The guiding principle for selecting the applicable law of a commercial contract in Denmark is that of party autonomy, meaning that the parties are generally free to choose which law shall govern their contract. This freedom allows the parties to select the applicable law that is appropriate for the nature of their transaction and to contractually derogate from the default rules that would otherwise apply.

However, this principle is subject to certain limitations designed to protect fundamental legal interests and public policy. First, a choice of law will not be upheld where it is made deliberately to circumvent mandatory rules of a particular jurisdiction with which the contract is otherwise exclusively connected. Second, the chosen law may be set aside by internationally mandatory rules of Danish law (or the law of another relevant country) that are considered so essential to the protection of public interests that they apply irrespective of the parties’ choice of law. Third, the result of applying the chosen law must not conflict with fundamental national legal principles (the “ordre public” reservation).

As a general rule, there are no requirements as to form under Danish law (such as being in writing, registration, signature or approval) for a commercial contract to be valid. Consequently, oral agreements are just as valid and binding as written agreements.

That said, oral agreements may give rise to evidentiary issues if it is unclear whether an agreement was in fact concluded or what its exact terms are.

There are exceptions to freedom of form under Danish law. Certain statutes prescribe that specific agreements must be in writing and, in some cases, also signed. The purpose is typically either to protect one of the contracting parties or to meet legal-technical or evidentiary considerations.

In Denmark, commercial contracts are primarily governed by the Danish Contract Act and the Danish Sale of Goods Act. Other statutes may also apply depending on the nature of the commercial contract, for instance sector‑specific regulation.

The Danish Contract Act and the Danish Sale of Goods Act govern both B2B and B2C contracts, and may, in B2B contracts, generally be deviated from by the parties.

CISG

Denmark is a signatory to the 1980 United Nations Convention on Contracts for the International Sale of Goods (CISG). Accordingly, the CISG may apply where the parties choose Danish law or where Danish law is otherwise applicable. However, the parties can agree to exclude the CISG’s application.

Differences Between Danish Sale of Goods Act and CISG

The Danish Sale of Goods Act and the CISG differ in a number of ways, including, for example, the following:

• The CISG has a narrower scope of application than the Danish Sale of Goods Act. For example, the CISG does not cover auctions, forced sales or sales of securities, money, rights, ships or aircraft.
• Both systems generally function as default laws, and the parties can thus agree to exclude or modify them, but they diverge on the treatment of trade usages, as the CISG sets a higher threshold for recognising trade usages unless both parties have clearly accepted them.
• The CISG also contains international rules of interpretation that are not reflected in the Danish Sale of Goods Act.
• On delivery and transfer of risk, the Danish Sale of Goods Act ties them closely together, while the CISG treats them more distinctly. The Danish Sale of Goods Act also regulates specific delivery terms (eg, “franco”), which the CISG does not.
• The two systems also differ in their concepts of non-conformity, with the Danish Sale of Goods Act generally adopting a broader approach.
• Damages also differ materially. The Danish Sale of Goods Act divides responsibility depending on the party and the type of breach, distinguishes between direct and indirect loss (with stricter standards for indirect loss), and often makes suppliers more accountable within a chain of contracts than under the CISG. The Danish Sale of Goods Act also allows courts to reduce damages in some cases, which the CISG does not permit.
• On notice requirements, the CISG does not, with a few exceptions, require formal notice before claiming specific performance. The Danish Sale of Goods Act, however, requires timely notice before enforcing performance.

Danish contract law is based on the principle of freedom of contract, but some mandatory rules apply for specific types of contracts. This is the case for, as an example, commercial agents regulated by the Danish Commercial Agents Act.

Danish commercial contracts are increasingly being influenced by foreign, particularly common-law, approaches. This trend has prompted an increased use of non-Danish legal concepts and principles in drafting. However, Danish guidance and case law addressing the treatment of such foreign concepts and principles is limited, and their interpretation under Danish law may very well differ from their native jurisdictions. Accordingly, outcomes may not align with those typically expected where the concepts originate.

Denmark is a signatory to the 1955 Hague Convention on the Law Applicable to International Sale of Goods and the Rome Convention (Convention (80/934/EEC) on the Law Applicable to Contractual Obligations); however, Denmark is not a party to the Rome I Regulation (Regulation (EC) No 593/2008 on the law applicable to contractual obligations).

With reference to 1.1 Applicable Law, the guiding principle for the choice of law in Denmark is that of party autonomy, and Danish courts generally give effect to commercial contracts’ choice-of-law clauses that stipulate foreign law.

In the absence of a choice of law by the parties, the applicable law is determined by the rules of the country with which the contract is most closely connected. The connection test reflects an individualised approach, meaning that the contract’s closest connection must be identified by considering all relevant connecting factors. Relevant factors can be many and may include, among other things, the parties’ ties to different countries through residence or place of business, the place of negotiation, conclusion and performance of the contract, as well as the forum state. Both circumstances existing prior to and arising after the conclusion of the contract may be taken into account.

The individualised approach is supplemented by presumption rules, and the general presumption rule stipulates that a contract is presumed to have its closest connection with the country where the party that is to perform the obligation characteristic of the contract has its habitual residence or principal place of business at the time of the contract’s conclusion. However, the presumption rules do not apply if circumstances indicate a closer connection to another country.

Danish courts may, in certain cases, apply overriding mandatory rules, notwithstanding the parties’ choice of law. See 1.1 Applicable Law.

Danish courts generally give effect to choice-of-jurisdiction clauses designating a foreign jurisdiction. Where a valid choice-of-jurisdiction clause exists, Danish courts will ordinarily decline jurisdiction and dismiss the case. This applies whether one or both parties are domiciled in Denmark.

Denmark is a signatory to the Recast Brussels Regulation (Regulation (EC) No 1215/2012) on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. In addition, Denmark is a party to the 2005 Hague Convention on Choice of Court Agreements.

Under the Danish Administration of Justice Act, two parties domiciled in Denmark may agree on a choice-of-jurisdiction clause choosing a specific Danish court. If neither party is domiciled in Denmark, the Danish courts may decline jurisdiction where the dispute lacks a genuine and sufficient connection to Denmark.

Parties to a commercial contract may agree on arbitration for existing or future disputes arising out of the contract. Where a valid arbitration agreement exists, the Danish courts will, upon request by a party, stay or dismiss court proceedings and refer the parties to arbitration. Arbitral awards are final on the merits; court review is limited to recognition, enforcement, or set-aside on narrowly defined grounds.

Legislation Governing Arbitration

Arbitration in Denmark is governed by the Danish Arbitration Act, which applies to arbitrations seated in Denmark, including international arbitrations.

The rules of the Danish Institute of Arbitration are widely used in Denmark in both domestic and cross-border disputes and reflect generally accepted Danish and international arbitration practice.

Denmark is a signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Overriding Laws

Certain overriding mandatory provisions may limit the effect of an arbitration agreement in order to protect weaker parties. In consumer contracts, a pre‑dispute arbitration agreement is not binding on the consumer. A consumer may, however, consent to arbitration after a dispute has arisen. This safeguard ensures that consumers are not committed to arbitration before they have had an opportunity to assess their options before the Danish courts.

Under Danish law, a contract is formed and obtains binding effect when an offer is met by an acceptance of that offer. It is a fundamental principle under Danish law that a promise, whether declared verbally or in writing, is binding because the promisor, by making the promise, has declared their will to perform it.

As a general rule, no formalities are required for the conclusion of an effective contract under Danish law; oral agreements are as binding as written ones. However, written offers and acceptances facilitate proof of contract formation and of its terms in the event of disagreement. Despite the freedom of form, certain statutory provisions prescribe that specific types of contracts must be in writing to be valid.

Contracts may also be concluded on standard forms, either on unilaterally drafted terms or on collectively negotiated terms (agreed documents). The two are treated differently by the Danish courts in terms of interpretation.

The concept of culpa in contrahendo is recognised in Danish law as a basis for pre-contractual liability arising from negligent, misleading or otherwise unfair conduct during negotiations or other steps leading up to the conclusion of a contract.

Claims and Remedies

Under Danish law, culpa in contrahendo is treated as a non-contractual form of liability, and the principal remedies follow general tort principles. The primary remedy is damages aimed at protecting the reliance interest, ie, compensation for losses reasonably incurred in reliance on the negotiations, subject to the usual requirements of fault, causation and foreseeability. Depending on the circumstances, restorative measures or injunctive relief may also be available to prevent or remedy misuse of confidential information.

Under Danish law, standard terms and conditions of one party can be incorporated into a commercial contract if the terms are clearly referenced and made available to the other party. It is not sufficient merely to refer to individually drafted terms and conditions without also providing the other party with access to them.

For example, if standard terms are explicitly referred to in an offer and are also attached to it, they will often be accepted form part of the accepted offer and be binding on the parties and incorporated into the contract.

The rules and principles governing the use of standard terms under Danish law apply where an agreement includes pre-formulated contractual terms intended for repeated use – whether drafted unilaterally by one party or jointly negotiated between opposing and equal interest organisations (so-called agreed documents). These rules and principles govern how such terms are incorporated, interpreted and enforced.

Stricter requirements generally apply to establish that one party’s standard terms have been validly incorporated and made binding on the counterparty than would apply to individually negotiated terms. Moreover, standard terms in a contract are often interpreted against the drafter, especially in cases where that party is a consumer.

The threshold for incorporating standard terms into an agreement is higher where such terms are surprising or unusual in nature, or particularly burdensome. Standard terms that impose an unreasonable disadvantage on one party may therefore not be regarded as validly incorporated into the agreement.

Furthermore, the Danish courts have the authority to adjust or set aside terms, in whole or in part, that are unfair or contrary to good faith and fair dealing pursuant to Section 36 of the Danish Contract Act. In practice, the courts exercise restraint when intervening in commercial contracts.

Section 36 of the Danish Contract Act was originally intended to strengthen consumer protection against unfair standard terms, but it operates as an omnibus clause and may also be applied in commercial contexts. Accordingly, unreasonable terms in commercial contracts can, in special cases, be moderated or set aside under Section 36.

Danish law does not provide a single, definitive rule for resolving a “battle of forms”; different approaches may be applied to address such conflict depending on the circumstances.

One commonly applied approach is the “last-shot doctrine”, where the general terms and conditions most recently sent by one party – and not objected to by the other – apply. Essentially, the later-dispatched terms take precedence.

An alternative approach is the “knockout rule”, under which the contract consists only of the provisions on which the parties clearly agreed. Conflicting or inconsistent terms are removed, and any gaps are filled by the applicable background law. This approach emphasises the parties’ mutual consent rather than the timing of form exchanges.

Under Danish law, there are generally no specific form requirements for commercial contracts to be valid, and neither wet-ink original signatures nor notarial deeds are required.

Under Danish law, electronic and digital signatures are recognised as equivalent to wet-ink signatures for the conclusion of commercial contracts. Whether a binding agreement has been formed remains an evidentiary question for the courts, including assessment of the signer’s identity and the authenticity of the declaration of intent. Thus, it is recommended to use a certified signature solution that provides authentication of the signer’s identity.

Official registration is generally not required for the validity of commercial contracts under Danish law. However, for certain types of transactions, registration or recordal is necessary to achieve effectiveness against third parties, establish priority or perfect rights. Compliance with these requirements typically requires a written form, which in many cases may be executed electronically.

Official registration requirements most frequently arise in relation to transactions concerning real estate, security interests over assets, and registered intellectual property rights.

Except as described elsewhere, there are no further requirements apart from the mutual consent to conclude an effective commercial contract under Danish law.

The legal framework governing B2B contracts in Denmark is principally defined by two main statutes: the Danish Contract Act, which governs contract formation, authority and general invalidity, and interpretation doctrines, and the Danish Sale of Goods Act, which regulates sales contracts, including specific rules for commercial sales.

Within B2B relationships, the principle of freedom of contract predominates. Consequently, negotiated terms and standard terms of an agreement often serve as the main governing framework. Depending on the specific transaction, other regimes may also apply, such as late payment rules, competition law, product liability/safety and sector-specific regulations.

For B2C contracts, the Danish Contract Act and the Danish Sale of Goods Act also apply, but consumer contracts and purchases are further subject to mandatory consumer protection provisions within these acts. These mandatory rules cannot be deviated from to the detriment of the consumer. There are additional mandatory consumer protection statutes, including the Danish Consumer Contracts Act and the Danish Marketing Practices Act. These statutes are designed to protect consumers against unfair terms and misleading marketing.

Under Danish law, key consumer protection rights that must be observed in B2C contracts include the following:

• Right of cancellation: For distance and off-premises contracts, consumers generally have a short statutory period to withdraw without giving reasons, subject to certain exceptions.
• Right of complaint (warranty rights): Consumers have the right to raise claims concerning defects in products or services within a specific period after purchase.
• Transparency: Consumers must receive clear and transparent information about the products or services, including information on price, delivery terms and any associated fees.
• Protection against unfair terms: Contract terms that create a significant imbalance to the consumer’s detriment are not binding.

These rights ensure that consumers are protected against unfair commercial practices and can assert claims if problems arise with the purchased product or service.

Under Danish law, the general basis of liability is the culpa rule, which is the principal rule both within and outside contractual relationships. The culpa rule imposes liability for harm caused intentionally or negligently, and, while negligence may be characterised as gross or simple, the culpa rule encompasses all forms of negligence.

Any regime that imposes liability more extensively than culpa (a stricter or heightened liability standard) requires specific justification, typically through statutory provisions or express contractual allocation of risk, including warranties.

Punitive Damages Under Danish Law

Danish law does not provide for punitive damages. Damages are compensatory in nature, aiming to restore the injured party to the position it would have been in had the harmful act not occurred. Punitive damages are not awarded for breach of contract, except where expressly and validly agreed on by the parties.

Statutory Limitations of Liability

Danish law does not prescribe a general, statutory limitation on liability for specific categories of losses. In principle, recoverable losses may include both direct losses and indirect or consequential losses, which may encompass loss of profit. Recovery remains, however, subject to fundamental requirements for liability such as causation, foreseeability and loss mitigation, and any contractually agreed limitations of liability, including liability caps and exclusion of certain types of losses.

Danish law recognises liability without fault (strict liability), primarily on a statutory basis. Statutory strict liability applies within defined areas, including, for example, with regard to environmental damage and product liability.

In a few instances, the Danish courts have imposed strict liability outside statutorily regulated areas; however, the courts’ general approach to non-statutory strict liability remains very cautious.

Between fault-based liability (culpa) and strict liability, Danish law recognises several intermediate forms. An example of this is employers’ vicarious liability, where an employer can be held liable for damage negligently caused by an employee, even if the employer is without fault.

Under Danish contract law, contractually agreed exclusions and limitations of liability are generally enforceable. As a main rule, however, they do not apply in cases of liability arising from intent or gross negligence.

Additionally, certain mandatory, statutory provisions may override agreed exclusions or limitations. Under the Danish Product Liability Act, for instance, liability cannot be excluded or restricted by agreement to the detriment of the injured party or a party that has succeeded to the injured party’s claim.

It should furthermore be noted that the more unusual or far‑reaching a term (including exclusions and limitations of liability), the greater the demand for clarity and transparency.

Standard Terms vs Individually Negotiated Terms

If challenged, terms on exclusions and limitations of liability are interpreted in accordance with general principles of contractual interpretation. This applies equally to standard terms and to individually negotiated terms.

However, stricter requirements are often imposed for establishing that one party’s standard terms have been adopted and are binding on the counterparty, compared to individually negotiated terms. Furthermore, as contra proferentem is a recognised principle under Danish law, ambiguities are typically resolved against the drafter.

Under Danish contract law, force majeure is recognised as a general principle, despite the term “force majeure” not generally being used in central Danish private law statutes. Consequently, a party to a commercial contract may invoke force majeure to obtain relief from performance of its obligations, and exemption from liability of the resulting non-performance, even in the absence of an express force majeure clause.

Where a qualifying force majeure event occurs, the affected party is thus released from its obligation to perform and liability resulting from the non‑performance. The duty to perform is ordinarily suspended for the duration of the impediment; if the impediment is permanent or of prolonged or indefinite duration, the obligation to perform may cease.

Determining what constitutes a force majeure event and assessing its impact on a party’s ability to perform can, however, be challenging in practice.

Although the Danish Sale of Goods Act does not use the term “force majeure”, a seller is not liable for non-performance where failure is due to circumstances that the seller could not reasonably have contemplated at the time of contracting. Such circumstances include accidental destruction of all goods of the kind, war, rebellion, import or export bans, blockades, fire, natural disasters and similar events. The rule is non-mandatory and may be modified or displaced by agreement or trade usage.

Danish commercial contracts often contain force majeure clauses that define qualifying events and their consequences. The absence of such a clause will not, in itself, preclude a party from claiming relief due to force majeure under Danish law.

Danish law does not provide a specific statutory right entitling a party to renegotiate or amend a commercial contract in the event of substantial hardship.

However, Danish law does provide a narrow possibility for relief or adjustment in cases of substantial hardship, in the absence of a specific contractual clause. Beyond the scope of force majeure, Section 36 of the Danish Contract Act allows the Danish courts, in exceptional cases, to set aside or modify a contract or particular terms if enforcing them would be unreasonable or contrary to fair dealing, including where circumstances have changed significantly (for example, prolonged inflation eroding the value of monetary consideration).

Hardship clauses granting a right to renegotiate or amend the contract in the event of substantial hardship are occasionally included in Danish commercial contracts, but they are not considered standard practice.

The absence of a hardship clause would not, in itself, prevent parties from seeking relief under Danish law, but any right to adjustment or exemption is limited and case‑specific.

Warranties

Under Danish law, “warranties” are best understood as express contractual assurances alongside implied conformity obligations, especially under the Danish Sale of Goods Act for sales of goods and under general contract principles for services.

In sales, implied terms include conformity with descriptions and specifications, ordinary quality and fitness (and fitness for a particular purpose if made known and relied upon), and freedom from encumbrances. Commercial buyers must inspect upon receipt and give prompt notice of defects; late notice may curtail remedies, save for latent defects.

For services, a duty of professional diligence (reasonable care and skill) is recognised by general contract law, so parties usually define service levels and acceptance procedures contractually.

Remedies

Under Danish law, the principal remedies available for non-fulfilment, delayed fulfilment or breach of terms include:

• the right to claim specific performance (requiring a party to fulfil its contractual obligations) or, where appropriate, cure;
• a proportionate reduction of the contract price;
• termination for cause; and
• damages.

The specific remedy to be granted will depend on the contractual relationship and the nature and specific circumstances of the breach/non-fulfilment or delayed fulfilment.

The remedies are designed to address the particular breach and restore the injured party either (i) to the position it would have occupied had the contract been properly performed, or (ii) to the position at the time of contracting, as appropriate.

In Denmark, freedom of contract applies. This encompasses both the parties’ rights and obligations as well as the remedies available in the event of breach. In commercial contracts, the parties may therefore generally deviate from the default warranty/conformity and remedy regime under Danish law, as many statutory provisions and general contract principles are non-mandatory.

In practice, parties can, for example, define the scope and duration of warranties/conformity obligations, set notification requirements, specify and prioritise remedies (such as repair, replacement, price reduction or termination), and allocate risk through limitation of liability and liquidated damages clauses.

However, the effectiveness of any deviations depends on clarity, transparency and, to some extent, fairness in outcome. Terms that depart significantly from the Danish background law should be clearly drafted and brought to the other party’s attention. If a term produces an unreasonable result compared with ordinary breach of contract rules, the Danish courts may adjust or set it aside under Section 36 of the Danish Contract Act.

Despite the general freedom of contract, certain mandatory provisions limit the parties’ ability to deviate from the default warranty and remedy regime under Danish law. This is particularly the case in B2C contracts, where consumers are protected under mandatory, statutory provisions. For example, provisions in the Danish Sale of Goods Act on delays and defects are largely mandatory and cannot be derogated from in advance to the detriment of the consumer.