TERMS AND CONDITIONS

XXX GENERAL SALES CONDITIONS FOR GOODS AND SERVICES XXXX

 

THESE TERMS AND CONDITIONS have been agreed upon by ……………………………..and ………………….on this ………………………….day of ………………………………..

NOW THESE TERMS AND CONDITIONS WITNESSETH: 

All offers of Products, including spare parts and davits (hereafter called “Goods”), and /or services (hereafter “service(s)”) between the Purchaser and Vendor will be subject to the conditions set out hereunder. These conditions have precedence over all other documents relating to the products including the Purchaser’s purchase conditions if any unless agreed in a written document signed by both the Purchaser and the Vendor or acknowledged in writing by the Vendor.

• STANDARD CLAUSES FROM THE EUROPEAN ORGANISATION ORGALIME

Save for the special clauses in these general sales conditions, the clauses of the standard ORGALIME S 2012shall apply. In the event of inconsistency between the special clauses and ORGALIME’s clauses, the special clauses shall take precedence. 

SPECIAL CLAUSES

• CONTACT

Each Party shall appoint a contact well versed with the English language, and who shall be in charge of ensuring that the contractual terms have been performed (to include supply of goods and/or services). Should one party change their contact, such a party shall immediately inform the other party of the change. 

The Contact shall have all the necessary powers of attorney and the decisions made by such contact or any person above him in the company’s hierarchy shall be binding on the company for which the Contact acts for. 

Notwithstanding the clause above, if it is otherwise agreed in writing and another person is appointed and accepted by both parties, the clause referred to shall not be applicable. 

• OFFER, ORDER CONFIRMATION

2.2.1 An offer presented by the vendor shall be open for order for 30 days from the date of the offer. Such offer shall not be applicable to orders made after the lapse of thirty days from the date of offer. Notwithstanding this clause, the vendor may accept in writing to vary the 30 days limitation.

1. The vendor shall only be bound by a written order confirmation or beginning of delivery. Unless the purchaser objects via email with acknowledgment of receipt notlater than 7 days after the receipt and at least 5 working days prior to shipment, such purchaser shall be bound by the contents therein. 

• DELAY OF DELIVERY NOT DUE TO THE VENDOR

2.3.1 In the event of delay not caused by the vendor but due to force majeure or due to the purchaser, the purchaser’s contractors or customers, the price shall be adjusted to cover the additional costs that may follow such as the increased production of goods.  If parties do not agree on the increased price, the price revision clause drafted by the United Nations Economic Commission for Europe shall apply. 

2.3.2 In the event of delay of delivery caused by the purchaser, the purchaser’s contractor, customer or end user, the purchaser shall proceed to pay as if such delay had not occurred. 

2.3.3 In the event of delay of delivery caused by the purchaser, the purchaser’s contractor, customer or end user, and in the event such delay results in a claim against the vendor, the purchaser shall defend, indemnify and hold the vendor risk-free from such claim. 

• PAYMENT

1. 1. Late payment

2.4.1.1 In the event of late payment, the purchaser shall pay the overdue payment without delay and upon the vendor’s request present an on first demand guarantee for the remaining installments issued by a bank accepted by the vendor or confirmed by the vendor’s bank. In the absence of such payment or guarantee, the purchaser shall pay all the remaining installments at the request of the vendor.  

2.4.1.2 In the event of late payment, and if the parties have an agreement on a retention warranty bond and/or  a retention warranty amount , the agreement giving the purchaser a right of retention shall automatically be cancelled. 

2.4.1.3 In the event of late payment, the vendor shall be at liberty to postpone any delivery until payment of the outstanding payment and the presentation of the bank guarantee for the outstanding payment.   

2.4.1.4 In the event of late payment, the purchaser shall solely shoulder the cost of debt recovery including legal costs as well as compensation for loss.

2.4.2 THE PURCHASER’S INSOLVENCY

2.4.2.1 In the event insolvency proceedings are instituted against the purchaser or the end user,or if such proceedings are not commenced due to insufficient assets, the vendor shall have the right to terminate the contract altogether unless the purchaser presents an on first demand bank guarantee for confirmation by the vendor’s bank for any overdue payment and remaining outstanding payment issued on behalf of the purchser of third party.  

In the event of such a termination the purchaser shall pay as in the case of force majeure and shall undertake to hold the vendor risk free. 

2.4.2.2 The same rights and duties shall be applicable in the event of cancellation of vessel by the purchaser’s customer, end user or persons associated as such. 

2.5LIABILITY FOR DEFECTS OR DEFECTIVE SERVICES (WARRANTY)

2.5.1 Warranty

The Vendor guarantees the Goods for any defects or lack of conformity to the agreed terms resulting from faulty design, materials or workmanship in accordance with the standard and special clauses. 

2.5.2 Unjustified warranty claim

2.5.2.1 2 The Purchaser is under an obligation to properly examine whether a warranty claim is covered by the vendor’s warranty. 

A warranty claim is not justified when the claim is not covered by the warranty. 

2.5.2. If a product is repaired by the vendor or a third party on behalf of the vendor related to an unjustified warranty claim from the Purchaser, the vendor shall invoice the purchaser for the cost of the repair and the purchaser shall pay. 

2.5.2.3 The invoice shall be inclusive of the cost of repair, replacement and all incidental costs including travelling and living allowances for the persons making the repairs and replacements as well as labour costs for working and travel time.  

Travel time shall be computed at the same rate for work time. This computation shall also be applicable to repair crew’s waiting time necessitated by the purchaser or a person affiliated to the purchaser. 

2.5.2.4 In the event of an unjustified warranty claim, the purchaser shall pay the invoice and defend, indemnify the vendor and ensure the vendor is held risk free from any unjustified claim from a customer in the chain of contracts from the purchaser to the end user. 

2.5.2.5 If the Vendor is of the opinion that the claim is unjustified because the defect in question is not within the terms of the warranty, the vendor may ask for advance payment and repairs or replacement shall not begin until such advance payment is made, without any liability to the vendor.

If the claim is proven justified, the vendor shall refund the Purchaser for the advance payment. 

2.5.2.6 If a Purchaser performs repairs not expressly authorized by the vendor, the vendor shall not bear responsibility or liability unless the said vendor agrees to the said repairs in writing. 

2.5.3 DEFECTIVE PARTS COVERED BY THE WARRANTY ANDREPLACED BY OR FOR THE VENDOR

Defective goods shall be stocked at the Purchaser’s premises for inspection by the vendor. After a reasonable time which shall not be less than 30 days, the purchaser may request that such defective parts be destroyed. The purchaser shall not however be at liberty to destroy the parts if the vendor undertakes to cover the expenses incurred or requests that the goods be sent to the vendor or another place specified by the vendor at the vendor’s expense. 

If legal proceedings occur or there is a potential occurrence of such proceedings, the defective parts shall be stored at the Purchaser’s premises and expense as long as it is required for the proceedings. 

2.5.4 SERVICES TO BE DONE UNDER THE WARRANTY COVERAGE OF ADDITIONAL COSTS

 

The purchaser shall cover travel and living expenses for the persons performing repairs and replacements when the products being repaired are at a place outside the vendor’s locale . The purchaser shall also cover travel and waiting time according to the vendor’s “Rates and Conditions for Service Personnel.”

The purchaser shall by himself or through any instructed affiliate party having control over the vessel, position and prepare the vessel for warranty repair on behalf of the vendor. Should there be a delay and waiting time for the service personnel, the purchaser shall also cover the costs.  

2.5.5 LIMITATIONS OF LIABILITY

2.5.5.1 The Vendor shall only bear responsibility when in charge of a service and the said service is carried out by the vendor or a person specifically appointed by the vendor. The vendor shall further bear no responsibility for damages, injury or death due to the purchaser’s or any other third party’s passive acts to include lack of maintenance, incorrect installation and or faulty repair. 

2.5.5.2 The Vendor shall bear no obligation for defects, damages or death caused by compliance with the Purchaser’s technical specifications or any person associated to the purchaser in relation to the supply. If any breach is brought against the vendor, the Purchaser shall defend and indemnify the vendor. 

2.5.5.3 The Purchaser shall only utilize original spare parts specifically provided by the vendor. The vendor shall bear no liability for malfunction, damages, injury or death caused by the use of non-original parts or late order of original spare parts. If action is brought against the vendor for these reasons, the purchaser shall defend, indemnify and hold the vendor risk free. 

The purchaser shall undertake to order spare parts in good time to avoid lack of maintenance unless the vendor is in charge of such maintenance based on a written agreement. Spare parts ordered and delivered shall not be returnable. 

2.6 ADDITIONAL CONDITIONS FOR SERVICES

2.6.1 Services offered may include special design work and/or special engineering that may be requested by the purchaser to include commissioning, testing, maintenance and/or upgrading. Such services shall be subject to the agreed contractual terms. 

2.6.2 Supply of services shall be invoiced according to the Vendor’s periodic “Rates and Conditions for Service Personnel” which are applicable at the date of the performance of the service. 

2.6.3 The Purchaser shall give a clear description of the service that they are desirous to receive for the purposes of sending the right service personnel, deciding the date and place of performance and ordering of special utilities where such are required. Costs incurred due to the purchaser’s lack of clear description shall be borne by the purchaser. 

2.6.4 When requesting a Service, the Purchaser shall provide the Vendor with a clear description of the Service to be performed for purposes of ensuring the right service personnel is sent, choosing the date and place of execution as well as ordering special and spare parts where necessary. The Purchaser will also pay for additional labor costs caused by an unclear description of the service. 

2.6.5 The Purchaser shall provide utilities such as water, electricity and machineries as well as technical local assistance and interpreters at the locale where the service shall be performed unless the people at the place have good knowledge of the English language or a Scandinavian language for the performance of the service.

Where necessary, the purchaser shall actively provide and/or facilitate all required public authorizations from the immigration authority and/or any other authority which is necessary to enable a smooth implementation of the service. 

In the event these obligations are breached, the purchaser shall be liable for the consequences including costs and shall defend, indemnify and hold the supplier risk free. 

2.6.6 Knock for knock: Each Party shall indemnify the other in the event of a claim addressed to the other party for the former party’s property and /or personal injury to or loss of the life of his staff regardless of the culpability of the other party. 

Each party shall obtain an insurance cover from a reputable insurance firm covering damages, injuries and loss of life. The insurance policy shall not contain any subrogation right to the insurance company’s benefit against the other party. 

2.6.7 The Purchaser shall control the implementation process of the service such that they may request a test if necessary, draft a report then sign it and also require the head of the service to sign the report. Unless it is expressly noted in the report that the service was not satisfactorily done, the report shall be deemed as properly done and the Purchaser shall not hold the Vendor liable thereafter. 

2.7 FORCE MAJEURE

In the event the  Vendor is unable to fulfill the contractual terms due to force majeure or in the event a contract is terminated due to force majeure, the purchaser shall pay the vendor pro rata for the deliveries made and/or the services rendered. In the case of a supplied service, the Purchaser shall also pay the Vendor the costs of the service personnel as in Article 2.10.2.2.

2.8 APPLICABLE LAW, DISPUTE RESOLUTION

2.8.1 The conditions set out herein shall be governed by the United Nations Convention on Contracts for the International Sale of Goods (1980). When the said law is insufficient, it shall be supplemented by the law of the vendor’s country for legal fields outside the domain of the Convention. 

2.8.2 In the event the Purchaser alleges non-compliance, the parties shall accept the appointment of independent technical expert Det norske Veritas Germanischer Lloyd (DNV GL) which shall be done at the request of one of the parties. The expert shall thereafter present a report in English on the alleged non-compliance and give an opinion thereon. This opinion will not bind the parties herein unless there is an express written agreement citing that the opinion shall be binding. Any party may therefore proceed directly to the competent jurisdiction or arbitration. 

The Purchaser will be tasked with facilitating the examination by the expert and the failing party shall cover the fees and costs of the expert. If the expert is of the opinion that both parties are liable, the parties shall share the burden equally. 

2.8.3 If the Purchaser hails from a European State which has ratified the Lugano Convention on the enforcement of judgments, any dispute in connection these conditions and any matter related to contractual and commercial transactions shall be settled by the court at the Vendor’s locale. 

If the Purchaser hails from any other state, the dispute shall be settled by fast-track arbitration in accordance with the Rules of the Arbitration and Dispute Resolution Institute of the Oslo Chamber of Commerce. If a Party declines to show up but sends the reports asked for by the arbitral council, pays the administrative expenses or advance payment  to the tribunal  or follows the arbitral procedure and rules, the tribunal shall settle the dispute solely on the documentation provided.

As an exception to the arbitration clause, the Vendor may request interlocutory measures or institute debt recovery procedures including litigation at the court of its place or that of the Purchaser. The Purchaser shall bear all the costs of the entire debt recovery procedure. 

Both parties consent to mediation solution, arbitral decision or court decision may automatically be executed in all countries and in particular where the relevant party has assets. The parties further undertake not to oppose the enforcement of such decision. In regard to costs, the losing party shall bear all the costs of the winning party. However, the tribunal may be at liberty to alter the legal costs if the winning party does not win all its claims. 

 

2.9 CHANGE ORDER

The provisions hereunder do not cover termination and/or cancellation of a contract. However, they set out the obligations of the parties related to the Purchaser’s change order such as a modification request due to a changed / new technical requirement. 

2.9.1 A purchaser shall be entitled to demand a change of quality in the goods, quantity or characteristics as well as change of the time schedule if such change is directed at improving the product. However, the change requested shall be reasonable and not beyond what could have been expected at the date of the signature of the Order Confirmation. 

2.9.2 If a Purchaser increases the work or order to be done by the Vendor, the Purchaser shall pay the additional costs upon being supplied with the additional invoice. The price shall be adjusted according to the prices and labour costs agreed upon at the date of the performance of the change of order. 

2.9.3 If the Vendor is not in a position to fulfill the increase in the requested time, he shall promptly inform the Purchaser and propose another time limit. This time shall be deemed contracted unless the parties expressly agree on another timeline or the Purchaser withdraws his change order and promptly notifies the Vendor. 

2.9.4 If the Vendor receives instructions from the Purchaser to reduce or suspend the work order, the Vendor shall immediately cease production on the part of the order which can be ceased and also use his best strategies to reduce his costs and also inform the Purchaser of the new costs within a reasonable time frame. 

The Purchaser shall pay for the Vendor’s costs that cannot be minimized such as manufactured goods on stock and performed services, goods partly manufactured and all ordered components of materials. These costs are also inclusive of those incurred in laying off personnel, cancelling sub contracts and the administrative costs of changing the order. 

2.9.6 The delivery time shall remain the same notwithstanding the change, unless parties expressly agree on changes thereof. 

2.9.7 In the event of change of order, the Purchaser shall hold the Vendor risk free. 

2.10 TERMINATION OF CONTRACT

2.10.1 Termination

Either Party (the Requesting Party) may terminate the contract with immediate effect if;

2.10.1.1 A receiver has been appointed over any of the other party’s assets, suffers insolvency or enters into liquidation. Further, if a bankruptcy petition has been filed against him or if he enters into an arrangement with his creditors. 

2.10.1.2 The other Party defaults in payment or breaches a fundamental breach of contractual terms or if the party does not rectify material breach within the agreed time frame which shall not be less than 15 days unless the breach cannot be rectified.

2.10.1.3 A party has the right to cancel the contract according to the law of contract. 

2.10.2 Cancellation by the Purchaser

2.10.2.1 Supply of Goods: Notwithstanding the likelihood of termination as indicated by 

Article 2.10.1, the Purchaser may opt out of a contract upon satisfying the following conditions;

1. a) Payment of 10 % of the EXW estimation of the agreement value (EXW most recent Incoterms) for cancellation 9 months before the actual delivery date. 
2. b) Payment of 20% of the EXW value of the contract price for cancellation 6 months before the agreed delivery date. 
3. c) Payment of 100% of the agreement cost should there be cancellation later unless it is agreed in writing on compensation. 

 

10.2.2. SUPPLY OF SERVICES

The Purchaser shall cover all the costs incurred in hiring personnel, the costs for cancellation of travel and all costs related to return of personnel who may have been dispatched including the labour costs for working, waiting and travel time. 

10.2.3 The Purchaser cancelling the contract shall defend, indemnify and hold the Vendor risk free in the event of a cancellation. 

 

ORGALIME

GENERAL CONDITIONS

For the

SUPPLY OF MECHANICAL, ELECTRICAL AND ELECTRONIC PRODUCTS

XXXX

REAMBLE

1. These General Conditions shall apply when the parties agree In Writing or otherwise thereto. Any modifications of or deviations from them must be agreed In Writing.

DEFINITIONS

1. In these General Conditions the following terms shall have the meanings hereunder assigned to them: – “Contract”: the agreement In Writing between the parties concerning supply of the Product and all appendices, including agreed amendments and additions In Writing to the said documents; 

– “Gross Negligence”: an act or omission implying either a failure to pay due regard to serious consequences, which a conscientious contracting party would normally foresee as likely to ensue, or a deliberate disregard of the consequences of such an act or omission;

– “In Writing”: communication by document signed by both parties or by letter, fax, electronic mail and by such other means as are agreed by the parties;

– “the Product”: the object(s) to be supplied under the Contract, including software and documentation

PRODUCT INFORMATION

1. All information and data contained in general product documentation and price lists shall be binding only to the extent that they are by reference In Writing expressly included in the Contract.

DRAWINGS AND TECHNICAL INFORMATION

1. All drawings and technical documents relating to the Product or its manufacture submitted by one party to the other, prior or subsequent to the formation of the Contract, shall remain the property of the submitting party. Drawings, technical documents or other technical information received by one party shall not, without the consent of the other party, be used for any other purpose than that which they were provided. They may not, without the consent of the submitting party, otherwise be used or copied, reproduced, transmitted or communicated to a third party.
2. The Supplier shall, not later than at the date of delivery, provide free of charge information and drawings which are necessary to permit the Purchaser to install, commission, operate and maintain the Product. Such information and drawings shall be supplied in the number of copies agreed upon or at least one copy of each. The Supplier shall not be obliged to provide manufacturing drawings for the Product or for spare parts.

TESTS BEFORE SHIPMENT 

6. If   tests   before   shipment   are   provided   for   in   the  Contract  they  shall,  unless  otherwise  agreed,  be  carried  out  at the place of manufacture during normal working hours. If    the    Contract    does    not    specify   the   technical   requirements,  the  tests  shall  be carried  out  in  accordance  with  general  practice  in  the  appropriate  branch  of  industry  concerned in the country of manufacture. 
7. The Contractor shall notify the Purchaser In Writing of these  tests  in  sufficient  time  to  permit  the  Purchaser  to  be  represented  at  the  tests.  If  the  Purchaser  is  not  represented,  the  test  report  shall  be  sent  to  the  Purchaser  and  shall  be  accepted as accurate. 
8. If the tests show the Plant not to be in accordance with the Contract, the Contractor shall without delay remedy any deficiencies  in  order  to  ensure that  the  Plant  complies  with  the  Contract.  New tests shall then be carried out at the Purchaser’s request, unless the deficiency was insignificant. 
9. The Contractor shall bear all costs for tests carried out at the place of manufacture.  The Purchaser shall however bear all travelling and living expenses for his representatives in connection with such tests.

PREPARATORY WORK AND WORKING CONDITIONS 

10. The Contractor shall provide in good time drawings showing the manner in which the Plant is to be erected, together with all information required for preparing suitable foundations, for providing access for the Plant and any necessary equipment to the point where the Plant is to be erected, and for making all necessary connections to the Works. 
11. The Purchaser shall provide in good time all installations, and ensure that the conditions necessary for the erection of the Plant and for the correct operation of the Works are fulfilled. This shall not apply to preparatory work that according to the Contract shall be performed by the Contractor. 
12. The preparatory work shall be carried out by the Purchaser in accordance with the drawings and information provided by the Contractor under Clause 10. The work shall be completed in good time. In any case, the Purchaser shall ensure that the foundations are structurally sound. If the Purchaser is responsible for transporting the Plant to the Site, he shall ensure that the Plant is on the Site in good time. 
13. If an error or omission in the drawings or information referred to in Clause 10 is discovered by the Contractor or notified to him In Writing before expiry of the period referred to in Clause 52, the cost of any necessary remedial work shall be borne by the Contractor. 
14. The Purchaser shall ensure that: 
15. a) The Contractor’s personnel are able to start work in accordance with the agreed time schedule and to work during normal working hours. Provided that the Purchaser has been given notice In Writing in reasonable time, work may be performed outside normal working hours to the extent deemed necessary by the Contractor. 
16. b) He has, in good time before erection is started, informed the Contractor In Writing of all relevant safety regulations in force at the Site. The erection shall not be carried out in unhealthy or dangerous surroundings. All the necessary safety and precautionary measures shall have been taken before erection is started and shall be maintained. 
17. c) The Contractor’s personnel are able to obtain suitable and convenient board and lodging in the neighborhood of the Site and have access to internationally acceptable hygiene facilities and medical services. 
18. d) He has made available to the Contractor free of charge at the proper time on the Site all necessary cranes, lifting equipment and equipment for transport on the Site, auxiliary tools, machinery, materials and supplies (including fuel, oils, grease and other materials, gas, water, electricity, steam, compressed air, heating, lighting, etc…), as well as the measuring and testing instruments of the Purchaser available on the Site. The Contractor shall specify In Writing his requirements concerning such cranes, lifting equipment, measuring and testing instruments and equipment for transport on the Site at the latest one month before the start of the erection. 
19. e) He has made available to the Contractor free of charge necessary storage facilities, providing protection against theft and deterioration of the Plant, the tools and equipment required for erection, and the personal effects of the Contractor’s personnel. 
20. f) The access routes to the Site are suitable for the required transport of the Plant and the Contractor’s equipment. 

PURCHASER’S DEFAULT 

15. If the Purchaser anticipates that he will be unable to carry out in time his obligations necessary for completion of the Works, including complying with the conditions specified in Clauses 11, 12 and 14, he shall forthwith notify the Contractor In Writing, stating the reason and, if possible, the time when he will be able to comply with his obligations. 
16. Without prejudice to the Contractor’s rights under Clause 17, if the Purchaser fails to fulfil, correctly and in time, his obligations necessary for completion of the Works, including complying with the conditions specified in Clauses 11, 12 and 14, the following shall apply: 
17. a) the Contractor may at his own discretion choose to carry out or employ a third party to carry out the Purchaser’s obligations, or otherwise take such measures as under the circumstances are appropriate in order to avoid or alleviate the effects of the Purchaser’s default. 
18. b) The Contractor may suspend in completely or in part his performance of the Contract. He shall forthwith notify the Purchaser In Writing of the suspension. ) if the Plant has not been delivered to the Site, the Contractor shall arrange for storage of the Plant at the Purchaser’s risk. The Contractor shall also, if the Purchaser so requires, insure the Plant. 
19. d) if performance of the Contract is delayed by the Purchaser’s default, he shall nevertheless pay any part of the Contract Price which, but for such delay, had become due. 
20. e) the Purchaser shall reimburse the Contractor for any costs not covered by Clause 44 or 45, which are reasonably incurred by the Contractor as a result of measures under a), b) or c) of this Clause. 
21. If completion of the Works is prevented by the Purchaser’s default as referred to in Clause 16, and this is not due to any such circumstance as mentioned in Clause 67, the Contractor may also by notice In Writing require the Purchaser to remedy his default within a final reasonable period. If, for any reason for which the Contractor is not responsible, the Purchaser fails to remedy his default within such period, the Contractor may by notice In Writing terminate the Contract. The Contractor shall then be entitled to compensation for the loss he suffers because of the Purchaser’s default. The compensation shall not exceed the Contract Price. 

LOCAL LAWS AND REGULATIONS 

18. The Contractor shall ensure that the Works are carried out and are in accordance with any laws, regulations and rules which are applicable to the Works. If required by the Contractor, the Purchaser shall provide the relevant information on these laws, regulations and rules In Writing. 
19. The Contractor shall carryout any variation work caused by changes in laws, regulations and rules referred to in Clause 18, or in their generally accepted interpretation, occurring between the dates of submission of the tender and taking-over. The Purchaser shall bear the extra costs and other consequences resulting from such changes, including variation work. 
20. If the parties are unable to agree on the extra costs and other consequences of changes in laws, regulations and rules, referred to in Clause 18, the Contractor shall be compensated on a time basis for any variation work until the dispute has been settled in accordance with Clause 72. 

VARIATIONS 

21. to the provisions of Clause 25, the Purchaser is entitled to require variations to the scope, design and construction of the Works until the Works have been taken over. The Contractor may suggest such variations In Writing. 
22. Requests for variations shall be submitted to the Contractor In Writing and shall contain an exact description of the variation required. 
23. As soon as possible after receipt of a request for a variation or after having himself made a proposal for a variation, the Contractor shall notify the Purchaser In Writing whether and how the variation can be carried out, stating the resulting alteration to the Contract Price, the time for completion and other terms of the Contract. The Contractor shall also give such notice to the Purchaser when variations are required as a result of changes in laws, regulations and rules referred to in Clause 18. 
24. If completion of the Works is delayed as a result of disagreement between the parties on the consequences of variations, the Purchaser shall pay any part of the Contract Price which would have become due if the Works had not been delayed. 
25. Save as provided in Clause 19, the Contractor shall not be obliged to carry out variations required by the Purchaser until either the parties have agreed on how the variations will affect the Contract Price, the time for completion and other terms of the Contract, or the dispute has been settled in accordance with Clause 72. 

 

PASSING OF RISK 

26. The risk of loss of or damage to the Plant shall pass to the Purchaser in accordance with any agreed trade term, which shall be construed in accordance with the INCOTERMS in force at the date of formation of the Contract. 

if no trade term is specifically agreed, delivery of the Plant shall be Ex works (EXW). Any risk of loss or damage to the Works not covered by the first paragraph of this Clause shall pass to the Purchaser on taking-over of the Works. Any loss or damage to the Plant and Works after the risk has passed to the Purchaser shall be at the risk of the Purchaser, unless such loss or damage results from the Contractor’s negligence. 

TAKING-OVER TESTS 

27. When erection has been completed taking-over tests shall, unless otherwise agreed, be carried out to determine whether the Works are as required for taking-over according to the Contract. The Contractor shall notify the Purchaser In Writing that the Works are ready for taking-over. He shall in this notice give a date for taking-over tests, giving the Purchaser sufficient time to prepare for and be represented at these tests. The Purchaser shall bear all costs of taking-over tests. The Contractor shall, however, bear all costs relating to his personnel and his other representatives. 
28. The Purchaser shall provide free of charge any power, lubricants, water, fuel, raw materials and other materials required for the taking-over tests and for final adjustments in preparing for these tests. He shall also install free of charge any equipment and provide any labor or other assistance necessary for carrying out the taking-over tests. 
29. If, after having been notified in accordance with Clause 

27, the Purchaser fails to fulfil his obligations under Clause 

28 or otherwise prevents the taking-over tests from being carried out, the tests shall be regarded as having been satisfactorily completed at the date for taking-over tests stated in the Contractor’s notice. 

The taking-over tests shall be carried out during normal working hours. If the Contract does not specify the technical requirements, the tests shall be carried out in accordance with general practice in the appropriate branch of industry concerned in the Purchaser’s country. 

31. The Contractor shall prepare a test-report of the taking-over tests. This report shall be sent to the Purchaser. If the Purchaser has not been represented at the taking-over tests after having been notified in accordance with Clause 27, the test report shall be accepted as accurate. 
32. If the taking-over tests show the Works not to be in accordance with the Contract, the Contractor shall immediately remedy the deficiencies. If the Purchaser so requires In Writing without undue delay, new tests shall be carried out in accordance with Clauses 27-31. This shall not apply when the deficiency was insignificant. 

TAKING-OVER 

33. Taking-over of the Works takes place :
34. a) when the taking-over tests have been satisfactorily completed or are regarded under Clause 29 as having been satisfactorily completed, or 
35. b) where the parties have agreed not to carry out taking-over tests, when the Purchaser has received a Contractor’s notice In Writing that the Works have been completed, provided that the Works are as required for taking-over according to the Contract. Minor deficiencies which do not affect the efficiency of the Works shall not prevent taking-over. 
36. The Purchaser is not entitled to use the Works or any part thereof before taking-over. If the Purchaser does so without the Contractor’s consent In Writing, he shall be deemed to have taken over the Works. The Contractor shall then be relieved of his duty to carry out taking -over tests. 
37. As soon as the Works have been taken over in accordance with Clause 33 or 

34, th

 

 

 

 

 

e period, referred to in Clause 52, shall start to run. The Purchaser shall, at the Contractor’s request In Writing, issue a certificate stipulating when the Works have been taken over. The Purchaser’s failure to issue a certificate shall not affect taking-over according to Clauses 33 and 34. 

COMPLETION. CONTRACTOR’S DELAY 

The Works shall be considered as completed when they are taken over in accordance with Clause 33 or 34. 

37. If the parties instead of specifying the date for completion, have specified a period of time on the expiry of which taking-over shall take place, such period shall start to run as soon as the Contract is entered into, all official formalities have been completed, payments due at the formation of the Contract have been made, any agreed securities have been given and any other preconditions have been fulfilled. 
38. If the Contractor anticipates that he will not be able to comply with his obligations within the times specified in the Contract, he shall forthwith notify the Purchaser thereof In Writing, stating the reason, and, if possible, when compliance can be expected. If the Contractor fails to give such notice, the Purchaser shall be entitled to compensation for any additional costs which he incurs and which he could have avoided had he received such notice. 
39. The Contractor shall be entitled to an extension of the time for completion if delay occurs :
40. a) because of any of the circumstances referred to in Clause 67, or 
41. b) as a result of variation work under Clause 19, or 
42. c) as a result of variations under Clauses 21-25, or 
43. d) as a result of suspension under Clauses 16, 47 or 70, or 
44. e) by an act or omission on the part of the Purchaser. 

The extension shall be reasonable having regard to all the circumstances. This provision applies regardless of whether the reason for the delay occurs before or after the agreed time for completion. 

40. The Contractor is in delay when the Works are not completed at the time for completion as defined in Clauses 36, 37 and 39. The Contractor’s delay entitles the Purchaser to liquidated damages from the date on which the Works should have been completed. The liquidated damages shall be payable at a rate of 0.5 per cent of the Contract Price for each completed week of delay. The liquidated damages shall not exceed 7.5 per cent of the Contract Price. If only part of the Works is delayed, the liquidated damages shall be calculated on that part of the Contract Price, which is attributable to such part of the Works as cannot in consequence of the delay be used as intended by the parties. The liquidated damages become due at the Purchaser’s request In Writing but not before taking-over or termination of the Contract under Clause 41. The Purchaser shall forfeit his right to liquidated damages if he has not lodged a claim In Writing for such damages within six months after the time when completion should have taken place. 
41. If the Contractor’s delay is such that the Purchaser has become entitled to the maximum liquidated damages under Clause 40 and the Works are still not completed, the Purchaser may demand In Writing completion within a final reasonable period which shall not be less than one week. If the Contractor does not complete the Works within such final period and this is not due to any circumstance for which the Purchaser is responsible, then the Purchaser may by notice In Writing to the Contractor terminate the Contract in respect of such part of the Works which, due to the Contractor’s failure, cannot beused as intended by the parties. If the Purchaser terminates the Contract he shall be entitled to compensation for the loss he has suffered as a result of the Contractor’s delay. The total compensation, including the liquidated damages which are payable under Clause 40, shall not exceed 15 per cent of that part of the Contract Price which is attributable to the part of the Works in respect of which the Contract is terminated. The Purchaser shall also have the right to terminate the Contract by notice In Writing to the Contractor, if it is clear from the circumstances that there will occur a delay in completion of the Works that, under Clause 40 would entitle the Purchaser to maximum liquidated damages. In case of termination on this ground, the Purchaser shall be entitled to maximum liquidated damages and compensation under the third paragraph of this Clause 41. 
42. Liquidated damages under Clause 40 and termination of the Contract with limited compensation under Clause 41 are the only remedies available to the Purchaser in case of delay on the part of the Contractor. All other claims against the Contractor based on such delay shall be excluded, except where the Contractor has been guilty of Gross Negligence. 

PAYMENT 

43. Unless otherwise agreed, payment shall be made within 

30 days from the date of the invoice as follows: 

1. a) when erection is carried out on a time basis :

– one third of the agreed price for the Plant at the formation of the Contract, 

– one third when the Contractor notifies the Purchaser that the Plant, or the essential part of it, is ready for dispatch from the place of manufacture and 

– the final third on arrival of the Plant at the Site. Payment for erection shall be made against monthly invoices 

1. b) when erection is included in the lump sum Contract Price :

– 30 per cent of the Contract Price at the formation of the Contract, 

– 30 per cent when the Contractor notifies the Purchaser that the Plant, or the essential part of it, is ready for dispatch from the place of manufacture, 

– 30 per cent on arrival of the Plant at the Site, 

– the remaining part of the Contract Price on taking-over. 

44. When erection is carried out on a time basis the following items shall be separately charged :
45. a) all travelling expenses incurred by the Contractor in respect of his personnel and the transport of their equipment and personal effects (within reasonable limits) in accordance with the specified method and class of travel where these are specified in the Contract. 
46. b) cost of board and lodging and other living expenses, including any appropriate allowances, of the 

Contractor’s personnel for each day’s absence from their homes, including non-working days and holidays. 

1. c) the time worked, which shall be calculated by reference to the number of hours certified as worked in the time-sheets signed by the Purchaser. Overtime and work on Sundays, holidays and at night will be charged at special rates. The rates shall be as agreed in the Contract, or, failing agreement, as normally charge

d by the Contractor. Save as otherwise provided, the hourly rates cover the wear and tear of the Contractor’s tools and light equipment. 

1. d) time necessarily spent on :

– preparation and formalities incidental to the outward and homeward journeys, 

– the outward and homeward journeys and other journeys to which the personnel are entitled in accordance with current law, regulations or collective agreements in the Contractor’s country, 

– daily travel between lodgings and the Site, if it exceeds half an hour each way and there are no suitable lodgings closer to the Site, 

– waiting when work is prevented by circumstances for which the Contractor is not responsible under the Contract, all at the same rates as referred to in c). 

1. e) any expenses incurred by the Contractor in accordance with the Contract, in connection with the provision of equipment by him, including where appropriate a charge for the use of the Contractor’s own heavy equipment. 
2. f) any taxes or dues levied on the invoice and payable by the Contractor in the country where erection takes place. 
3. When erection is to be carried out for a lump sum, the quoted price shall be deemed to include all the items mentioned in Clause 44, a) through e). If the erection is delayed due to a cause for which the responsibility rests with the Purchaser or any of his contractors other than the Contractor, the Purchaser shall compensate the Contractor for :
4. a) waiting time and time spent on extra journeys. 
5. b) costs and extra work resulting from the delay, including removing, securing and setting up erection equipment. 
6. c) additional costs, including costs as a result of the Contractor having to keep his equipment at the Site for a longer time than expected. 
7. d) additional costs for journeys and board and lodging for the Contractor’s personnel. 
8. e) additional financing costs and costs of insurance. 
9. f) other documented costs incurred by the Contractor as a result of changes in the erection programme. 
10. Whatever the means of payment used, payment shall not be deemed to have been effected before the Contractor’s account has been fully and irrevocably credited. 
11. If the Purchaser fails to pay by a stipulated date, the Contractor shall be entitled to interest from the day on which payment was due. The rate of interest shall be as agreed between the parties. If the parties have not agreed on the rate of interest, it shall be 8 percentage points above the rate of the main refinancing facility of the European Central Bank in force on the due date of payment. 

In case of late payment the Contractor may, after having notified the Purchaser In Writing, suspend his performance of the Contract until he receives payment. If the Purchaser has not paid the amount due within three months, the Contractor shall be entitled to terminate the Contract by notice In Writing to the Purchaser and to claim compensation for the loss he has incurred. The compensation shall not exceed the Contract Price. 

RETENTION OF TITLE 

48. The Plant shall remain the property of the Contractor until paid for in full, including payment for the erection of the Plant, to the extent that such retention of title is valid under the applicable law. 

The Purchaser shall at the request of the Contractor assist him in taking any measures necessary to protect the Contractor’s title to the Plant in the country concerned. The retention of title shall not affect the passing of risk under Clause 26. 

LIABILITY FOR DAMAGE TO PROPERTY BEFORE TAKING-OVER 

49. The Contractor shall be liable for any damage to the Works which occurs before the risk has passed to the Purchaser. This applies irrespective of the cause of the damage, unless the damage has been caused by the Purchaser or anyone for whom he is responsible in connection with performance of the Contract. Even if the Contractor is not liable for the damage to the Works in accordance with this Clause, the Purchaser may require the Contractor to remedy the damage at the Purchaser’s cost. 
50. The Contractor shall be liable for damage to the Purchaser’s property occurring before taking-over of the Works only if it is proved that such damage was caused by negligence on the part of the Contractor or anyone for whom he is responsible in connection with the performance of the Contract. The Contractor shall however under no circumstances be liable for loss of production, loss of profit or any other consequential economic loss. 

LIABILITY FOR DEFECTS 

51. Pursuant to the provisions of Clauses 52-65 inclusive, the Contractor shall remedy any defect or non-conformity (hereinafter termed defect(s))in the Works resulting from faulty design, materials or workmanship. 
52. The Contractor’s liability is limited to defects in the Works which appear within a period of one year from taking-over. If the daily use of the Works exceeds that which is agreed, this period shall be reduced proportionately. If taking-over has been delayed for reasons for which the Purchaser is responsible, the Contractor’s liability for defects shall not, except as stated in Clause 53, be extended beyond 18 months after delivery of the Plant. 
53. When a defect in a part of the Works has been remedied, the Contractor shall be liable for defects in the repaired or replaced part under the same terms and conditions as those applicable to the original Works for a period of one year. For the remaining parts of the Works the period mentioned in Clause 52 shall be extended only by a period equal to the period during which the Works have been out of operation as a result of the defect. 
54. The Purchaser shall without undue delay notify the Contractor In Writing of any defect which appears. Such notice shall under no circumstance be given later than two weeks after the expiry of the period given in Clause 52. The notice shall contain a description of the defect. If the Purchaser fails to notify the Contractor In Writing of a defect within the time-limits set forth in this Clause, he loses his right to have the defect remedied. 

Where the defect is such that it may cause damage, the Purchaser shall immediately inform the Contractor In Writing. The Purchaser shall bear the risk of damage resulting from his failure so to notify. 

55. On receipt of the notice under Clause 54, the Contractor shall remedy the defect without undue delay and at his own cost as stipulated in Clauses 51-65 inclusive. Repair shall be carried out at the Site, unless the Contractor deems it appropriate that the defective part or the Plant is returned to him for repair or replacement. Where remedial work is carried out at the Site, Clauses 14 and 50 shall apply correspondingly. The Contractor is obliged to dismantle the Works to the extent necessary and to re-assemble the Works if this requires special knowledge. If such special knowledge is not required, the Contractor has fulfilled his obligations in respect of the defect when he delivers to the Purchaser a duly repaired or replaced part. 
56. If the Purchaser has given such notice as mentioned in Clause 54, and no defect is found for which the Contractor is liable, the Contractor shall beentitled to compensation for the costs he has incurred as a result of the notice. 
57. The Purchaser shall at his own expense arrange for any dismantling and reassembly of equipment other than the Works, to the extent that this is necessary to remedy the defect. 
58. Unless otherwise agreed, necessary transport of the Plant and/or parts thereof to and from the Contractor in connection with the remedying of defects for which the Contractor is liable shall be at the risk and expense of the Contractor. The Purchaser shall follow the Contractor’s instructions regarding such transport. If the Works are not at the Site, the Purchaser shall bear any resulting additional costs incurred by the Contractor when remedying defects. 
59. Defective parts which have been replaced shall be made available to the Contractor and shall be his property. 
60. If, within a reasonable time, the Contractor does not fulfil his obligations under Clause 55, the Purchaser may, by notice In Writing, fix a final time for completion of the Contractor’s obligations. If the Contractor fails to fulfil his obligations within such final time, the Purchaser may himself undertake or employ a third party to undertake necessary remedial works at the risk and expense of the Contractor.  Where successful remedial works have been undertaken by the Purchaser or a third party, reimbursement by the Contractor of reasonable costs incurred by the Purchaser shall be in full settlement of the Contractor’s liabilities for the said defect. 
61. Where the defect has not been successfully remedied as stipulated under Clause 60 :
62. a) the Purchaser is entitled to a reduction of the Contract Price in proportion to the reduced value of the Works, provided that under no circumstance shall such reduction exceed 15 per cent of the Contract Price, or 
63. b) where the defect is so substantial as to significantly deprive the Purchaser of the benefit of the Contract, the Purchaser may terminate the Contract by notice In Writing to the Contractor. The Purchaser is then entitled to compensation for the loss he has suffered up to a maximum of 15 per cent of the Contract Price. 
64. The Contractor is not liable for defects arising out of materials provided, or a design stipulated or specified by the Purchaser. 
65. The Contractor is liable only for defects which appear under the conditions of operation provided for in the Contract and under proper use of the Works. The Contractor’s liability does not cover defects which are caused by faulty maintenance or faulty repair by the Purchaser, or by alterations carried out without the Contractor’s consent In Writing. Finally the Contractor’s liability does not cover normal wear and tear or deterioration. 
66. Notwithstanding the provisions of Clauses 51-65 the Contractor shall not be liable for defects in any part of the Works for more than two years from taking-over. If taking over has been delayed for reasons for which the Purchaser is responsible, the Contractor’s liability for defects shall not be extended beyond 30 months after delivery of the Plant. 
67. Save as stipulated in Clauses 51-64, the Contractor shall not be liable for defects. This applies to any loss the defect may cause including loss of production, loss of profit and other indirect loss. This limitation of the Contractor’s liability shall not apply if he has been guilty of Gross Negligence. 

ALLOCATION OF LIABILITY FOR DAMAGE CAUSED BY THE WORKS 

66. The Contractor shall not be liable for any damage to property caused by the Works after completion and whilst in the possession of the Purchaser. Nor shall the Contractor be liable for any damage to products manufactured by the Purchaser, or to products of which the Purchaser’s products form a part. If the Contractor incurs liability towards any third party for such damage to property as described in the preceding paragraph, the Purchaser shall indemnify, defend and hold the Contractor harmless. If a claim for damage as described in this Clause is lodged by a third party against one of the parties, the latter party shall forthwith inform the other party thereof In Writing. 

 The Contractor and the Purchaser shall be mutually obliged to let themselves be summoned to the court or arbitral tribunal examining claims for damages lodged against one of them on the basis of damage allegedly caused by the Works. The limitation of the Contractor’s liability in the first paragraph of this Clause shall not apply where the Contractor has been guilty of Gross Negligence. 

FORCE MAJEURE 

67. Either party shall be entitled to suspend performance of his obligations under the Contract to the extent that such performance is impeded or made unreasonably onerous by any of the following circumstances: industrial disputes and any other circumstance beyond the control of the parties such as fire, war, extensive military mobilization, insurrection, requisition, seizure, embargo, restrictions in the use of power and defects or delays in deliveries by sub-contractors caused by any such circumstance as referred to in this Clause.  A circumstance referred to in this Clause, whether occurring prior to or after the formation of the Contract, shall give a right to suspension only if its effect on the performance of the Contract could not be foreseen at the time of the formation of the Contract. 
68. The party claiming to be affected by Force Majeure shall notify the other party In Writing without delay on the intervention and on the cessation of such circumstance. If Force Majeure prevents the Purchaser from fulfilling his obligations, he shall compensate the Contractor for expenses incurred in securing and protecting the Works. 
69. Regardless of what might otherwise follow from these General Conditions, either party shall be entitled to terminate the Contract by notice In Writing to the other party if performance of the Contract is suspended under Clause 67 for more than six months. 

ANTICIPATED NON-PERFORMANCE 

70. Notwithstanding other provisions in these General Conditions regarding suspension, each party shall be entitled to suspend the performance of his obligations under the Contract, where it is clear from the circumstances that the other party will not be able to perform his obligations. A party suspending his performance of the Contract shall forthwith notify the other party thereof In Writing. 

CONSEQUENTIAL LOSSES 

71. Save as otherwise stated in these General Conditions there shall be no liability for either party towards the other party for loss of production, loss of profit, loss of use, loss of contracts or for any other consequential or indirect loss whatsoever. 

DISPUTES AND APPLICABLE LAW 

72. All disputes arising out of or in connection with the Contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said rules. 
73. The Contract shall be governed by the substantive law of the Contractor’s country. 

 

At Legal writing experts, we would be happy to assist in preparing any legal document you need. We are international lawyers and attorneys with significant experience in legal drafting, Commercial-Corporate practice and consulting. In the last few years, we have successfully undertaken similar assignments for clients from different jurisdictions. If given this opportunity, we will be able to prepare the legal document within the shortest time possible.