General Conditions For The Supply Of Plant And Machinery For Export - Legal Draft

Prepared

under the auspices of the United Nations Economic Commission for Europe Geneva,

March, 19531.

Preamble1.1. These General

Conditions shall apply, save as varies by express agreement accepted in writing

by both parties.1.2.

Formation of Contract1.1.1.2.2.1. The Contract shall be

deemed to have been entered into when, upon receipt of an order, the vendor has

sent an acceptance in writing within the time limit (if any) fixed by the

purchaser.2.2. If the Vendor, in

drawing up his tender, has fixed a time-limit for acceptance, the Contract

shall be deemed to have been entered into when the Purchaser has sent an

acceptance in writing before the expiration of such time-limit, provided that

there shall be not binding Contract unless the acceptance reaches the Vendor

not later than one week after the expiration of such time-limit.1.2.1.1.2.3. Drawing

and descriptive document3.1. The weights,

dimensions, capacities, prices, performance ratings and other data included in catalogues,

prospectuses, circulars, advertisements, illustrated matter and price lists

constitute an approximate guide. These data shall not be binding save to the

extent that they are by reference expressly included in the Contract.3.2. Any drawings or technical

documents intended, for use in the construction of the Plant or of part thereof

and submitted to the Purchaser prior or subsequent to the formation of the

Contract remain the exclusive property of the Vendor. They may not, without the

Vendors consent, be utilised by the Purchaser or copied, reproduced,

transmitted or communicated to a third party. Provided, however, that the said

plants and documents shall be the property of the Purchaser;a. if

it is expressly so agreed, orb. if

they are referable to a separate preliminary Development Contract on which no

actual construction was to be performed and in which the property of the Vendor

in the said plans and documents was not reserved.3.1.3.2.3.1.3.2.3.3. Any drawings or

technical documents intended for use in the construction of the Plant or of

part thereof and submitted to the Vendor by the Purchaser prior or subsequently

to the formation of the Contract remain the exclusive property of the

Purchaser. They may not, without his consent, be utilised by the Vendor, or

copied, reproduced, transmitted or communicated to a third party.3.4. The vendor shall, if

required by the Purchaser, furnish free of charge to the Purchaser at the

commencement of the Guarantee period, as defined in Clause 9, information and

drawings other than manufacturing drawings of the Plant of sufficient detail to

enable the Purchaser to carry out the erection, commissioning, operation and

maintenance (including running repairs) of all parts of the Plant. Such

information and drawing shall be the property of the Purchaser and the

restrictions on their use set out in paragraph 2 hereof shall not apply

thereto. Provided that if the vendor so stipulates, they shall remain

confidential.1.2.3.4.

Packing1.1.1.2.1.3.1.4.4.1. Unless otherwise

specified :a. prices

shown in price lists and catalogues shall be deemed to apply to unpacked Plant

;b. prices

quoted in tenders and in the Contract shall include the cost of packing or

protection required under normal transport conditions to prevent damage to or

deterioration of the Plant before it reaches its destination as stated in the

Contract.1.2.3.4.5.

Inspection and Tests4.1.4.2.4.3.4.4.4.5.5.1. If expressly agreed

in the Contract, the Purchaser shall entitled to have the quality of the

materials used and the parts of the Plant, both during manufacture and when

completed, inspected and checked by his authorised representatives. Such

inspection and checking shall be carried out at the place of manufacture during

normal working hours after agreement with the Vendor as to date and time.4.1.5.1.5.2. If as a result of

such inspection and checking the Purchaser shall be of the opinion that any

materials or parts are defective or not in accordance with the Contract, he

shall state in writing his objections and the reason thereof.TESTS5.1.5.2.5.1.5.1.5.2.5.3. Acceptance tests will

be carried out and, unless otherwise agreed, will be made at the vendors works

and during normal working hours. If the technical requirements of the tests are

not specified in the Contract, the tests will be carried out in accordance with

the general practice obtaining in the appropriate branch of the industry in the

country where the Plant is manufactured.5.4. The Vendor shall give

to the Purchaser sufficient notice of the tests to permit the Purchasers

representatives to attend. If the Purchaser is not represented at the tests,

the test report shall be communicated by the Vendor to the Purchaser and shall

be accepted as accurate by the Purchaser .5.5. If on any test (other

than a test on site, where test on site are provided for in the Contract) the

Plant shall be found to be defective or not in accordance with the Contract,

the Vendor shall with all speed make good the defect or ensure that the Plant

complies with the Contract. Thereafter, if the Purchaser so requires, the test

shall be repeated.5.6. Unless otherwise

agreed, the Vendor shall bear all the expenses of tests carried out in his

works, except the personal expenses of the Purchasers representatives.5.7. If the contract

provides for test on site, the terms and conditions governing such tests shall

be such as may be specially agreed between the parties.1.2.3.4.5.6.

Passing or risk6.1. Save as provided in

paragraph 7.6 the time at which the risk shall pass be fixed in accordance with

the International Rules for the Interpretation of Trade Term(Incoterms) of the

International Chamber of Commerce in force at the date of the formation of the

Contract. Where no indication is given in the Contract of the form of sale, the

Plant shall be deemed to be sold ex-works.6.2. In the case of a sale

ex-works, the Vendor must give notice in writing to the Purchaser of the date

on which the Purchaser must take delivery of the Plant. The notice of the

Vendor must be given in sufficient time to allow the Purchaser to take such

measures as are normally necessary for purpose of taking delivery.1.2.3.4.5.6.7.

Delivery7.1. Unless otherwise

agreed, the delivery period shall run from the latest of the following dates :a. the

date of the formation of the Contract as defined in Clauses 2;b. the

date on which the vendor receives notice of the issue of a valid import licence

where such is necessary for the execution of the Contract ;c. the

date of the receipt by the Vendor of such payment in advance of manufacture as

is stipulated in the Contract.7.1.7.1.7.1.7.2. Should delay in delivery be caused by

any of the circumstances mentioned in Clauses 10 or by an act or omission of

the Purchaser and whether such cause occurs before or after the time or

extended time for delivery, there shall be granted subject to the provisions of

paragraph 5 hereof such extension of the delivery period as is reasonable

having regard to all circumstances of the case.7.3. If a fixed time for delivery is

provided for in the Contract, and the Vendor fails to deliver within such time

or any extension thereof granted under paragraph 2 hereof, the Purchaser shall

be entitled, on giving to the Vendor within a reasonable time notice in writing

to claim a reduction of the price payable under the Contract, unless it can be

reasonably concluded from the circumstances of the particular case that the

Purchaser has suffered no loss. Such reduction shall equal the percentage named

in paragraph A of the Appendix of that part of the price payable under the

Contract which is properly attributable to such portion of the Plant as cannot

in consequence of the said failure be put to the use intended for each complete

week of delay commencing on the due date of delivery, but shall not exceed the

maximum percentage named in paragraph B of the Appendix. Such reduction shall

be allowed when a payment becomes due on or after delivery. Save as provided in

paragraph 5 hereof, such reduction of price shall be to the exclusion of any

other remedy of the Purchaser in respect of the Vendors failure to deliver as

aforesaid.7.4. If the time for delivery mentioned in

the Contract is an estimate only, either party may after the expiration of two

thirds of such estimated time require the other party in writing to agree a

fixed time.Where

no time for delivery is mentioned in the Contract, this course shall be open to

either party after the expiration of six months from the formation of the

Contract.If

in either case the parties fail to agree, either party may have recourse to

arbitration, in accordance with the provisions of Clause 13, to determine a

reasonable time for delivery and the time so determined shall be deemed to be

the fixed time for delivery provided for in the Contract and paragraph 3 hereof

shall apply accordingly.7.1.7.2.7.3.7.4.7.5. If any portion of the

Plant is respect of which the Purchaser has become entitled to the maximum

reduction provided for by paragraph 3 hereof, or in respect of which he would

have been so entitled had he given the notice referred to therein, remains

undelivered, the Purchaser many by notice in writing to the Vendor require him

to deliver and by such last mentioned notice fix a final time for delivery

which shall be reasonable, taking into account such delay as has already

occurred. If for any reason whatever the Vendor fails within such time to do

everything that he must do to effect delivery the Purchaser shall be entitled

by notice in writing to the Vendor and without requiring the consent of any

Court, to terminate the Contract in respect of such portion of the Plant and

thereupon to recover from the Vendor any loss suffered by the Purchaser by

reason of the failure of the Vendor as aforesaid up to an amount not exceeding

the sum named in paragraph C of the Appendix or, if no sum be named, that part

of the price payable under the Contract which is properly attributable to such

portion of the Plant as could not in consequence of the Vendors failure be put

to the use intended.7.6. If the Purchaser

fails to accept delivery on due date, he shall nevertheless make any payment

conditional on delivery as if the Plant had been delivered. The Vendor shall

arrange for the storage of the Plant at the risk and cost of the Purchaser.

Provided that is the delay in accepting delivery is due to one of the

circumstances mentioned in Clauses 10 and the Vendor is in a position to store

it in his premises without prejudice to his business, the cost of storing the

Plant shall not be borne by the Purchaser.7.7. Unless the failure of

the Purchaser is due to any of the circumstances mentioned in Clause 10, the

Vendor may require Purchaser by notice in Writing to accept delivery within a

reasonable time.If

the Purchaser fails for any reason whatsoever to do so within time the Vendor

shall be entitled by notice in writing to the Purchaser and without requiring

the consent of any Court, to terminate the Contract in respect of such portion

of the Plant as is by reason of such failure up to an amount not exceeding the

sum named in paragraph D of the Appendix or, if no sum be named, that part of

the price payable under the Contract which is properly attributable to such

portion of the Plant.1.2.3.4.5.6.7.8.

Payment8.1. Payment shall be made

in the manner and at the time or times agreed by the parties.8.2. Any advance payments

made by the Purchaser are payments on account and do not constitute a deposit,

the abandonment of which would entitle either party to terminate the Contract.8.3. If delivery has been

made before payment of the whole sum payable under the Contract, Plant

delivered shall to the extent permitted by the law of the country where the

Plant is situated after delivery remain the property of the Vendor until such

payment has been effected. If such law does not permit the Vendor to retain the

property in the Plant, the Vendor shall be entitled to the benefit of such

other rights in respect thereof as such law permits him to retain. The

Purchaser shall give the Vendor every assistance in taking any measures

required to protect the Vendors right of property or such other rights as

aforesaid.8.4. A payment conditional

on the fulfilment of an obligation by the Vendor shall not be due until such

obligation has been fulfilled unless the failure of the Vendor is due to an act

or omission of the Purchaser.8.5. If the Purchaser

delays in making any payment the Vendor may postpone the fulfillment of his own

obligations until such payment is made unless the failure of the Purchaser is

due to an act or omission of the Vendor.8.6. If delay by the

Purchaser in making any payment is due to one of the circumstances mentioned in

Clause 10, the Vendor shall not be entitled to any interest on the sum due.8.7. Save as aforesaid, if

the Purchaser delays in making any payment, the Vendor shall on giving to the

Purchaser within a reasonable time notice in writing be entitled to the payment

on interest on the sum due at the rate fixed in paragraph E of the Appendix

from the date on which such sum become due. If at the end of the period fixed

in paragraph F of the Appendix, the Purchaser shall still have failed to pay

the sum due, the Vendor shall be entitled by notice in writing to the

Purchaser, and without requiring the consent to any Court, to terminate the

Contract and thereupon to recover from the Purchaser the amount of his loss up

to the sum mentioned in paragraph D of the Appendix.1.2.3.4.5.6.7.8.9.

Guarantee9.1. Subject as hereinafter set out, the

Vendor undertakes to remedy any defect resulting from faulty design, materials

or workmanship.9.2. This liability is limited to defects

which appear during the period (hereinafter called the Guarantee Period)

specified in paragraph C of Appendix.9.3. In fixing this period due account has

been taken of the time normally required for transport as contemplated in the

Contract.9.4. In respect of such parts (whether of

the Vendors own manufacture or not) of the Plant as are expressly mentioned in

the Contract, the Guarantee Period shall be such other period (if any) as is

specified in respect of each of such parts.9.5. The Guarantee Period shall start from

the date on which the Purchaser receives notification in writing from the

Vendor that the Plant is ready for dispatch from the works. If dispatch is

delayed, the Guarantee Period shall be extended by a period equivalent to the

amount of the delay so as to permit the Purchaser the full benefit of the time

given for trying out the Plant. Provided however that if such delay is due to a

cause beyond the control of the Vendor such extension shall not exceed the

number of months stated in paragraph 11 of the Appendix.9.6. The daily use of the Plant and the

amount by which the Guarantee period shall be reduced if the Plant is used more

intensively are sated in paragraph 1 of the Appendix.9.7. A fresh Guarantee Period equal to that

stated in paragraph G of the Appendix shall apply, under the same terms and

conditions as those applicable to the original Plant, to parts supplied in

replacement of defective parts renewed in pursuance of this clause. This

provision shall not apply to the remaining parts of the Plant , the Guarantee

Period of which shall be extended only by a period equal to the period during

which the Plant is out of actions as a result of a defect covered by this

Clause.9.8. In order to be able to avail himself

of his rights under this clause the Purchaser shall notify the Vendor in

writing without delay of and defects that have appeared and shall give him

every opportunity of inspecting and remedying them.9.9. On receipt of such notification the

Vendor shall remedy the defect forthwith and, save as mentioned in paragraph 10

hereof, at his own expense. Save where the nature of the defect is such that it

is appropriate to effect repairs on site, the purchaser shall return to the

Vendor any part in which a defect covered by this Clause has appeared, for

repair or replacement by the Vendor, and in such case the delivery to the

Purchaser of such part properly repaired or a part in replacement thereof shall

be deemed to be a fulfilment by the Vendor of his obligations under this

paragraph in respect of such defective part.8.1.9.10. Unless otherwise

agreed, the Purchaser shall bear the cost and risk of transport of defective

parts and of repaired parts or parts supplied in replacement of sub-defective

parts between the place where the Plant is situated and one of the following

points;i.

the

Vendors works if the Contract is ex-works of F.O.R.ii.

the

port from which the Vendor dispatched the Plant if the Contract is F.O.B.

F.A.S., C.I.F., or C.& F.iii.

in

all other cases the frontier of the country from which the Vendor dispatched

the Plant.9.1.9.2.9.3.9.4.9.5.9.6.9.7.9.8.9.9.9.10.9.1.9.1.9.2.9.3.9.4.9.5.9.6.9.7.9.8.9.9.9.10.9.11. Where

in pursuance of paragraph 9 hereof, repairs are required to be effected on

site, the conditions covering the attendance of the Vendors representatives on

site shall be such as may be specially agreed between the parties.9.12. Defective

parts replaced in accordance with this Clause shall be placed at the disposal

of the Vendor.9.13. If

the Vendor refuses to fulfil his obligations under this Clause or fails to

proceed with due diligence after being required so to do, the Purchaser may

proceed to do the necessary work at the Vendors risk and expense, provided

that he does so in reasonable manner.9.14. The

Vendors liability does not apply to defects arising out of materials provided,

or out of a design stipulated, by the Purchaser.9.15. The

Vendors liability shall apply only to defects that appear under the conditions

of operation provided for by the Contract and under proper use. It does not

cover defects due to causes arising after the risk in the Plant has passed in

accordance with Calsue6. In particular it does not cover defects arising from

the Purchasers faulty maintenance or erection or from alterations carried out

without the Vendors consent in writing, or from repairs carried out improperly

by the Purchaser, nor does it cover normal deterioration.9.16. Save

as in this Clause expressed, the Vendor shall be under no liability in respect

of defects after the risk in the Plant has passed in accordance with Clause 6,

even if such defects are due to causes existing before the risk so passed. It

is expressly agreed that the Purchaser shall have no claim in respect, of

personal injury or of damages to property not the subject-matter of the

Contract or of loss or profit unless it is shown from the circumstances of the

case that the Vendor has been guilty of gross misconduct.9.17. Gross

Misconduct does not comprise any and every lack or proper care of skill, but

means and act or omission on the part of the Vendor implying either a failure

to pay due regard to serous consequences which a conscientious Contractor would

normally foresee as likely to ensure, or a deliberate disregard of any

consequences of such act or omission.1.2.3.4.5.6.7.8.9.10.

Reliefs10.1. The

following shall be considered as cases of relief if they intervene after the

formation of the Contract and impede its performance :Industrial disputes and

any other circumstances (e.g. fire, mobilization, requisition, embargo,

currency restrictions, insurrection, shortage of materials and restrictions,

insurrection, shortage of transport, general shortage of materials and

restrictions in the use of power) when such other circumstances are beyond the

control of the parties.10.2. The

party wishing to claim relief by reason of any of the said circumstances shall

notify the other party in writing without delay on the intervention and on the

cessation thereof.10.3. The

effects of the said circumstances, so far as they affect the timely performance

of their obligations by the parties, are defined in Clauses 7 and 8. Save as

provided in Paragraph 7.5,7.7 and 8.7., if by reason of any of the said

circumstances, the performance of the Contract within a reasonable time becomes

impossible, either party shall be entitled to terminate the contract.10.4. If

the Contract is terminated in accordance with paragraph 3 hereof, the division

of the expenses incurred in respect of the Contract shall be determined by

agreement between the parties.10.5. In

default of agreement it shall be determined by the arbitrator which party has

been prevented from performing his obligations and the party shall bear the

whole of the said expenses. Where the Purchaser is required to bear the whole

of the expenses and has before termination of the Contract paid to the Vendor

more than the Vendors expenses, the Purchaser shall be entitled to recover the

excess.If

the arbitrator determines that both parties have been prevented from performing

their obligations, he shall apportion the said expenses between the parties in

such manner as to him seem fair and reasonable, having regard to all the

circumstances of the case.10.1.10.2.10.3.10.4.10.5.10.1.10.2.10.3.10.4.10.5.10.6. For

the purposes of this Clause expenses means actual out-of-pocket expenses

reasonably incurred, after both parties shall have mitigated their losses as

far as possible. Provided that as respects Plant delivered to the Purchase the

Vendors expenses shall be deemed to be that part of the price payable under

the Contract which is properly attributable thereto.1.2.3.4.5.6.7.8.9.10.11.

Limitations of damages11.1. Whether

either party is liable in damages to the other these shall not exceed the damage

which the party in default could reasonably have foreseen at the time of the

formation of the Contract.11.2. The

party who sets up a breach of the Contract shall be under a duty to take all

necessary measures to mitigate the loss which has occurred provided that he can

do so without unreasonable inconvenience, or cost. Should he fail to do so, the

party guilty of the breach may claim a reduction in the damages.1.2.3.4.5.6.7.8.9.10.11.12.

Rights at termination11.1.11.2.12.1. Termination

of the Contract , from whatever cause arising, shall be without prejudice to

the rights of the parties accrued under the Contract up to the time of

termination.1.2.3.4.5.6.7.8.9.10.11.12.13.

Arbitration and Law applicable13.1. Any

dispute arising out of the Contract shall be finally settle, in accordance with

the Rules of Conciliation and Arbitration of the International Chamber of

Commerce, by one or more arbitrators designated in conformity with those Rules.13.2. Unless

otherwise agreed, the Contract shall be governed by law of the Vendors

country.13.3. If

the parties expressly so agree, but not otherwise, the arbitrators shall, in

giving their ruling, act as amiable compositors.APPENDIX(To

be completed by parties to the Contract)ClauseA.

Percentage

to be deducted for each weeks delay 7.3..per centB.

Maximum

percentage which the deductions above 7.3. per centC.

Maximum

amount recoverable for non-delivery 7.5.(in the agreed currency)D.

Maximum

amount recoverable on termination 7.7.(in the agreed by Vendor for failure to

take delivery or make currency)E.

Rate

of interest on overdue payments 8.7per cent Per annumF.

Period

of delay in payment authorising 8.7..months termination by Vendor.G.

Guarantee

period for original Plant and 9.7.months Parts replaced or renewed

1. 5..monthsH.

Maximum

extension of guarantee period 9.6.hours/day1. Daily

use of Plant2. Reduction

of Guarantee period 9.6. for more intensive use.