Terms of trade
General conditions for the supply and installation of machinery and other mechanical, electrical and electronic equipment. Issued in 1994 by the engineering industry organisations in Denmark, Finland, Norway and Sweden.
(Confederation of Danish Industry, Denmark, Metalliteollisuuden Keskusliitto-Metalindustriens Centralforbund r.y. Finland, Teknologibedriftenes Landsforening, Norway, and Sveriges Verkstadsindustrier, Sweden)
1. The following general terms and conditions shall apply if the parties have agreed to them in writing or otherwise. If the conditions of a delivery apply, any deviations must be agreed in writing between the parties.
2. In these General Conditions, the following terms are defined as follows:
The parties’ written contract for the Supply and all contractual annexes, including agreed Amendments and Addenda to the said documents. Conditions in the Agreement which differ from the general conditions below shall prevail over these.
All machinery, equipment, materials and items to be supplied by the Supplier under the Contract.
The material and the result of the work to be carried out by the Supplier under the Contract. If the Supply under the Contract is to be taken over in separate parts which are intended to be used independently of each other, the rules in these Conditions shall apply to each part separately. The Supply in such cases therefore means the individual part.
The place where the Supply is to be assembled and the areas immediately adjacent thereto necessary for the transport, unloading and storage of the Plant and any equipment
The payment, excluding value added tax, to be made for the Supply. If payment for installation is to be made on account and the installation work has not been completed, the Contract Sum in Clauses 20, 24, 47 and 48 shall be the price of the Equipment plus 10% or such other percentage as the parties may agree.
Any document signed by one of the parties and received by the other party. A message which has reached the other party by telegraph, telefax or telex with an indication of the sender, as well as e-mail, but not other electronically transmitted messages, shall also be deemed to be a Written Communication.
3. Information in product information and price lists is only binding to the extent that the Agreement expressly refers to them.
Drawings and other technical documents
4. All drawings and other technical documents relating to the Supply which are handed over by one party to the other before or after the conclusion of the Contract shall belong to the party which handed them over. Drawings, other technical documents or technical information received cannot be used for any other purpose without the consent of the other party. that was the purpose of the overlead. Without the consent of the other party, the said material may not be copied or reproduced.
5. The Supplier shall provide the Purchaser, free of charge, with one or an agreed larger number of copies of drawings and other technical documents sufficiently detailed to enable the Purchaser to carry out the commissioning, operation and maintenance, including ongoing repairs, of the Supply, at the latest upon takeover. However, the supplier shall not be obliged to provide drawings and documents on the basis of which the equipment or spare parts were manufactured.
6. Neither Party shall be entitled, without the consent of the other Party, to disclose to any third party any technical or commercial information identified by the other Party as confidential at the time of the conclusion of the Agreement or at any time thereafter. However, this does not apply to the extent. such information is necessary for the parties to perform their obligations under the Agreement or necessary for the operation and maintenance of the Supply. The Parties undertake to prevent the disclosure or use of the said confidential information to a greater extent than described in the first paragraph by employees, consultants, subcontractors and other suppliers of the Party or others who have or may have access to such information within the Party.
Scope of supply. Laws and regulations
7. The scope of delivery shall be as set out in the Agreement. The delivery must comply with the laws, regulations and provisions in force at the time of the offer in the country where the Place of Assembly is located. The Purchaser shall be obliged, at the Supplier’s request, to provide information on the laws and other regulations applicable to the Supply.
8. The Supplier shall carry out such alterations as are caused by changes in the laws, regulations and provisions applicable to the Supply made between the date of the offer and the date of acceptance. The same applies to changes in the generally accepted interpretation of such laws, rules and regulations. The provisions of paragraphs 35 and 36 apply to such alterations.
9. The Purchaser shall be responsible to the Supplier for ensuring that the Installation is carried out in conditions which comply with the applicable laws and regulations governing the working environment at the Installation Site. The Purchaser shall also give the Supplier Written Notice of the safety regulations applicable to personnel at the Site. The Purchaser shall also provide, at its own expense, satisfactory cloakroom, washing and eating facilities for the assembly personnel at or near the Assembly Site. The Purchaser is also responsible for providing the Supplier’s personnel with board and lodging in the vicinity. installation site in accordance with applicable tariff agreements and regulations, or as specified in the Agreement. Unless otherwise agreed, board and lodging expenses shall be paid by the supplier.
Preparing for installation
10. The Supplier shall notify the Purchaser in Writing when the Plant will be ready for installation in sufficient time to enable the Purchaser to take the steps required by Clauses 11, 12 and 13 in good time for the installation to be carried out.
11. Unless the time for this has been agreed, the Supplier shall provide the Purchaser in good time with drawings or descriptions showing how the Plant is to be installed. He shall at the same time provide all information necessary for the construction of the foundations and other supports required by the Supply. In addition, he shall provide all information necessary for the provision of convenient access, for the Equipment and for necessary equipment to and at the Installation Site and for the establishment of all necessary connections to the Equipment. Any costs arising from errors or omissions in the drawings, descriptions or information referred to above which become apparent before the take-over shall be borne by the supplier. Error. arising after the takeover shall be dealt with in accordance with the rules set out in paragraphs 52 to 66.
12. The Buyer shall carry out the necessary preparatory work in accordance with the drawings, descriptions and information referred to in paragraph 11. Unless the parties have agreed when the buyer’s work is to be completed, this must be done at least 1 week before installation is to commence, and so that the foundations and substructure are in a position to receive theMaterials at the appointed time. The Purchaser shall notify the Supplier in Writing when the preparatory work has been completed.
13. The Purchaser shall ensure that water and motive power, including compressed air and electrical power, as necessary or as specified in the Contract, are made available to the Supplier at the Site prior to the commencement of installation. This shall be done at no cost to the supplier, who shall also not pay for the use of said water and motive power. The buyer shall also provide, free of charge, locked or otherwise protected premises or storage space. suitable for protecting the Plant, the Supplier’s tools and his equipment against theft and damage, at the disposal of the Supplier at or near the place of installation.
Samples of the material during manufacture. Inspection
14. If, under the contract, the material is to be tested in connection with manufacture, the test shall be carried out at the place where manufacture takes place, unless another place is agreed. If technical requirements for the test have not been agreed, the test shall be carried out in accordance with the custom of the industry concerned in the country where the Material is manufactured.
15. The Supplier shall notify the Purchaser in Writing of the test referred to in Clause 14 in sufficient time for the Purchaser to be present. The test may be carried out even if the purchaser is not represented, if he has received such notification. The supplier shall keep a record of the test. The test report must be sent to the buyer. The test report shall be deemed to give an accurate description of the conduct of the test and its outcome, unless the buyer proves otherwise.
16. If, on the test referred to in Clause 14, the Plant is found not to be in conformity with the Contract, the Supplier shall as soon as possible cause the Plant to be brought into conformity with the Contract. At the buyer’s request, a new test must then be carried out. However, if the defect was insignificant, a new test cannot be required.
17. The Buyer shall also be entitled, within reasonable limits or to the extent specified in the Contract, to inspect the manufacture of the Plant during normal working hours and on three days’ notice.
18. Unless otherwise agreed, the Supplier shall bear all costs of tests carried out where the Material is manufactured. However, for such tests and for the inspection referred to in point 17, the buyer shall bear all the costs of its representatives, including travel and subsistence expenses.
Buyer’s delay, etc.
19. If the Purchaser finds that he is unable to take the steps which he is required to take for the performance of the Supply, including the obligations under Clauses 9, 12 and 13, within the agreed time, or if such delay on his part is likely, he shall without undue delay give the Supplier Written Notice thereof. He shall at the same time state the reason for the delay and, as far as possible, the duration of the delay. Notwithstanding any delay on the part of the buyer in performing his obligations under the first paragraph, he shall nevertheless make any conditional payment for the supplier’s services as if the delay had not occurred.
20. If the Purchaser is in default or otherwise in breach of his obligations, including those under Clauses 9, 12 and 13, he shall reimburse the Supplier for the additional costs thereby incurred by him, in addition to any claim under the second paragraph of Clause 23. The supplier shall be entitled to a reasonable extension of the delivery time as a result of the buyer’s default. If the Supplier wishes to claim an extension, he shall without undue delay give the Purchaser Written Notice thereof.If the default is substantial, the Supplier may refuse to proceed with the delivery and installation until the situation has been remedied. If the Purchaser has not remedied the situation within one month of receiving Written Notice from the Supplier that he intends to exercise his right of withdrawal, the Supplier may withdraw from the Contract by a further Written Notice to the Purchaser. In the event of termination of the Contract, the Supplier may claim compensation from the Purchaser for any damage caused to him by the Purchaser’s default. The damages shall not exceed the amount of the Contract.
21. Unless otherwise agreed, payment shall be made in accordance with the following:
21.1 For installation on account: one third of the agreed price for the Equipment within 30 days of the conclusion of the Agreement. One third of the agreed price for the Material within 30 days after the Material has been declared ready for delivery from the factory. One third of the agreed price for the Equipment within 30 days after the Equipment has arrived at the Place of Assembly. Payment for the installation work is due after monthly invoice with 30 days payment term from the invoice date.
21.2 For fixed price installation included in the Contract Sum: 30% of the Contract Sum within 30 days of the conclusion of the Contract. 30% of the Contract Sum within 30 days after the material has been declared ready for delivery from the factory. 30% of the Contract Sum within 30 days after the arrival of the Equipment at the Place of Installation. The remainder of the Contract sum within 30 days of takeover.
22. If installation on account has been agreed, the following items must be charged separately:
22.1 All travel expenses (including local transport costs) of the Supplier’s personnel and the costs of transporting the personnel’s tools and personal effects.
22.2 Costs of board and lodging and other subsistence expenses for the Supplier’s staff for each day’s absence from the place of origin, including days off and public holidays. Unless otherwise agreed, the highest rates of subsistence and travelling allowance for government officials in the country of the supplier, applicable for travel to the country where the installation is carried out, shall apply.
22.3 Payment for work during regular working hours according to the hourly rate certified by the Buyer.
22.4 Payment for overtime according to the number of hours, certified by the buyer.
22.5 Payment at the rates for ordinary working time, for time spent on: a) necessary preparation for outward and return journeys; b) outward and return journeys and any other journeys, calculated in accordance with the law, regulation or collective agreement in force in the Supplier’s country of origin; c) daily travel between the accommodation and the Assembly Site, if the journey time per day exceeds 30 minutes, unless a different time limit is stipulated in the collective agreement in force in the Supplier’s country.
22.6 Costs incurred by the Supplier in making Equipment available under the Contract, including payment for the use of the Supplier’s own installation equipment.
22.7 Payment for waiting time at the rates for ordinary working time if the Work is prevented by circumstances for which the Supplier is not responsible under these Conditions or the Contract otherwise.
22.8 Taxes and duties payable on the invoiced amount and payable by the Supplier.
23. If installation has been agreed at a fixed price, all the costs referred to in points 22.1 to 22.6 shall be included in the payment for installation. To this must be added value added tax or equivalent tax. If the installation work is changed, delayed or temporarily suspended for reasons for which the Buyer or its other suppliers are responsible, the supplier shall be entitled to payment in addition to the agreed installation price:
23.1 Waiting time and time spent on extra journeys.
23.2 Additional work, including work to dismantle, secure and reassemble assembly equipment.
23.3 Costs caused by the Supplier’s Equipment having to remain at the Site longer than provided.
23.4 Additional travel and subsistence expenses for the Supplier’s staff.
23.5 Other expenses and costs which the Supplier can prove have been incurred by him as a result of the rearrangement of the installation work.
24. If the Purchaser fails to pay on time, the Supplier shall be entitled to interest on arrears from the due date at the rate applicable under the law of the country of the Supplier governing interest on late payment. However, if the supplier’s country is Denmark, the default interest rate shall be the officially fixed discount rate plus 9 percentage points.
24.1 If the Purchaser has not paid the amount due after 3 months, the Supplier shall be entitled to terminate the Contract by Written Notice to the Purchaser and to claim from the Purchaser, in addition to default interest, compensation for the loss suffered by him. The compensation cannot exceed the Contract amount.
Reservation of title
25. The equipment shall remain the property of the Supplier until payment has been made in full, to the extent that such retention of title is valid under applicable law.
26. The Parties shall, no later than the Supplier’s notification that the Equipment is ready for delivery from the factory, appoint by Notice in Writing each of their representatives to act during the day-to-day work at the Place of Assembly. The representatives must be present at or near the assembly site during working hours. Unless otherwise agreed, they shall be authorised to act on behalf of their respective parties in all matters relating to the installation work. Where these Conditions provide for Written Notice to be given, the relevant representative is always authorised to receive the notice on behalf of its party.
27. Unless otherwise agreed, the Purchaser shall provide the Supplier at his own expense with the necessary unskilled labour at the Place of Assembly. The supplier must indicate its current requirements for unskilled labour with one week’s notice.
28. Unless otherwise agreed, the Purchaser shall, at its own expense, provide the Supplier at the Site with cranes, lifting gear, scaffolding and internal transport equipment to the extent that such equipment is necessary to carry out the Assembly. The supplier shall specify the equipment by Written Notice at least one month before the start of the installation work.
29. The Supplier is obliged to ensure that the safety regulations applicable at the Installation Site are observed by his personnel. This provision shall not affect the Buyer’s obligations under Clause 9. The Buyer may require that any Supplier personnel who fail to comply with these safety provisions be excluded from access to the Site.
30. The Supplier shall provide the Purchaser by Written Notice with any necessary information on the special risks to the environment which may be associated with the installation of the Supply.
31. The Purchaser may not, without the consent of the Supplier by Written Notice, impose any work on the Supplier’s personnel.
Supplier’s right to control
32. The Supplier shall be entitled at any time during the work at the Place of Assembly to inspect the Supply at his own expense. This shall apply until the taking-over of the Supply has taken place and thereafter for all work resulting from the provisions of paragraphs 52 to 66.
33. The Buyer may, until take-over has taken place, subject to the limitations set out in Clause 36, require Changes in the scope, design and performance of the Deliverables originally agreed. Requests for change must be made by Written Notice to the Supplier and must include a precise description of the change requested.
34. The Supplier may, until the take-over has taken place, propose by Written Notice such Modifications as are referred to in the first paragraph of Clause 33.
35. As soon as possible after receiving the request for variation or after having himself proposed the variation, the Supplier shall give the Purchaser Written Notice of whether and how the variation can be carried out, as well as of the change in the Contract Sum, the delivery period and other contractual conditions resulting from the variation. The Supplier shall also give the Purchaser such notice when changes in laws, regulations and provisions as referred to in Clause 8 entail alterations.
36. Except as provided in Clause 8, the Supplier shall not be obliged to carry out changes until the parties have agreed in writing on the effects of the changes on the Contract Sum, the delivery period and any other contractual terms. If the parties cannot agree on the contractual consequences of such modification works referred to in Clause 8, the Supplier shall perform the works on account until the parties reach agreement or a solution is reached in accordance with Clause 71.
37. Once the installation work has been completed, acceptance tests shall be carried out, unless otherwise agreed, to determine whether the Supply complies with the Agreement. The technical requirements for conducting the takeover test shall be as specified in the Agreement. If the technical requirements for the test have not been agreed, the test shall be carried out in accordance with the general practice and standards in force in the country where the place of assembly is situated. The Supplier shall give the Purchaser Written Notice that the Supply is ready for acceptance. He must also set a reasonable deadline for the holding of takeover tests. The Parties shall then jointly determine a date for the holding of the tests. Unless otherwise agreed, the tests shall take place during the buyer’s normal working hours.
The tests shall be carried out under the direction of the supplier and shall be witnessed by representatives of both parties. If the Purchaser is prevented from being present at the agreed time for the take-over tests, the Supplier shall, by Written Notice to the Purchaser, fix a new time for such tests. The buyer is entitled to a reasonable time before such a test is held. If the buyer does not appear for the postponed takeover test, the test may be carried out without his presence. The supplier shall then be entitled to call in an outside expert to be present during the test, at the buyer’s expense. The supplier shall keep a record of the take-over test. The test report must be sent to the buyer. The test report shall be deemed to give an accurate description of the conduct and outcome of the takeover test, unless the buyer proves otherwise.
38. If the Supply is found not to be in conformity with the Contract on the basis of a take-over test, the Supplier shall bring the Supply into conformity with the Contract as soon as possible. A new take-over test must then be held unless the parties agree not to do so or the deviations from the contractual state are of no operational significance. In the event of a new takeover bid, point 37 shall apply mutatis mutandis.
39. The purchaser shall provide, at no cost to the supplier, the power, fuel, lubricants, water, raw materials and supplies necessary for the performance of the acceptance tests referred to in paragraphs 37 and 38 and for final adjustments in connection with those tests. The purchaser shall also install, at no cost to the supplier, the equipment and provide the labour necessary to carry out the take-over tests.
40. If the buyer fails to fulfil his obligations under point 39 or otherwise fails to cooperate in the takeover tests. so that they cannot be carried out after he has received the supplier’s notification under the third paragraph of paragraph 37, the satisfactory acceptance test shall be deemed to have been completed on expiry of the period specified by the supplier in the notification.
41. The Purchaser shall be deemed to have taken over the Supply (a) as soon as the take-over tests have been carried out or are deemed to have been carried out in accordance with Clauses 37-40 or (b) if it has been agreed that take-over tests shall not be carried out and when the Written Notice referred to in the first sentence of the third paragraph of Clause 37 has been received by the Purchaser and the Supply is in the condition required by the Contract at the time of take-over.However, this shall not prevent the taking over of the Supply if minor adjustments and additions of no operational significance are subsequently made to the Supply. The Purchaser shall without undue delay confirm by Written Notice to the Supplier that the Supply has been taken over and at the same time confirm the date of the take-over.
Failure to provide such confirmation shall not affect the assessment of whether the acquisition has taken place. Before taking over the Supply, the Buyer shall not be entitled to put it or any part of it into use. If the Buyer takes the Supply or any part thereof into use without the Supplier’s consent by Written Notice, the Buyer shall be deemed to have taken over the Supply. The supplier’s obligation to carry out takeover tests then falls away.
42. Unless otherwise agreed, the risk of the Supply shall pass at the time of taking over. If it has been agreed that the Purchaser shall receive the Plant at the Place of Assembly, he shall be obliged to examine the Plant immediately and to complain to the Supplier immediately by Written Notice of any damage in transit.
Delivery time. Delay
43. The supply shall be deemed to be delivered on the day on which it is taken over in accordance with the provisions of point 41.
44. If the parties have specified a period of time within which the takeover is to take place instead of a specific time, this period is deemed to run from the conclusion of the Agreement.
45. If the Supplier finds that he cannot complete the delivery in time, or if delay on his part is likely, he shall without undue delay give the Purchaser Written Notice thereof. The Supplier shall at the same time state the reason for the delay and, as far as possible, when the Supply will be ready for acceptance. Notwithstanding the provisions of paragraphs 47 and 48, if the supplier fails to give the abovementioned notice, he shall compensate the buyer for the additional costs incurred by him as a result of the failure to give the notice.
46. If take-over is delayed as a result of a circumstance which constitutes a ground for exemption from liability under Clause 68, as a result of an act or omission by the buyer or his other suppliers, or as a result of a change under Clauses 8 and 33 to 36, the time for delivery shall be extended to the extent that this is considered reasonable in the circumstances. The delivery period shall be extended even if the cause of the delay occurs after the originally agreed delivery date.
47. If the delivery is not taken over in due time in accordance with paragraph 41, the buyer is entitled to conventional payment from the day on which the take-over should have taken place. The Conventional Penalty shall be 0.5% of the Contract Sum for each full week of delay. The Conventional Bid cannot exceed 7.5% of the Contract Sum. The Conventional Goods shall become due for payment on demand by Written Notice from the Buyer, but not earlier than the date of final take-over of the entire Supply, or at the time when the Buyer terminates the Contract in accordance with Clause
48. The buyer forfeits his right to a conventional payment if he has not made a claim to this effect by Written Notice within 6 months after the takeover should have taken place.
49. If the Purchaser is entitled to the maximum conventional price under Clause 47 and the Supply has not yet been taken over, the Purchaser may, by Notice in Writing to the Supplier, require the Supply to be completed for acceptance testing within a final reasonable period which shall not be less than one week. If the Supplier has not completed the Supply within this period either, and this is not due to circumstances for which the Purchaser or its other suppliers are responsible, the Purchaser may terminate the Contract by giving written notice to the Supplier. If the Purchaser thus terminates the Contract, he shall in addition be entitled to compensation for any loss suffered by him as a result of the Supplier’s delay, if such loss exceeds the maximum liquidated damages which he could have claimed under Clause 47.
This compensation may not exceed 7.5% of the Contract Sum. The Purchaser shall also have the right to terminate the Contract by notice in Writing to the Supplier if it is clear that a delay will occur which would entitle the Purchaser to the maximum liquidated damages under the rules of Clause 47. In the event of such termination, the buyer shall be entitled to both the maximum liquidated damages and the compensation provided for in the third paragraph of this Clause.49. Except for liquidated damages under paragraph 47 and termination with limited compensation under paragraph 48, any claim by the buyer for delay by the supplier is excluded. This limitation of the supplier’s liability shall not apply if he has been guilty of gross negligence.
Liability for damage to property prior to takeover (product liability)
50. The Supplier shall be liable for any damage to the Supply which occurs before the risk has passed to the Buyer. This applies regardless of the cause of the damage, unless the damage is caused by the buyer or someone for whom he is responsible. Even if the Supplier is not liable under this paragraph for damage to the Supply, the Buyer may require the Supplier to repair the damage at the Buyer’s expense.
51. The Supplier shall be solely liable for damage to the Buyer’s property prior to taking over the Supply. if it can be proved that the damage in connection with the performance of the Supply was caused by the negligence of the Supplier or of someone for whom he is responsible. However, the Supplier shall in no event be liable for any loss of profits, business interruption or other consequential loss.
Liability for defects
52. The Supplier shall remedy any defect due to faulty design, materials or workmanship by repairing or replacing the Supply in accordance with Clauses 53 to 65 below.
53. The Supplier’s liability shall cover only defects which become apparent within 1 year from the date on which the Supply was taken over in accordance with Clause 41. If the Supply is used more intensively than agreed or more intensively than may have been foreseen at the time of the conclusion of the Contract, this period shall be shortened proportionately.
54. For parts of the Supply repaired or replaced in accordance with Clause 52, the Supplier shall assume the same obligations as apply to the original Supply for a period of l years. For the other parts of the Supply, the period referred to in Clause 53 shall be claimed only for the period during which the Supply could not be used owing to the defects referred to in Clause 52.
55. The Purchaser shall give Written Notice of a defect to the Supplier without undue delay after the defect has become apparent and in no case later than 2 weeks after the expiry of the period referred to in Clause 53, see Clauses 54 and 65. The notification shall contain a description of the appearance of the defect. If there is reason to believe that the defect may cause a risk of damage, such notice shall be given promptly. If the Buyer fails to notify the Supplier of a defect by Written Notice within the time limits specified in this paragraph, the Buyer shall lose its right to claim in respect of the defect.
56. After receiving the Written Notice under Clause 55, the Supplier shall remedy the defect without undue delay. The supplier shall bear the costs of this in accordance with the provisions of paragraphs 52 to 64. The remedy shall be carried out at the place of assembly unless the Supplier considers it expedient that the defective part or, as the case may be, the Material be returned to him for repair or replacement. If disassembly and assembly of the part requires special expertise, the supplier is obliged to carry out such disassembly and assembly. If such special expertise is unnecessary, the supplier’s obligation in respect of the defective part is satisfied when he has delivered a suitably repaired or replaced part to the buyer.
57. If the remedial work referred to in paragraph 56 is to be carried out at the place of installation, paragraphs 9, 13 and 51 shall apply mutatis mutandis.
58. If the buyer has given the notice referred to in paragraph 55 and it appears that there is no defect for which the supplier is responsible, the supplier shall be entitled to compensation for the work and expense which the complaint has caused him.
59. If any disassembly and assembly involves intervention in something other than the Delivery, the work and the costs thereof shall be borne by the Buyer.
60. Any shipment in connection with repair or replacement shall be at the Supplier’s expense and risk. The buyer must follow the supplier’s instructions on the method of shipment. The Purchaser shall bear the additional costs incurred by the Supplier in remedying defects due to the Supply being at a place other than the Place of Assembly.
61. Defective parts replaced in accordance with Clause 52 shall be placed at the disposal of the Supplier and shall become his property.
62. If the Supplier fails to perform its obligations under Clause 56 within a reasonable time, the Purchaser may, by Notice in Writing, give the Supplier a final date for performance. If the obligations are not fulfilled within the time limit, the Buyer may, at its option: a) have the necessary repairs carried out and/or have new parts manufactured at the Supplier’s expense and risk, provided that it does so in a reasonable and fair manner; or b) claim proportionate rejection, up to a maximum of 15% of the Contract sum. If the defect is substantial, the Buyer may instead terminate the Contract by Written Notice to the Supplier. The Buyer shall also be entitled to terminate the Agreement if the defect, after the actions mentioned under (a) remains material. The buyer may claim compensation for his loss in the event of cancellation, up to a maximum of 15% of
63. The Supplier’s liability shall not extend to defects caused by materials provided by the Purchaser, by designs prescribed or specified by the Purchaser or by preparatory work improperly carried out by the Purchaser.
64. The Supplier’s liability shall cover only defects which occur under the working conditions provided for in the Contract and during proper use of the Supply. Liability shall not extend to defects caused by circumstances occurring after the take-over referred to in point 41. It does not cover, for example, defects caused by faulty maintenance by the Buyer, changes in the Supply made by the Buyer without the Supplier’s consent by Written Notice or repairs carried out in an improper manner by the Buyer. Finally, liability does not cover normal wear and tear and deterioration.
65. Notwithstanding the provisions of Clauses 52 to 64, the Supplier’s liability for defects shall not apply to any part of the Supply beyond 2 years from the date of taking over in accordance with Clause 41.
66. The supplier shall have no liability for defects other than those prescribed in paragraphs 52 to 65. This applies to any loss the defect may cause, including operating losses, lost profits and other consequential financial losses. This limitation of the supplier’s liability shall not apply if he has been guilty of gross negligence.
Liability for damage to property caused by the Supply after take-over (product liability)
67. The Purchaser shall indemnify the Supplier to the extent that the Supplier is held liable to third parties for any damage or loss for which the Supplier is not liable to the Purchaser under the second and third paragraphs of this Clause.The Supplier shall not be liable for any damage caused by the Supply after take-over: (a) to immovable or movable property occurring while the Supply is in the possession of the Buyer; (b) to products manufactured by the Buyer or to products incorporating them, or for any damage to immovable or movable property caused by such products as a result of the Supply.
In no event shall the Supplier be liable for any loss of business, lost profits or any other consequential economic loss. The aforementioned limitations of the supplier’s liability shall not apply if he has been guilty of gross negligence. If a third party makes a claim against one of the Parties for liability under this paragraph, that Party shall promptly notify the other Party. The Supplier and the Purchaser shall be mutually obliged to take legal action in the court or arbitral tribunal dealing with claims for damages brought against either of them on the basis of damage or loss allegedly caused by the Supply. However, the relationship between the buyer and the supplier shall always be settled by arbitration in accordance with paragraph 71.
Exemption from liability (force majeure)
68. The following circumstances shall give rise to a discharge if they prevent performance of the Contract or make performance unreasonably onerous: industrial disputes and any other circumstances beyond the control of the parties, such as fire, war, mobilisation or military conscription on a similar scale, requisition, seizure, currency restrictions, riots and civil commotions, shortage of means of transport, general shortage of goods, restrictions on motive power and shortages or delays in deliveries by subcontractors caused by any of the circumstances mentioned in this paragraph. Circumstances such as those mentioned shall only give rise to a discharge if their influence on the performance of the Agreement could not have been foreseen at the time the Agreement was concluded.
69. It shall be the duty of the party desiring to rely on any ground for exemption referred to in paragraph 68 to inform the other party forthwith by Notice in Writing of its occurrence and termination. In the event of force majeure on the part of the Buyer, the latter shall cover the costs incurred by the Supplier in securing and protecting the Supply. In addition, the Purchaser shall cover the Supplier’s costs for personnel, subcontractors and equipment which, with the Purchaser’s consent, are kept on standby for the resumption of work on the Supply.
70. Notwithstanding anything to the contrary in these conditions, either party may terminate the Agreement by written notice to the other party. If the performance of the Contract is prevented for more than 6 months by an event referred to in paragraph 68.
Disputes and applicable law
71. Disputes arising out of or in connection with the Contract shall not be subject to judicial review but shall be settled by arbitration in accordance with the rules of law of the country of the Supplier relating to arbitration. 72. All legal issues arising from the Contract shall be determined in accordance with the law of the country of the Supplier.