Contractor liability for its sub-contractor's acts outside of contract

| Insight

The Norwegian Supreme Court's recent decision of 27 May 2020 (HR-2020-1120-A) sets out that contractors may be liable for damage caused by its sub-contractors outside of the contract, but clarifies the limits for such liability.

In the case before the Supreme Court the sub-contractor had caused damage on assets that were not part of the subject-matter of the contract, but the damage had been caused while fulfilling the contract between the contractor and the one suffering damage (the Norwegian government).

The Supreme Court said that Norwegian law does open for claiming damages from the contractor for its sub-contractor’s tortious acts, even outside of contract, but the acts need to be sufficiently close to the subject-matter of the contact, assessed on a case to case basis.

In that case the tortious acts were not sufficiently close, as the damage was merely caused while transporting material to the site where the contract should be fulfilled, and could in principle have been inflicted on any third party.

It was merely a coincidence that the property was owned by the contractor’s counter party in the contract.

Link to the decision.