Swedish Construction Law, Part 1 Introduction to AB 04
Construction law in Sweden is regulated primarily by two regimes. If the buyer is a consumer, the relationship is governed by the Act on Consumer Services (1985:716). I will address consumer construction in a later blog. If the buyer is not a consumer, for example commercial or municipal entities, the Act on Consumer Services does not apply. To fill this vacuum, a consortium of interested parties collaborated in drafting what could be referred to as a model contract. The model contract is called AB 04. AB stands for allmänna bestämmelser, which is Swedish for general terms and conditions. Whether you are purchasing or selling construction services in Sweden, you need to be familiar with AB 04. This blog presents an overview of AB 04. Future blogs will address several discreet issues such as the scope of the project and damages. An English version of AB 04 can be purchased at https://byggtjanst.se/bokhandel/upphandling/ab-04-engelsk-utgava.
AB 04 is not Law
Since AB 04 is not a law promulgated by the legislature, it does not automatically apply. As with all contracts, the parties have to agree to subject their contract to AB 04. This should be clarified in the contract, in other words, the contract should state that AB 04 applies to the contract. Best practice is to even attach AB 04 as an appendix to the contract. If the contract does not so indicate, resolving disputes arising from the contract will be more difficult since there will not be any statute or general terms that can be reviewed to assist in resolving disputes.
Overview of AB 04
AB 04 consists of a preface, definitions and 10 chapters. Each chapter consists of numbered paragraphs. In addition to the paragraphs, there are commentaries. The commentaries explain and clarify how the paragraphs (terms and conditions) are to be understood and applied. The chapters address the following matters (chapter numbers are in parenthesis): Scope of the contract (1), Performance (2), Organization (3), Time Periods (4), Liability and damages (5), Compensation and Payment (6), Inspection (7), Rescission (8), Dispute Resolution (9), and Streamlined Dispute Resolution. In addition to the general terms and conditions, there is a contract template that can be used.
AB 04 is the Foundation for Related Contracts
AB 04 is intended to be used in performance contracts. This means that the builder is responsible for performing the contract in accordance with the customer’s specifications. The customer, on the other hand, is responsible for planning and design. The committee that drafted AB 04 has also drafted similar model terms and conditions and template contracts for related contractual relations. Hence, ABT 06 is intended for use where the contractor is responsible for planning and design in addition to performance. ABK 09 is used for consulting agreements relating to construction. ABM 07 is used for purchase by contractors of the materials needed in the construction project. There are also model terms and conditions that are intended for sub-contractors (AB-U 07 and ABT-U 07.
For more information about construction law, https://primalaw.se/law-construction-law-2/?lang=en.