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General Conditions of Sales

Article 1 General

  • 1.1
    The following terms shall have the following meanings in these General Conditions of Sale (also referred to below as the 'conditions'):
    - product: items and services including but not limited to advice, designs and assembly.
    - contractor: any party referring to these conditions in its tenders, offers or agreements.
    - client: any party to which a tender or offer as referred to above is addressed, and any party with which the contractor enters into an agreement for sale or for work.
  • 1.2
    The financial remuneration for tenders and offers made by the contractor and for the agreements reached with the client shall be expressed in US dollars or in Euros, unless expressly agreed otherwise.
  • 1.3
    These conditions shall apply to all juristic acts carried out by the contractor and all agreements for sale or for work entered into by it (also referred to below together as: the agreement[s]).
  • 1.4
    Terms departing from these conditions shall only be possible if expressly agreed in writing between the contractor and the client. The client’s own purchase or other conditions shall not apply.
  • 1.5
    Any provisions in an agreement made between the contractor and the client which differ from these conditions shall not affect the validity of the other provisions of these conditions.

Article 2 Tenders, and how agreements come into existence

  • 2.1
    All tenders submitted by the contractor shall be without obligation and therefore revocable unless they contain a time period for acceptance.
  • 2.2
    If the client has accepted a without-obligation tender, the contractor shall be entitled to revoke the tender within eight working days of receipt of the acceptance.
  • 2.3
    All tenders are on the basis that the agreement will be implemented by the contractor under normal circumstances and during normal working hours.
  • 2.4
    A written agreement shall be deemed to have come into existence between the contractor and the client on the day when the relevant agreement is signed by the contractor or on the day when the contractor sends out its signed confirmation of order or instructions.
  • 2.5
    The contractor shall only be bound by promises made by or agreements entered into with the contractor's servants once the contractor has confirmed them to the client in writing.
  • 2.6
    Anything supplied and/or fixed, or any work carried out by the contractor in consultation with the client during the implementation of the agreement, in addition to the work expressly described in the agreement, shall be treated as extra work. Extra work shall not be deemed to be a variation of the agreement within the meaning of Article 2.7 of these conditions.
  • 2.7
    Variations to the agreements made between the contractor and the client may only be agreed in writing.

Article 3 Price

  • 3.1
    The prices stated by the contractor shall be in accordance with the INCO terms agreed in advance, as expressly stated in the tenders and offers.
  • 3.2
    If after the date of the agreement coming into existence one or more cost price factors increase, even if this is as a result of foreseeable factors, or if the client changes or extends its instructions, the contractor shall be entitled to increase the originally agreed price accordingly, in accordance with the provisions of Article 3.1 of these conditions, without the client thereby becoming entitled to dissolve the agreement.
  • 3.3
    Unless otherwise agreed, there shall be no separate charge for cost estimates and plans. If the contractor has to prepare, itself or through others, new drawings, calculations, descriptions, models, tools or similar, due for example to subsequent orders, the related costs shall be charged to the client.
  • 3.4
    The costs of loading, unloading and transporting raw materials, intermediate products, models, tools and other items made available by the client are not included in the price and shall be charged to the client separately. Costs paid by the contractor to third parties in this connection shall be treated as costs advanced on behalf of the client.

Article 4 Quality

  • 4.1
    The contractor is under an obligation to supply the products in accordance with the description, quality and quantity specified in the tender or related written agreement.
  • 4.2
    The contractor is under an obligation to supply products which:
    a. are of sound materials and properly made or carried out;
    b. correspond in all respects to any samples, models or technical specifications made available or provided by the contractor and/or the client;
    c. perform (in terms of capacity, yield, speed, finish etc.) as described in the offer or related written agreement.
  • 4.3
    If the content of the agreement entered into between the contractor and the client consists of carrying out services such as designing new products and assembly, the contractor shall carry out this work in accordance with the terms explicitly agreed by it with the client in writing.
  • 4.4
    If the contractor produces a sample at the client’s request and the client approves it, that sample shall be used as a benchmark and the constractor shall be entitled to carry out the agreement in accordance with the sample.

Article 5 Drawings, calculations, models and similar / Intellectual property

  • 5.1
    The information contained in catalogues, images, drawings and similar shall only be binding if and to the extent that it has been expressly and unambiguously included in a written agreement drawn up by the parties or in a confirmation of order signed by the contractor.
  • 5.2
    The tender produced by the contractor and the drawings, calculations, software, descriptions, models, tools and similar produced, processed or provided by it as well as the information contained in these which partly forms the basis of manufacturing and construction methods, shall be the exclusive intellectual property of the contractor, even where the client has been charged costs in connection with this. The client shall guarantee that the information referred to above shall not be copied or shown or disclosed to third parties or used by third parties without the client’s written permission.
  • 5.3
    All intellectual property rights accruing to the contractor out of the implementation of the agreement(s) shall remain the property of the contractor after the agreement ends for whatever reason, unless expressly agreed otherwise with the client.

Article 6 Delivery and time for delivery

  • 6.1
    Unless otherwise agreed in writing, the delivery of products shall take place from the moment provided for in the INCO terms.
  • 6.2
    The contractor shall be entitled to suspend the delivery of products if and as soon as the client is in default with respect to the payment of any amount under previous similar agreements, or if the client is in default with respect to providing any security required by the contractor pursuant to the agreement.
  • 6.3
    The contractor is under an obligation to pack the products properly and in such a way that they can reach their destination in good condition by normal transport. If the contractor deems it necessary to use pallets, packing cases, crates, containers and/or other accessories for packing and transport in order to be able to deliver the goods in the condition stated above, the costs of such materials shall be charged to the client, unless otherwise agreed.
  • 6.4
    The times for delivery stated by the contractor shall never be of the essence unless expressly agreed otherwise. If delivery is not on time, the contractor must therefore be given written notice of default.
  • 6.5
    The period for delivery shall begin on the last of the following dates: a. the day when the agreement comes into existence b. the day when the contractor receives the documents and information necessary for implementation of the agreement, including licences and similar c. the day when the formalities necessary for the work to be commenced have been completed d. the day when the contractor receives any amounts payable in advance in accordance with the agreement.
  • 6.6
    The time for delivery is based on the working circumstances at the time of making the agreement and on timely delivery of materials ordered by the contractor from third parties for the purposes of implementing the agreement. In the event of delay for which the contractor is not to blame, due to a change in the said working circumstances or because materials ordered by the contractor from third parties for the implementation of the agreement are not delivered in time, the time for delivery shall be extended to the extent necessary.
  • 6.7
    Notwithstanding provisions elsewhere in these conditions relating to the extension of the time for delivery, the time for delivery shall be extended by the duration of any delay on the contractor’s side resulting from any failure by the client to comply with any obligation arising out of the agreement or to give any cooperation required of it relating to the implementation of the agreement.
  • 6.8
    Except in the event of gross negligence on the part of the contractor any failure to comply with the time for delivery shall not result in the client being entitled to dissolve the agreement fully or in part.
  • 6.9
    If nothing has been agreed concerning the time for delivery, delivery shall take place within a reasonable period after the agreement has come into existence.

Article 7 Transfer of risk and ownership

  • 7.1
    Immediately after the products have been delivered to the client in accordance with the provisions of Article 6.1 of these conditions, the full risk of these shall pass to the client.
  • 7.2
    The products shall also be at the client’s risk as soon as the client is in default with respect to any act by which it is intended to cooperate with the delivery. In such a case the contractor shall store the products for a resasonable period, itself or through others, at the client’s expense and risk.
  • 7.3
    The contractor reserves to itself the ownership of all products delivered by it to the client or yet to be delivered, until the purchase price has been paid in full. If the contractor is also carrying out work for the client on the client’s account, the reserved ownership shall apply to the products delivered and yet to be delivered until the client has paid the related proforma invoice or invoices.
  • 7.4
    The contractor reserves to itself a right of pledge over products which have been delivered and paid for so that ownership has passed to the client, where the products are still in the client’s possession, as further security for any indebtedness of the client to the contractor howsoever arising.
  • 7.5
    The client shall be under an obligation to use all due care in keeping any products which have been delivered subject to a retention of ownership. The client is under an obligation to insure the products for the duration of the retention of ownership against losses due to fire, explosion or water as well as theft, and to submit the insurance policies to the contractor for inspection when first required. All claims of the client against the insurers of the products under the said insurance policies shall be pledged to the contractor as soon as the contractor communicates this wish, as further security for the latter’s claims against the client.
  • 7.6
    If the client fails to fulfil its payment obligations to the contractor or if the contractor has good grounds to fear that it will fail to fulfil those obligations, the contractor shall be entitled to take back the products delivered subject to a retention of ownership, and the client shall allow the contractor access to the products and give full cooperation. Any partial crediting of the client shall take place at the then current market value, and shall never be more than the original purchase price. The costs of taking the products back shall be deducted from the amount credited as referred to.

Article 8 Payment

  • 8.1
    Payment must be made within the agreed time for payment. All payments must be made without any deduction or set-off, to a bank account designated by the contractor.
  • 8.2
    If the time for payment is exceeded then the client is automatically in default and the contractor is entitled to dissolve the agreement without prejudice to its rights under the agreement, these conditions and the law.
  • 8.3
    If the time for payment is exceeded, the client is liable to pay the contractor interest on the outstanding amount at 8% per month or part of any month by which the time for payment has been exceeded.
  • 8.4
    If the client fails to pay the amount owed, all costs of collecting the debt, whether judicial or extra-judicial, including costs owed to banks, bailiffs and lawyers, shall be borne by the client. The extra-judicial costs are fixed at 15% of the amount owed by the client, with a minimum of USD 400.
  • 8.5
    Payment of an invoice will be applied firstly to reduce costs as referred to in Article 8.4, then to reduce interest accrued as referred to in Article 8.3 and then to reduce the principal sums longest outstanding and rent accrued, even if the client states that the payment relates to a later invoice.

Article 9 Complaints, guarantee

  • 9.1
    The contractor will not accept liability for any claims under guarantee or complaints about products after the client has accepted and approved the products. Clients are always given the opportunity to inspect the products for themselves before delivery. Complaints about defects in items delivered which become visible at the time of receipt or shortly afterwards, or which ought to become apparent after some examination, should be submitted to the contractor in writing within 15 calendar days of receipt, in default of which the client cannot make any claim for replacement, repair, compensation for loss or dissolution of the agreement.
  • 9.2
    Complaints about defects to items delivered which can only be discovered after some time has passed, must be submitted by the client to the contractor in writing within 15 calendar days of when it discovered the defect or ought reasonably to have discovered it. These claims shall lapse in any event after the end of one month after receipt.
  • 9.3
    Complaints about invoices sent by the contractor must be submitted to the contractor in writing within 7 days of the invoice date. The client is not permitted to suspend any payment obligation or to set off payment against any counterclaim.
  • 9.4
    The contractor need not accept any returned consignments unless the contractor has consented to their return in writing in advance.
  • 9.5
    Unless otherwise agreed, products in relation to which the guarantee has been called upon (within the meaning of Article 9.1) within the guarantee period, must be notified to the contractor in writing in good time, giving a clear description of the defect(s) found. The defects coming within the guarantee will be remedied by the contractor by repairs or by replacing the relevant defective component, all of which shall be a matter exclusively for the judgement of the contractor. All costs, other than those referred to above, including but not limited to transport, travel and accommodation costs, as well as the costs of disassembly and installation, shall be borne by the client.
  • 9.6
    If the contractor replaces parts or products to comply with its guarantee obligations, the parts/products replaced shall be the property of the contractor.
  • 9.7
    The guarantee excludes in any event defects occurring in or wholly or partly resulting from:
    a. a failure to observe assembly, operating and maintenance guidelines;
    b. inexpert assembly;
    c. use other than the anticipated normal use;
    d. normal wear and tear;
    e. repairs by third parties including the client;
    f. the application of any government regulations concerning the nature or quality of the materials used;
    g. materials used in the product at the client’s request;
    h. materials or items provided to the contractor by the client for processing;
    i. materials, items, working methods or constructions used on the client’s express instructions, as well as materials or items supplied by or on behalf of the client;
    j. materials or items taken by the contractor from third parties in the widest sense.
  • 9.8
    If the client fails to comply properly, in time or at all with any obligation imposed on it by the agreement made with the contractor or a related agreement, the contractor shall not be bound by any guarantee in relation to any of these agreements. If the client takes steps to repair the product or undertakes other work on the product or instructs others to do so without the contractor’s prior written permission, any rights under the guarantee shall lapse.
  • 9.9
    Unless otherwise agreed, the only guarantee given in relation to the repair or revision works or other services carried out by the contractor shall be that the work assigned has been carried out properly. The guarantee shall only constitute an obligation on the part of the contractor to repeat the relevant work if it turns out not to have been done properly. The provisions in Article 9.6 of these conditions shall apply.
  • 9.10
    The guarantee to be provided by the contractor to the client shall not cover inspections, advice and similar acts carried out by the contractor.
  • 9.11
    Any alleged failure by the contractor to comply with its guarantee obligations shall not release the client from its obligations arising out of any agreement made with the contractor.

Article 10 Liability

  • 10.1
    Apart from the provisions in Articles 9.6 and 9.10 the client shall have no claim against the contractor whatsoever for defects of any kind whatsoever in or in relation to the product. Any liability of the contractor to pay compensation for loss, including direct and indirect losses, including immaterial, business or stagnation losses or any other losses arising out of the agreement made between the client and the contractor or relating to the product and/or the client’s use of it, shall be excluded, except insofar as the loss is due to deliberate action or gross negligence on the part of the contractor, not including deliberate action or gross negligence on the part of third parties engaged by the contractor.
  • 10.2
    Notwithstanding the provisions in Article 10.1, the contractor’s liability shall be limited at all times to a maximum of twice the amount that the contractor contributed as added value, profit margin or commission in the relevant agreement made with the contractor or with a third party on behalf of the contractor.
  • 10.3
    The client shall fully indemnify the contractor against any claims made by third parties for losses described in Article 10.1.

Article 11 Force majeure

  • 11.1
    In these conditions force majeure shall mean circumstances which prevent compliance with an obligation and which are not due to fault on the part of the contractor, and for which the contractor is not liable pursuant to the law, any juristic act or normal custom. These shall include but are not limited to, measures taken by domestic and foreign authorities which form a hindrance, fire or other destruction affecting the contractor’s business, sabotage, sit-down or other strikes affecting the business of the contractor or its suppliers, power cuts, serious transport problems and widespread sickness absenteeism affecting the contractor’s managerial staff. Force majeure shall also include any failure on the part of foreign suppliers of the contractor as a result of which the contractor cannot fulfil its obligations to the client.
  • 11.2
    If the implementation of the agreement is prevented due to force majeure, the contractor shall be entitled, without a court order, to suspend the implementation of the agreement for a maximum of six months or to dissolve the agreement entirely or in part without any obligation to pay compensation. During the suspension the contractor shall be entitled, and at the end of the suspension it shall be obliged, to choose between implementation or full or partial dissolution of the agreement.
  • 11.3
    If the period in which the contractor cannot comply with its obligations due to force majeure lasts for longer than six months, the client shall also be entitled to dissolve the agreement, without any obligation to pay compensation.
  • 11.4
    In the event of suspension or dissolution pursuant to the provisions of this Article, the contractor shall be entitled to require immediate payment for the raw materials, materials, parts and other items reserved, used and manufactured in implementing the agreement, at the value reasonably ascribed to them. In the event of dissolution, the client shall be obliged to take the items referred to after payment of the amount payable as referred to in the last sentence, and in default of this the contractor shall be entitled to have the items stored at the client’s expense and risk, or to sell them at the client’s expense.

Article 12 Suspension and dissolution

  • 12.1
    If the client fails to comply properly, in time or at all with any obligation imposed on it by the agreement made with the contractor or a related agreement, or if it is feared that the client is not or will not be in a position to comply with its contractual obligations to the contractor, or in the event of bankruptcy, a judicial suspension of payments order, or the closure, liquidation or partial transfer of the client’s business, including the assignment of a significant part of its receivables, the contractor shall be entitled, without any requirement for a notice of default or a court order, either to suspend the implementation of any of these agreements for a maximum of six months, or to dissolve it in full or in part, without any obligation to pay compensation or give any guarantee, and without prejudice to any other rights to which it is entitled. During the suspension the contractor shall be entitled, and at the end of the suspension it shall be obliged, to choose between implementation or full or partial dissolution of the agreement(s) suspended.
  • 12.2
    Pursuant to the preceding paragraph the agreed price shall become immediately payable, after deduction of instalments already paid and any costs saved by the contractor due to the suspension, and the contractor shall be entitled to arrange storage of any manufactured raw materials, materials, parts and other items reserved by the contractor to implement the agreement, at the client’s expense and risk. In the event of dissolution pursuant to the previous paragraph, the agreed price, if no prior suspension has taken place, shall become immediately payable, after deduction of the instalments already paid and costs saved by the contractor due to the dissolution, and the client shall be obliged to pay the amount described above and to take possession of the items included, in default of which the contractor shall be entitled to arrange storage of these items at the client’s expense and risk or to sell them on the client’s account.

Article 13 Final provisions

  • 13.1
    The local law of the Hong Kong S.A.R. of China shall apply to all agreements made by the contractor and any disputes arising out of these.
  • 13.2
    Any disputes shall be submitted to the competent court in Hong Kong, or to an international trade arbitration commission in China (CIETAC).
  • 13.3
    If one or more provisions of these conditions are invalid, the other provisions shall remain in force. The parties shall consult together about any possibly invalid provisions in order to arrive at replacement provisions so as to retain the intended effect of the agreement and the conditions forming part of it as a whole.
  • 13.4
    The parties shall keep confidential all information, facts and events coming to their knowledge in connection with the coming into existence and implementation of the agreement where disclosure could harm the interests of the other party. In no circumstances shall the client use information received by it in any way from the contractor, and this provision expressly concerns information concerning the contractor’s clients and suppliers, unless the contractor gives express permission in advance for disclosure.
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