Functional sales is a business model that has steadily seen increased use. This article features, from a life cycle perspective and in a novel way, its legal, environmental, and economic implications. Functional sales has been highlighted to have the potential for promoting the use of more resource-efficient technologies, which may have a positive impact on the provided solution’s environmental and economic performance. However, there are, to our knowledge, few articles published regarding the legal aspects of functional sales and still no laws regulating this type of business model, which can pose barriers to implementing functional sales. Functional sales is in uncharted territory in the legal sphere, and the lack of legal regulation can only, to a certain extent, be overcome by a contract. A contract must consider the relationship to be long-term, and evaluation is important.

In this paper, two different techniques for acquiring lighting representing product sales and functional sales are compared. The case for functional sales is based on the legal foundation of an existing public procurement, while the case for product sales is a likely alternative for lighting purposes. The study shows that there is a trade-off between environmental consequence and economic benefit and that qualitative aspects can be difficult to include in the contract and evaluation.

The conclusion is that the ordinary purchase is supported by long-established rules and regulations so that such a legal transaction (acquisition) is quite conventional and uneventful. However, if the business model changes without a proper legal foundation, the parties of such contracts will find themselves in a legal wilderness, where the outcome of civil litigations is unpredictable. There are ways to circumvent these difficulties, which is demonstrated in this article, as well as the principal advantages of functional sales.