Advanced

”Caveat Emptor - NJA 2007 s. 86 ur ett rättsekonomiskt perspektiv”

Baleng, Rozbeh S. (2008)
Department of Law
Abstract
Disputes about what in Swedish property law is called ''abstrakta faktiska fel'', which means errors or faults that concern the physical quality of the real estate (or property), are common in Högsta Domstolen, the Swedish Supreme Court. The main reason for the many trials is that the paragraph that concerns this type of errors is somewhat unclear regarding which of the parties is to bear responsibility for the fault. During the last few decades the matter of responsibility has undergone great changes. Formerly it used to be the seller's market thus far the seller only had to bear responsibility for what the latter explicitly had promised or agreed on in the written contract, or if the latter had acted in a fraudulent manner. The market... (More)
Disputes about what in Swedish property law is called ''abstrakta faktiska fel'', which means errors or faults that concern the physical quality of the real estate (or property), are common in Högsta Domstolen, the Swedish Supreme Court. The main reason for the many trials is that the paragraph that concerns this type of errors is somewhat unclear regarding which of the parties is to bear responsibility for the fault. During the last few decades the matter of responsibility has undergone great changes. Formerly it used to be the seller's market thus far the seller only had to bear responsibility for what the latter explicitly had promised or agreed on in the written contract, or if the latter had acted in a fraudulent manner. The market was more or less overturned when the responsibility was divided in a more equal way between the two parties in the buy. Since the arrival of the new Property Act in 1970 (together with the amendment added in 1990) the seller is also responsible for errors in the real estate that the buyer cannot discover even if the buyer has undertaken a high-quality examination of the property. This essay deals with errors that concern the physical quality of the property. The main purpose of this essay is to answer the question whether the development practiced in the Swedish courts are progressing in a conformal way with the ideas of economic analysis of law or not. The question is not entirely easy to answer but points towards a direction that fails the current evolution. The only thing known for sure is that there are a lot of trials concerning this issue. NJA 2007 s. 86 is just one of the last few trials in the Supreme Court that deals with the division of responsibility for a physical error in the real estate. Even though it resulted in a correct legal, and perhaps also the fairest, outcome in this particular case, an economic analyst of law probably would have failed it. The possibilities of agreeing about sidestepping the rules of the law in this matter are frequently used by the two parties in a transaction. For example, the seller declines all responsibilities for errors in the real estate. A fundamental principal in economic analysis of law is that the law should increase prosperity in the society by reducing the transaction costs. Rules that increase the transaction cost - so much that the parties in a transaction have to circumvent them - are not desired. Therefore the laws should be interpreted by judges in a way that make them defendable from an economic analysis of law point of view. (Less)
Please use this url to cite or link to this publication:
author
Baleng, Rozbeh S.
supervisor
organization
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
Förmögenhetsrätt, Fastighetsrätt, Rättsekonomi
language
Swedish
id
1556012
date added to LUP
2010-03-08 15:55:19
date last changed
2010-03-08 15:55:19
@misc{1556012,
  abstract     = {Disputes about what in Swedish property law is called ''abstrakta faktiska fel'', which means errors or faults that concern the physical quality of the real estate (or property), are common in Högsta Domstolen, the Swedish Supreme Court. The main reason for the many trials is that the paragraph that concerns this type of errors is somewhat unclear regarding which of the parties is to bear responsibility for the fault. During the last few decades the matter of responsibility has undergone great changes. Formerly it used to be the seller's market thus far the seller only had to bear responsibility for what the latter explicitly had promised or agreed on in the written contract, or if the latter had acted in a fraudulent manner. The market was more or less overturned when the responsibility was divided in a more equal way between the two parties in the buy. Since the arrival of the new Property Act in 1970 (together with the amendment added in 1990) the seller is also responsible for errors in the real estate that the buyer cannot discover even if the buyer has undertaken a high-quality examination of the property. This essay deals with errors that concern the physical quality of the property. The main purpose of this essay is to answer the question whether the development practiced in the Swedish courts are progressing in a conformal way with the ideas of economic analysis of law or not. The question is not entirely easy to answer but points towards a direction that fails the current evolution. The only thing known for sure is that there are a lot of trials concerning this issue. NJA 2007 s. 86 is just one of the last few trials in the Supreme Court that deals with the division of responsibility for a physical error in the real estate. Even though it resulted in a correct legal, and perhaps also the fairest, outcome in this particular case, an economic analyst of law probably would have failed it. The possibilities of agreeing about sidestepping the rules of the law in this matter are frequently used by the two parties in a transaction. For example, the seller declines all responsibilities for errors in the real estate. A fundamental principal in economic analysis of law is that the law should increase prosperity in the society by reducing the transaction costs. Rules that increase the transaction cost - so much that the parties in a transaction have to circumvent them - are not desired. Therefore the laws should be interpreted by judges in a way that make them defendable from an economic analysis of law point of view.},
  author       = {Baleng, Rozbeh S.},
  keyword      = {Förmögenhetsrätt,Fastighetsrätt,Rättsekonomi},
  language     = {swe},
  note         = {Student Paper},
  title        = {”Caveat Emptor - NJA 2007 s. 86 ur ett rättsekonomiskt perspektiv”},
  year         = {2008},
}