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The village of Búðardalur is situated on the Hvammsfjörður in the north-west of Iceland. The village also lies at the north-eastern end of the Snæfellsnes peninsula.
Búðardalur has about 260 inhabitants and it is a service center for the area.
The village has a long history, dating from the time of the first settlements in Iceland. The name indicates a center of commerce (meaning valley of shops). In 1899, Búðardalur was officially granted the right of commerce. An old house from this time is still existing.
At a short distance from the village lies the site of the former siege of Erik the Red (Eiriksstaðir), who went from there to discover Greenland.