Standard terms by reference: what does the Rototec judgment mean for liability caps?

On 8 April 2026 the Norwegian Supreme Court gave a unanimous judgment in HR-2026-780-A (Rototec) on whether limitations of liability in a supplier’s general terms had become part of a contract. The supplier had stated in its tender that its general terms “apply to this project”, and those terms contained an exclusion of liability and a liability cap. Although the case concerned a construction subcontract, the court framed its reasoning on incorporation and interpretation of standard terms as general principles for contracts between professional parties. The judgment is therefore relevant to SaaS and AI contracts, where supplier terms are frequently brought into the contract through references and hyperlinks. It is part of the material on the contracts topic page. The questions addressed below are what the court held, why the reference did not extend to the limitations of liability, and what suppliers and customers selling or buying technology in Norway should do differently.

What was the Rototec case about?

The case concerned recourse between a main contractor and a subcontractor after subsidence damage caused by drilling for geothermal energy wells. On 5 December 2018 Boligenergi AS engaged Rototec AS to drill 34 energy wells for a housing cooperative in Oslo, under the Norwegian standard subcontract NS 8417 and for a contract price of just under NOK 5 million. The drilling caused subsidence on three properties, and the cost of remedying the damage has been estimated at NOK 100–200 million (paras 4 and 5). Boligenergi and its insurer had been held liable to the housing cooperative and sought recourse against Rototec and its insurer.

The dispute turned on a single sentence in Rototec’s tender, which was listed as a contract document. Under the heading “The client’s obligations”, the tender stated that Rototec’s general terms for energy drilling applied to the project. Clause 5.3 of those terms excluded liability for consequential damage such as subsidence suffered by the client or a third party, and clause 5.4 capped liability “in all circumstances” at the agreed price (paras 38 and 39). The Oslo District Court held that the terms had been accepted, while the Borgarting Court of Appeal reached the opposite conclusion. The Supreme Court dismissed Rototec’s appeal and awarded costs of NOK 1 million for the proceedings before it.

When do standard terms become part of the contract?

The Supreme Court held that the content of a contract is determined through both incorporation and interpretation, and that the two assessments rest largely on the same factors (para 22). It is not decisive whether the standard terms appear in the list of contract documents. A reference in an underlying contract document may suffice, but its reach depends on the “wording, presentation and placement” of the reference (para 23, our translation).

The court identified several factors relevant to both incorporation and interpretation. It matters whether the terms are surprising, unusual or unreasonable, and whether they depart from corresponding provisions in the other contract documents. Less is required to treat standard terms negotiated between industry organisations as part of the contract than terms drafted unilaterally by one party, and the parties’ course of dealing may also be relevant (para 23). On incorporation, the test is what the party relying on the terms had reasonable grounds to expect the other party to have accepted (para 24).

The duty of loyalty applies between professional parties as well, although there is less room for case-specific considerations of fairness. The court described that duty as a fundamental principle which, among other things, protects the balance of the contractual relationship. In the court’s words in paragraph 24, in our translation, the consequence for terms embedded in other documents is as follows.

Attempts to wrap up or hide away an onerous contract term will be contrary to the duty of loyalty and weigh against the term being regarded as accepted, or against it displacing other terms when the contract is interpreted.

Interpretation is objective, with considerable weight on the wording, although the purpose, structure and context of the contract also matter. The court referred to the summary in HR-2026-280-A (Isola) paragraphs 42 and 43, which also states that a party asserting an understanding other than the objective one bears the burden of proving that it was the parties’ common understanding (para 26).

Why did the reference not cover the liability limitations?

The Supreme Court decided the case on interpretation and held that the reference covered only those parts of the terms which concerned the client’s practical obligations. Its placement under “The client’s obligations” connected it to site preparation, such as access, water and electricity, and not to liability (paras 35 to 37). The tender did not otherwise address legal liability (para 38). It was therefore unnecessary to decide whether the terms had been accepted (para 49).

The court gave weight to the fact that the limitations involved a far-reaching reallocation of liability for negligent damage under clause 49.3 of NS 8417. In its view, Rototec ought to have made such an exception visible in the tender, for example under a separate heading on liability for damage (paras 40 and 41). The agreement document also stated that NS 8417 applied with the clarifications and amendments set out in the agreement, none of which concerned the liability provision. If the intention had been to restrict that provision, this “should have been stated expressly” (paras 43 and 44, our translation). The fact that the tender ranked above NS 8417 in the order of precedence did not alter the result.

The ambiguity was resolved against Rototec, which had drafted the tender (para 45). The court did not attach decisive weight to the fact that Boligenergi had previously received the terms and accepted a number of tenders containing the same reference, since the reference had in each case appeared under the same heading (para 47). Rototec had also first invoked the limitations around the turn of 2022 and 2023, although the recourse claim had been notified in November 2019 (para 48).

What does the judgment mean for standard terms in SaaS and AI contracts?

In our assessment, the reasoning in paragraphs 23 and 24 applies equally to IT contracts between businesses, since it is expressed as general principles for professional contractual relationships. SaaS and AI suppliers largely use the same technique as Rototec. An order form or tender refers to the supplier’s standard terms, which in turn refer to linked documents such as usage policies, service-specific terms, service level agreements and data processing agreements. The limitation of liability is often located in one of those documents rather than in the document the parties actually negotiated.

It follows that such terms are most exposed where the reference appears in a context concerned with something else, where the terms have been drafted unilaterally, and where the limitation departs from the main agreement or an agreed standard contract. A practical example is a contract based on one of the Norwegian government standard terms (SSA), where the supplier’s tender or price schedule refers to its own licence terms with a lower liability cap. If the agreement document has not expressly amended the liability provisions of the standard contract, Rototec gives the customer a strong argument that the standard contract prevails. This is of particular relevance to foreign suppliers tendering for Norwegian public contracts with their global terms attached.

The judgment does not establish a general rule that limitations of liability in linked terms fall away. Liability caps are widespread in SaaS contracts, and a clear reference to the terms as a whole will often suffice between professional parties. Standard terms may also bind a customer without a signature, as the Nordlo judgment illustrates. The extent to which a cap holds once it forms part of the contract is discussed in the article on SaaS limitation of liability.

The judgment states Norwegian law. The major international AI providers frequently choose English, Irish or US law in their standard terms, in which case incorporation is governed by the chosen law, as explained in the article on choice of law and jurisdiction. Rototec is of greatest practical importance in relation to Norwegian suppliers, integrators and resellers who pass on global terms without making them visible to the customer.

What should suppliers do?

Suppliers should make the limitation of liability visible to the customer before the contract is concluded. This applies in particular where the customer uses its own standard contract or an industry standard. The following steps reduce the risk that the limitation will not form part of the contract.

1. Place the reference to the standard terms under a separate, neutral heading covering the terms as a whole, and not under a heading on the deliverables or the customer’s obligations.
2. Attach the terms to the tender and include them in the list of contract documents.
3. Restate the liability cap and exclusions in the tender or agreement document itself where they depart from the standard contract.
4. State expressly in the agreement document which provisions of the standard contract are amended.

What should customers do?

Customers should read every reference to the supplier’s terms in tenders, order confirmations and price schedules, including where the main agreement is a familiar standard contract. References that are not intended to apply should be rejected expressly before the contract is concluded, and not only once a claim arises. The order of precedence clause should be checked, because a tender ranked above the standard contract gives the supplier’s terms priority in the event of conflict. Where the supplier can amend its terms unilaterally through hyperlinks, the contract should fix the version that applies and require written acceptance of any changes to liability or rights of use.

In a dispute, the customer should establish when the supplier first relied on the limitation of liability and which basis of liability the supplier contested in its initial correspondence. The Supreme Court gave weight in paragraph 48 to the fact that Rototec did not invoke the limitations until more than three years after the recourse claim had been notified. In the meantime Rototec had only contested liability under clause 49.3 of NS 8417, including in its defence before the District Court in November 2021.

Questions and answers

Next legal review: 30 April 2027