Conditions for the Supply of Plant and Machinery for Export
under the auspices of the United Nations Economic Commission for Europe Geneva,
1.1. These General
Conditions shall apply, save as varies by express agreement accepted in writing
by both parties.
Formation of Contract
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
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.
and descriptive document
3.1. 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
Vendor’s 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;
it is expressly so agreed, or
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.
3.3. 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
4.1. Unless otherwise
shown in price lists and catalogues shall be deemed to apply to unpacked Plant
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
Inspection and Tests
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.
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.
5.3. Acceptance tests will
be carried out and, unless otherwise agreed, will be made at the vendor’s 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 Purchaser’s
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 Purchaser’s 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.
Passing or risk
6.1. 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.
7.1. Unless otherwise
agreed, the delivery period shall run from the latest of the following dates :
date of the formation of the Contract as defined in Clauses 2;
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 ;
date of the receipt by the Vendor of such payment in advance of manufacture as
is stipulated in the Contract.
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 Vendor’s failure to deliver as
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
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
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.
7.5. 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 Vendor’s 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
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.
8.1. 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 Vendor’s right of property or such other rights as
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.
9.1. Subject as hereinafter set out, the
Vendor undertakes to remedy any defect resulting from faulty design, materials
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
9.4. In respect of such parts (whether of
the Vendor’s 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
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.
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
Vendor’s works if the Contract is “ex-works” of F.O.R.
port from which the Vendor dispatched the Plant if the Contract is F.O.B.
F.A.S., C.I.F., or C.& F.
all other cases the frontier of the country from which the Vendor dispatched
in pursuance of paragraph 9 hereof, repairs are required to be effected on
site, the conditions covering the attendance of the Vendor’s representatives on
site shall be such as may be specially agreed between the parties.
parts replaced in accordance with this Clause shall be placed at the disposal
of the Vendor.
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 Vendor’s risk and expense, provided
that he does so in reasonable manner.
Vendor’s liability does not apply to defects arising out of materials provided,
or out of a design stipulated, by the Purchaser.
Vendor’s 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 Purchaser’s faulty maintenance or erection or from alterations carried out
without the Vendor’s consent in writing, or from repairs carried out improperly
by the Purchaser, nor does it cover normal deterioration.
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.
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.
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.
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
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.
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.
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 Vendor’s expenses, the Purchaser shall be entitled to recover the
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.
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
Vendor’s expenses shall be deemed to be that part of the price payable under
the Contract which is properly attributable thereto.
Limitations of damages
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.
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.
Rights at 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
Arbitration and Law applicable
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.
otherwise agreed, the Contract shall be governed by law of the Vendor’s
the parties expressly so agree, but not otherwise, the arbitrators shall, in
giving their ruling, act as amiable compositors.
be completed by parties to the Contract)
to be deducted for each week’s delay 7.3…..per cent
percentage which the deductions above 7.3…. per cent
amount recoverable for non-delivery 7.5….(in the agreed currency)
amount recoverable on termination 7.7….(in the agreed by Vendor for failure to
take delivery or make currency)
of interest on overdue payments 8.7……per cent Per annum
of delay in payment authorising 8.7…..months termination by Vendor.
period for original Plant and 9.7…….months Parts replaced or renewed
extension of guarantee period 9.6…….hours/day
use of Plant
of Guarantee period 9.6……………. for more intensive use.