchanged orwithout causing essential detriment to the commissioner, the contractor shall beentitled to receive from the commissioner compensation which corresponds to its
value to the commissioner.

(2)

If the commissioner cancels all or part of the contract to the extent that is has
not been performed, he shall be entitled to receive from the contractor any
drawings or special instructions or information that is necessary to perform theremaining part of the work.

65

Characteristics of the performance and defectSection 13 — General provision on defects (16/1994)(1)

The performance of the contractor shall be defective if it does not in contents,
quality or other characteristics conform to what can be deemed agreed.

(2)

The performance of the contractor shall also be defective if:(1)

it does not comply with the requirements contained in provisions or orders
in force at the time of the delivery or with the requirements of good building
practice;(2)

it causes or it can reasonably be presumed to cause a health hazard;(3)

the installation of the elements or the project or other task belonging to the
obligations of the contractor has not been performed with professional skill
and care;(4)

the elements have not been appropriately packaged or otherwise protected
where this is necessary for the transport or storage of the elements; or(5)

the delivery does not in other respects conform to what the consumer canreasonably expect in connection with such contracts.

Section 14 — Information on the performance (16/1994)(1)

The performance of the contractor shall also be defective if it does not conform to
the information given by the contractor in marketing or otherwise before theconclusion of the contract of the characteristics of the elements, the contents of
his performance or other circumstances relating to the quality or use of his
performance and which can be presumed to have had an effect on the contract.
The same shall apply to information given after the conclusion of the contract
which

can

be

presumedtohaveaffectedthedecision-making

of

the

commissioner.
(2)

The performance of the contractor shall also be defective if it does not conform to
information referred to in paragraph (1) and given by a person other than thecontractor either at a previous level of the supply chain or on behalf of thecontractor when marketing the performance. However, the performance shall not
be considered defective if the information was clearly corrected in time. Moreover,the contractor shall not be liable for a defect referred to in this paragraph if heneither knew nor should have known of the information given.

66

(3)

The performance of the contractor shall likewise be defective if it is supplied tothe commissioner without instructions which are necessary for the storage,
installation, use, or maintenance of the elements or if the contractor otherwise
has failed to notify the commissioner of a factor referred to in paragraph (1)which he should have been aware of and which the commissioner could
reasonably expect to be informed of.

Section 15 — Relevant time for determining conformity; warranty (1258/2001)
The provisions of chapter 5, sections 15, 15a and 15b, apply correspondingly to acontract referred to in this chapter.

Sanctions for a defectSection 16 — Notice of defect (16/1994)(1)

A commissioner shall not have the right to invoke a defect in the delivery of thecontractor if he does not give notice to the contractor of the defect within areasonable time after he discovered or ought to have discovered it. The notice of
defect may also be given to the business who has acted as an intermediary in thedelivery on behalf of the contractor or undertaken responsibility to remedy thedefect or otherwise to be responsible for the characteristics of the performance.

(2)

Notwithstanding the provisions of paragraph (1), the commissioner shall have theright to invoke the defect if:(1)

the conduct of the contractor or other business referred to in paragraph (1)has been grossly negligent or incompatible with honour and good faith;(2)

the defect is based on the fact that the performance does not conform to therequirements set for it in the Product Safety Act or in other provisions ororders issued for the protection of health or property; or if(3)

the defect is based on the fact that the performance is otherwise hazardous
to health or property.

Section 17 — Right to withhold payment (16/1994)
On the basis of a defect, the commissioner shall have the right to withhold
payment of the price. The commissioner shall, however, not have the right towithhold an amount that evidently exceeds the claims that he is entitled to on
the basis of the defect.

67Section 18 — Rectification of the defect (16/1994)(1)

The commissioner is entitled to require that the contractor rectify the defect orreplace the defective elements with non-defective elements without costs to thecommissioner. It is a prerequisite that the defect can be rectified without causing
the contractor unconscionable costs or unreasonable detriment.

(2)

Even if the commissioner does not require that the defect be rectified or that nondefective elements be delivered, the contractor shall have the right to perform
such a rectification, at his own expense, if he offers to do so without delay after
the commissioner has notified him of the defect and he has had an appropriate
opportunity to inspect the object. The commissioner shall have the right to refuse
the rectification of the defect if it would cause him unreasonable detriment or a
danger that the costs incurred by the commissioner not be compensated.

(3)

The contractor shall not invoke the fact that he did not have a chance to remedy
the defect referred to in paragraph (2) if the commissioner has had the defectrectified and if, considering the circumstances, it cannot reasonably be expectedthat the commissioner would have waited for the contractor’s rectification.

Section 19 — Reduction of price and cancellation (16/1994)(1)

If rectification of the defect is out of the question or if the rectification is noteffected within reasonable time after the commissioner has given notice of thedefect and the contractor has had an appropriate opportunity to inspect theobject, the commissioner may demand a reduction in the price comparable to thedefect or, if the breach of contract is essential, to cancel the contract.

(2)

To the extent that the delivery already effected by the contractor cannot be
returned without essential detriment, the commissioner may cancel the contract
only if another consequence cannot be deemed reasonable from his point of view.

(3)

If there are weighty reasons to presume that a later delivery of the contractor will
be defective, the commissioner may cancel the contract to the extent that it has
not yet been performed by the contractor.

(4)

The provisions of section 12 apply correspondingly when the commissioner
cancels the contract under this section.

Section 20 — Compensation (16/1994)(1)

The commissioner shall be entitled to compensation for loss that he suffers
because of a defect in the delivery of the contractor.

68

(2)

Indirect loss referred to above in section 11(3) and (4) shall, however, becompensated for by the contractor only if the defect or loss is due to negligenceon his part.

(3)

Compensation under this section shall also cover personal injury and property
damage incurred by the commissioner because of the defect. However, thissection does not apply:(1)

to the compensation of personal injury caused by an element delivered or bya defect in the material of a performance effected;(2)

to the compensation of property damage caused by an element delivered orby a defect in the material of a performance effected if the damage is caused
to other property than the building or residential movable property that is
primarily in private use; nor(3)

to the compensation of property damage caused by a defect in a piece ofequipment belonging to the fixtures of a building if the damage is caused toproperty that does not have an direct connection of use with the equipment.

(4)

A member of the commissioner’s family who suffers loss for the defect shall havethe same right to damages as the commissioner.

Section 21 — Liability of a third party (16/1994)
The provisions of chapter 5, section 22 apply correspondingly to a performancereferred to in this chapter.
Section 22 — Liability for an error in an estimate (16/1994)
If the contractor has given the commissioner an estimate for the cost of supplies,
work and measures necessary for the completion of a building, but which are notincluded in the contractor’s own performance, and if the commissioner has had
good reason to rely on the estimate not being essentially exceeded, thecommissioner shall be entitled to a reasonable compensation if the contractor, in
preparing the estimate, has not proceeded with care and if the costs incurred by
the commissioner are therefore considerably higher than estimated.

Price and its payment
Section 23 — Cost estimate (16/1994)
If the delivery of the elements or the service relating to the performance of thecontractor referred to in section 1(2) has not been agreed to be effected for a fixed69

price, the contractor shall, before the conclusion of the contract, give thecommissioner a cost estimate thereof. The price of the delivery may, in this case,not exceed the cost estimate by more than 15 per cent unless otherwise provided
in section 24.
Section 24 — Terms of price increase (16/1994)(1)

A contract term under which the contractor may unilaterally raise the priceagreed upon or exceed the cost estimate by more than that provided for in
section 23 shall be valid only if:(1)

the raise is due to an amendment of the law or a decision of an authoritythat the contractor cannot reasonable have been expected to take into
account at the time of the conclusion of the contract or an impediment
affecting building, the installation of elements or other service to be
performed by the contractor which is beyond the control of the contractor
and which he cannot reasonably have been expected to take into account at
the time of the conclusion of the contract and whose consequences hecannot reasonably have avoided or overcome;(2)

the performance of the contractor has been postponed for a reason
attributable to the commissioner and the raise is due to increased costs
thereby incurred by the contractor; or if(3)

the raise is due to the incorrectness of information which has been given by
the commissioner or whose acquisition has been the responsibility of thecommissioner.

(2)

The commissioner shall be informed of the price increase and its grounds
without delay. In the cases referred to in paragraph (1)(1) and (1)(2), a term forthe increase of the price shall not be invoked after the contractor has effected his
performance.

(3)

If, in a case referred to in paragraph (1)(1), the price increase would exceed 5 percent of the price, the commissioner shall be entitled to cancel the contract except
when the price increase is due to a expansion of the basis of taxation so that aformerly tax-exempt performance becomes a taxable performance. If, with regard
to the installation of elements, the raise exceeds 15 per cent of the contract price,
the commissioner shall be entitled to cancel the contract for the installation.

70Section 25 — Payment of the price and security (16/1994)(1)

If the time of the payment of the price has not been agreed, the commissioner
shall pay the price upon demand, however, not before the performance has beendelivered in accordance with section 3 and the commissioner has had areasonable opportunity to inspect the performance.

(2)

If, under the contract, the commissioner is to pay a part of the price to thecontractor in advance, the contractor shall give the commissioner security thathas to be valid until the value of the contractor’s performance is at least equal tothe advance payment.

(3)

A performance which is not effected at a fixed price shall be governed by theprovisions of chapter 8, section 25(2) on the itemisation of the price.

(4)

If the payment is effected through a bank or the post, the payment shall, when
considering the rights of the contractor in accordance with sections 28 —31, be
deemed effected on the date when the bank or the post has accepted the proper
payment order of the commissioner.

Sanctions for the commissioner’s breach of contract
Section 26 — Cancellation of the commission (16/1994)(1)

If the commissioner breaches the contract by cancelling the commission before
the delivery of the elements, the contractor shall not have the right to adhere to
the contract and to demand payment of the price. Instead, the contractor shall beentitled to compensation for any loss he has incurred, in accordance with section
30.

(2)

If the cancellation relates to a project or only the installation of the elements
being delivered or other service included in the contractor’s delivery, theprovisions of chapter 8, sections 26 and 30 apply.

Section 27 — Contractor’s right to withhold performance (16/1994)
The provisions of chapter 8, section 27 apply correspondingly to the contractor’sright to withhold performance of a contract referred to in this chapter.
Section 28 — Overdue interest (16/1994)
If the commissioner is delayed in paying the price, the contractor shall, unlessthe commission is withdrawn or the contract cancelled, have the right to overdue
interest in accordance with the provisions of the Interest Act.

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Section 29 — Contractor’s right to cancel the contract (16/1994)(1)

If the commissioner is delayed in the payment of the purchase price, thecontractor may cancel the contract if the breach of contract is essential.

(2)

If the contractor has granted an extension for the payment and the extension is
not unreasonably short, and if the commissioner does not pay the price within
this period, the contractor shall also be entitled to cancel the contract. During
the extension, the contractor may cancel the contract only if the commissioner
makes it known that he will not make the payment within that period.

(3)

If the commissioner has obtained possession of the elements, the contractor may
cancel the contract, in regard to those elements, only if he has reserved the rightthereto or if the commissioner rejects the elements. With regard to work orservices to be performed for the commissioner, the contractor shall be entitled tocancel the contract only to the extent that the work or service has not yet been
performed.

(4)

The contractor shall not cancel the contract due to the commissioner’s delay inpayment after the delayed payment has been made.

Section 30 — Compensation (16/1994)(1)

If the contractor cancels the contract due to the commissioner’s delay in payment
or if the commissioner cancels the commission in accordance with section 26(1),the contractor shall be entitled to compensation for any special costs that he has
incurred due to the conclusion and performance of the contract and which are
likely to be of no other use as well as for any special costs incurred through thecancellation or withdrawal of the contract.

(2)

For other loss, the contractor shall be entitled to a reasonable compensation
taking into account the price agreed, the time of cancellation or withdrawal of thecontract, the measures undertaken to perform the contract, as well as othercircumstances.

(3)

The contractor shall, however, not be entitled to compensation if thecommissioner’s delay in payment or the withdrawal of the commission is due tothe provisions of an Act, the interruption of general transport or payment
communications or other similar hindrance which the commissioner cannot
reasonably avoid or overcome.

(4)

A contract under which the compensation payable by the commissioner isdetermined formulaically as a certain proportion of the price, or on another72

standard basis, shall be valid if the compensation under the contract isreasonable taking into account the loss generally incurred through withdrawal orcancellation and the provisions of paragraphs (1)—(3).
Section 31 — Failure of the commissioner to co-operate (16/1994)(1)

If the delivery of the elements is delayed due to a reason attributable to thecommissioner, the contractor shall be entitled to compensation from thecommissioner for costs of transport, storage and protection of the elements, aswell as insurance costs, made necessary because of the delay. A contract under
which

the

compensation

payablebythecommissioner

isdetermined

formulaically as a certain proportion of the price, or on another standard basis,shall be valid if the compensation under the contract is reasonable taking into
account the costs generally incurred by the contractor in a delay referred toabove.
(2)

If the installation of the elements is included in the obligations of the contractor
and if the installation is delayed due to reasons attributable to the commissioner,
the contractor shall be entitled to reasonable compensation for any loss that heincurs because no replacement work can be offered for the personnel allocatedfor the installation.

(3)

If the delivery referred to in section 1(1)(3) is delayed due to reasons attributable
to the commissioner, the contractor shall be entitled to compensation in accordance with paragraphs (1) and (2).

(4)

If the delivery of the contractor is unreasonably delayed due to a reason
attributable to the commissioner, the contractor shall be entitled to cancel thecontract and to obtain compensation from the commissioner in accordance withsection 30. If the installation of the elements is included in the obligations of thecontractor, the contractor shall, for this part, have a corresponding right tocancel the contract and the right to compensation.

Other provisions on the sale of building elements and on construction projects
Section 32 — Application of the provisions of the Sale of Goods Act (16/1994)
The provisions of the Sale of Goods Act apply to the sale of elements referred toin this chapter unless otherwise provided in this Act. The sale of elements
referred to in this chapter is not governed by the provisions in sections 13(3), 31,
47, 49(3) and 73(2) of the Sale of Goods Act. The provisions in section 76(2) of the73

Sale of Goods Act do not apply when the duty of care lies with the commissioner.
The provisions in sections 75—78 of the Sale of Goods Act do not apply to thesale of elements referred to in this chapter if the compensation payable to thecontractor thereunder would exceed the compensation payable under sections
28—30 of this chapter upon the contractor cancelling the contract.
Section 33 — Mitigation of damage and adjustment of the compensation (16/1994)
The provisions of chapter 5, section 30 apply correspondingly to a contractreferred to in this chapter.
Section 34 — Liability of third party (16/1994)
The provisions of chapter 5, section 31 and chapter 8, section 34 or 35 of theright of the buyer or the commissioner to direct his claim based on a defect also
against a business on a previous level in the supply chain or one enlisted by thebusiness to aid him apply correspondingly to contracts referred to in thischapter.

Chapter 10 — Marketing and selling of time-share housing(1162/1997)
Section 1 — Scope of application of the chapter and definitions (1162/1997)(1)

The provisions of this chapter apply to the marketing of time-share housing by
businesses to consumers, as well as to the selling of time-share housing by
businesses to consumers.

(2)

For the purposes of this chapter:(1)

time-share housing is defined as a building or an apartment whose
possession rotates among shares at defined or definable intervals (timeshares);(2)time-share object is defined as an entity comprising time-share housing andthe common rooms and areas available to the shareholders, as well as theservices connected to the same.

Section 2 — Mandatory provisions and choice of law (1162/1997)(1)

A contract term derogating from the provisions of this chapter to the detriment of
the consumer shall be void, unless otherwise provided below.

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(2)

If the time-share housing is located in a member state of the European Economic
Area (EEA state), but the contract would be subject to the law of a non-EEA
state, the provisions of this chapter nevertheless apply in so far as they offer
more effective consumer protection than the law that would otherwise apply.

Section 3 — Marketing document (1162/1997)
The business shall draw up a specific document concerning a time-share object(marketing document), containing the information referred to in section 4 andexplaining how the consumer can obtain additional information. When marketingtime-share housing, the document shall be referred to and the consumers shallbe informed of where and how to obtain such a document.
Section 4 — Information in a marketing document (1162/1997)(1)

A marketing document shall contain at least the following information:(1)

the name and address of the seller and, if the seller is not the owner of thetime-share object, the name and address of the owner, as well as an
explanation of the legal status and relationship of the seller and the owner;(2)

an account of the characteristics of the time-share right and the conditions
for the exercise of that right in the state where the time-share object islocated and, if these conditions have not been fulfilled, an account of thatpart of the conditions that remains unfulfilled;(3)

a detailed account of the time-share object and the available housing, as
well as information on the location of the object;(4)

information on common rooms and services included in the contract oravailable for inclusion therein, as well as on the conditions for their use;

(5)

an account of how the maintenance, administration and management of theobject has been arranged;(6)

information on the selling prices, an estimate on the costs of use of thecommon rooms and services, as well as information on the bases for the
calculation of the costs, such as fees and statutory charges, that arise fromthe ownership and use of the time-share right;(7)

an account of whether the object belongs to an exchange or resalearrangement, the administrator of the arrangement and the costs to theconsumer for making use of the arrangement;

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(8)

an account of the right of withdrawal, as provided in section 10, on theprohibition to accept payments, as provided in section 13, as well as towhom, how and when the withdrawal is to be communicated and whatcosts of withdrawal may arise, as provided in section 14;(9)

information on the termination of the credit contract referred to in section
12 in the event that the contract of sale is withdrawn from.

(2)

Moreover, the following information shall be supplied for objects underconstruction:(1)

the stage of construction and the estimated time of completion;(2)

the time when the services of general interest, such as gas, electricity, waterand telephone connections, will be available;(3)

the building permit number and the name and address of the authority that
granted the permit;(4)

information on completion guarantees and security for the repayment ofcollected payments and on the terms for the exercise of the same or, if there
are no such guarantees or security, information on the same and on thepayment schedule determined in accordance with section 15;(5)

information whether the object is envisaged to belong to an exchange orresale arrangement.

Section 5 — Promotion or sales events (1162/1997)(1)

If time-share housing is to be offered to a consumer in person at a promotion orsales event, the business shall in the invitation clearly indicate the nature of theevent and supply the most significant information on the nature of the timeshare right, the selling prices, the other costs and the time-share object.

(2)

The marketing document referred to in section 3 shall be available to theconsumer at any time during the event. The document shall be available at leastin the language used in the invitation to the event.

Section 6 — Form and language of the contract (1162/1997)(1)

The contract of sale shall be drawn up in writing and both parties shall sign it.
The form and content of a credit contract connected to the contract of sale, as
referred to in section 12, are governed by the provisions of chapter 7.

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(2)

The contract of sale and the credit contract referred to in section 12 shall, at the
choice of the buyer, be drawn up in the language of his/her state of residence orstate of citizenship, provide that the matter is of an EEA state and the chosen
language is an official language of the European Union, Norwegian or Icelandic. If
the time-share housing is located in another EEA state than the one whose
language has been chosen for the contract, the seller shall also supply the buyer
with a translation of the contract in the language of the state of location, saidtranslation to be done or authenticated by a licensed translator.

Section 7 — Marketing document as a part of the contract (1162/1997)
The information to be supplied in the marketing document in accordance withsection 4 shall form a part of the contract, unless the parties specifically agree
otherwise. The seller may unilaterally change the information in the document
only if the change is a result of circumstances which are beyond his control andwhich he could not reasonably have anticipated. Any changes shall be
communicated to the buyer before the conclusion of the contract. The
information in the marketing document and the changes thereto shall bementioned in the contract.
Section 8 — Other contents of the contract (1162/1997)(1)

In addition to the contents referred to in section 7, the contract shall include thefollowing:(1)

the name and address of the buyer;(2)

the date when the right of possession commences and the clearly defined
periods when the housing is available for use;(3)

the selling price and the payment schedule determined in accordance withsection 15, if some part of the price is agreed to be paid before a building
inspection authority has approved the housing for use;

(4)
(2)

the date and place of signature, separately for either party.

The contract shall indicate that the buyer is not liable for any other payments,
costs or obligations than those mentioned in the contract.

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Section 9 — Failure to observe the provisions on the form, language or contents of thecontract (1162/1997)(1)

A contract that does not meet the requirements provided in sections 6—8 shallnot be binding on the buyer. However, if the buyer wishes to invoke the nonbindingness of the contract because of a lack of information referred to in section
7 or 8, he/she shall notify the seller of the same at the latest in three months
and ten days from the date when the contract has been signed by both parties.

(2)

If the seller rectifies the contract so that it meets the requirements before thebuyer has invoked the non-bindingness, the buyer shall have the right ofwithdrawal referred to in section 10 as from the date when he/she received therectified contract.

(3)

If the contract lapses due to the buyer having invoked its non-bindingness, theseller shall without delay return the payments that he has received and refund
the buyer for the amount of the payments made under section 14. The returned
amounts shall bear interest, at the rate referred to in section 3(2) of the Interest
Act (633/1982), as from the date when the payment had been received.

Section 10 — Buyer’s right to withdraw from the contract (1162/1997)
The buyer shall have the right to withdraw from the contract within ten days ofthe date when both parties had signed the contract.
Subsection 2 has been repealed.
Section 11 — Notice of withdrawal (1162/1997)
The buyer shall give written notice of the withdrawal to the seller or to the person
whose name and address have been supplied for this purpose in the marketing
document. The notice may be given in the language in which the contract wasdrafted under section 6(2).
Subsection 2 has been repealed.
Section 12 — Termination of a credit contract (1162/1997)
If, for purposes of the sale, the buyer has been extended credit by the seller or byanother person on the basis of an agreement with the seller or anotherarrangement for the provision of consumer credit, the credit contract shall beterminated if the buyer withdraws from the contract. The credit contract shall be
likewise terminated if the contract of sale lapses under section 9. Upon the78termination of the credit contract, the creditor shall without delay return thepayments received from the buyer.
Section 13 — Prohibition to accept payments during the withdrawal period (1162/1997)
The seller shall not accept the selling price, a part thereof or any other payment
based on the contract of sale from the buyer, nor shall the creditor accept apayment under a credit contract referred to in section 12, until the expiry of thewithdrawal period referred to in section 10.
Section 14 — Costs of withdrawal (1162/1997)
If the buyer withdraws from the contract, he/she shall only be liable forpayments that under the law applicable to the contract are to be paid before theexpiry of the withdrawal period and which arise from the fulfilment of the formal
requirements of contract or are otherwise by nature subject to public law.
Section 15 — Payment of the selling price at the construction stage (1162/1997)
If some part of the selling price is agreed to be paid before the building inspection
authority has approved the housing for use, the advance instalments shall not be
so large that they are out of proportion to the value of the performances of theseller at the due dates. At least ten percent of the selling price shall remain
unclaimed until the housing has been approved for use and the buyer has had areasonable opportunity to inspect it.
Section 16 — Application of the provisions on consumer selling (1162/1997)
The provisions of chapter 5 on consumer selling apply, in so far as appropriate,
also to selling referred to in this chapter.
Section 17 — Sanctions for violation of certain provisions (1162/1997)
A business that violates for provisions in sections 3—8, 13 or 15 on marketing orcontracting may, if necessary for consumer protection, be enjoined fromcontinuing such conduct or from repeating such or comparable conduct. The
injunction and its reinforcement by the threat of a fine shall be subject to theprovisions of chapters 2 and 3.

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Chapter 11 — Penal provisions (1162/1997)
Section 1 (1072/2000)
A person who deliberately or through gross negligence violates the provisions ofchapter 2, sections 2—5, or provisions issued on the basis of section 6 of thesame chapter, or deliberately fails to supply a door-to-door selling document in
the manner referred to in chapter 6, section 8, or deliberately accepts a payment
prohibited in chapter 10, section 13, shall, unless the act is punishable as amarketing offence referred to in chapter 30, section 1 of the Penal Code(39/1889), be sentenced for a consumer protection violation to a fine.
Section 2 (514/1999)
The penalty for a violation of chapter 7, section 14, is provided in chapter 30,
section 3, of the Penal Code.
Section 3 (1162/1997)
A business that deliberately or through gross negligence violates the provisions ofchapter 7, sections 5—7 or 9, or provisions issued on the basis of section 22, or
who deliberately or through negligence violates the provisions of chapter 7,
sections 10 or 11, or provisions issued under section 21 of the same chapter,shall be sentenced for a consumer credit violation to a fine.
Section 4 (1162/1997)
A person who breaks an injunction reinforced with the threat of a fine, as
provided in chapter 2, section 7, chapter 7, section 23, or chapter 10, section 17,
shall not be sentenced to a penalty for the same act.
Section 5 (1162/1997)(1)

Charges for a consumer protection violation or a consumer credit violation shallbe heard by a general court of first instance.

(2)

Before bringing charges for a consumer protection violation, the publicprosecutor shall reserve the Consumer Ombudsman the right to issue astatement in the matter. This shall, however, not be necessary if the charges only
relate to a violation of a decree issued under chapter 2, section 6, the violation ofa provision of such a decree or a provision issued under a decree issued underchapter 2, section 12(2), or the failure to supply a door-to-door selling document.

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(3)

When hearing a case concerning a consumer protection violation, the court shall,subject to the restrictions referred to in paragraph (2), reserve the Consumer
Ombudsman the right to be heard.

Chapter 12 — Miscellaneous provisions (1162/1997)
Section 1 — Liability of an intermediary in respect of consumer goods and services(1162/1997)(1)

A business that acts as an intermediary in respect of a contract on consumer
goods or services on behalf of the offerer of the consumer goods or services, shallbe liable towards the consumer acquiring the goods or services for the fulfilmentof the contract in accordance with chapters 5 and 8 and section 41 of the Sale ofGoods Act. Such liability shall, however, not arise if the business acts on behalfof another business and if the consumer, at the time of the conclusion of thecontract, is aware of this and the effect of this fact on his rights.

(2)

The liability of the intermediary shall not limit the rights of the consumer against
the other party to the contract.

(3)

Separate provisions apply to the liability of real estate agents.

Section 1a — Period for bringing an action for compensation in certain cases(1162/1997)
An action under this Act for compensation for property damage caused by thegoods to other property or property damage caused to other than the object of aservice by a defect in the material used in the performance of the service shall be
brought within three years from the date on which the plaintiff was informed ofthe damage and the party liable for it. The action shall, nevertheless, be brought
within ten years from the release of the goods or material to the market by the liable party.
Section 1b — Relation to the Tort Liability Act and other Acts (1162/1997)
The provisions of this Act do not restrict the right of the injured party to claim
damages on the basis of the Tort Liability Act, the Product Liability Act or any
other Act.

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Section 1c — Right to invoke certain notices and documents (29/2005)(1)

If a notice of defect referred to in this Act or a notice of termination or withdrawal
from a contract has been appropriately sent to the recipient, the sender may
invoke the notice even if it is delayed, altered or lost.

(2)

If no other account can be given for the date the notice has been delivered, a
notice sent by mail shall be deemed to have been delivered to the recipient on theseventh day after the notice has been sent, and an electronically sent notice on
the day the notice was sent.

(3)

The provisions laid down in subsections 1 and 2 on notices also apply to a doorto-door selling document, confirmation, contractual terms and other documents
which a business has sent to the consumer under this Act.

Section 1d — Handling of disputes (1162/1997)(1)

A term in a contract concluded before a dispute arises, under which a dispute
between a business and a consumer shall be settled in arbitration, shall not bebinding on the consumer.

(2)

In a dispute between a consumer and a business, the consumer may bring theaction also in the general court of first instance in whose jurisdiction he/she
resides.

Section 1e — Calculation of the time limit (29/2005)
In calculating the time limit laid down in this Act, the day on which the contract
or other similar measure was concluded and from which the time limit begins
shall not be taken into account. If the last day of the time limit falls on a Sunday
or a holiday, Independence Day, May Day, Christmas Eve, Midsummer Eve or a
Saturday, the measure that is to be concluded may be carried out on the firstworking day after that.
Section 1f — General provisions on choice of law (416/1999)
In so far as it is not otherwise provided in this Act or another Act, the law
applicable to contractual obligations referred to in this Act shall be chosen on thebasis of the Rome Convention of 19 June 1980 on the Law Applicable toContractual Obligations. Even if the contractual obligations referred to in this Act
do not fall within the scope of the Convention, the Convention shall be applied inso far as appropriate.

82Section 2 — Detailed provisions (1162/1997)
More detailed provisions on the application and implementation of this Act may
be issued by Decree.
Section 3 — Entry into force (1162/1997)
This Act shall enter into force on 1 September 1978.

83