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The Nordic safety valve that looks more dangerous than it is

Published 8 June 2026 · 5 min read · By GD · LexCodex

A supplier is locked into a five-year contract that turned sour after the first. The margins are gone, the counterparty refuses to renegotiate, and someone proposes what someone always proposes at that point: we'll invoke section 36. It sounds like an emergency exit. It rarely is one.

Section 36 of the Swedish Contracts Act (36 § avtalslagen) is the general clause — the provision that lets a court modify or set aside a contract term that is unreasonable. Sweden introduced it in 1976, and on paper it is broad to an almost unsettling degree: the court weighs the content of the contract, the circumstances at its conclusion, subsequent circumstances, and the circumstances in general. Four open categories, no clear threshold. For anyone who drafts contracts, that is an uncomfortable thought — that every clause you write could, in theory, be struck out by a judge who finds it unfair.

In practice the provision behaves quite differently from how it reads. Drafters have lived with section 36 for nearly fifty years, rather as one lives with a neighbour who has never complained but always could. Between two businesses of equal strength, it takes considerably more than a bad outcome for a term to be adjusted. Section 36 is not a right of regret for the party who negotiated poorly.

The same sentence in four countries

What is striking is that the supplier would have received much the same answer in Oslo, Copenhagen or Helsinki. Within little more than a decade, the Nordic countries wrote almost the same sentence into their contract law. Denmark went first, in 1975. Sweden followed in 1976, Finland in 1982, Norway in 1983, Iceland in 1986.

The wordings are so close that you can set the Danish aftaleloven § 36 beside the Norwegian avtaleloven § 36 and barely find the seam: an agreement may be modified or set aside if it would be unreasonable — urimelig — to enforce it. This was no coincidence. The Nordic contract acts share roots reaching back to the 1910s, and the general clause became another chapter in the same editorial collaboration: four legislatures that, quite independently, happened to phrase things identically — except that they were not independent at all.

But the sentence lives different lives

The likeness in text conceals a difference in application. From the 1990s, when the EU directive on unfair terms in consumer contracts had to be fitted in, the systems began to drift apart: the directive requires that unfair consumer terms be disregarded entirely, whereas the Nordic tradition prefers to modify the term so that it becomes reasonable. That all-round adjustment — trimming a clause rather than tearing it out — is something of a Nordic speciality, and it sat awkwardly with the directive's logic.

And even where the statutory text is identical, the judicial culture differs. One small detail captures it: in Denmark, until 1994, section 36 could only set a term aside, not alter it. For nearly twenty years the choice was binary — the term stood or it fell, but it was never trimmed. The same sentence, yet a wholly different toolbox in the judge's hand depending on where and when the dispute was heard.

What it means for the drafter

For anyone drafting or reviewing contracts that run across borders, this points in two directions at once.

Do not count on section 36 as a rescue. The threshold in commercial relationships between equal parties is high throughout the Nordics, and a party who builds its deal on the hope that a court will save a badly negotiated term is building on sand. But do not draft in fear of it either. A well-balanced term survives, and fear of the general clause tends to produce over-worked, defensive contracts that please no one — least of all the person who has to read them three years later.

The real lesson lies in the gap between statutory text and application. That the Danish, Norwegian, Swedish and Finnish provisions look alike does not mean they weigh the same in a courtroom. A term a Swedish court would let stand may draw objections from a Norwegian one — not because the law is different, but because the practice is. Whoever reads the four provisions and believes they have read one has read it wrong, though in the most forgivable of ways.

For the supplier in the example, the dull answer remains: renegotiate if you can, and next time spend your effort on the term before it is signed — not on the clause that may not save it afterward.