General Terms and Conditions of Delivery

General Terms and Conditions of Delivery for Products and Services of the Electrical Industry (“Green Terms and Conditions of Delivery” – GL)

for use in business transactions with entrepreneurs

Non-binding recommended terms and conditions from the ZVEI – German Electrical and Electronic Manufacturers' Association.

Stand: January 2018

Article I: General Provisions

  1. These General Terms and Conditions (GTC) apply exclusively to the legal relationship between the supplier and the customer in connection with the supplier's deliveries and/or services (hereinafter referred to as "deliveries"). The customer's general terms and conditions apply only to the extent that the supplier has expressly agreed to them in writing. The scope of the deliveries is determined by the mutually agreed written declarations.
  2. The supplier retains all proprietary and copyright rights to cost estimates, drawings, and other documents (hereinafter referred to as "documents"). These documents may only be made available to third parties with the supplier's prior consent and must be returned to the supplier immediately upon request if the order is not placed with them. Sentences 1 and 2 apply accordingly to documents of the customer; however, these may be made available to third parties to whom the supplier has legitimately subcontracted deliveries.
  3. The customer has a non-exclusive right to use the standard software and firmware with the agreed-upon features in unmodified form on the agreed-upon devices. The customer may create one backup copy of the standard software without an explicit agreement.
  4. Partial deliveries are permissible as long as they are reasonable for the customer.
  5. The term “claims for damages” in these General Terms and Conditions also includes claims for reimbursement of wasted expenses.

Article II: Prices, terms of payment and offsetting

  1. Prices are ex works excluding packaging plus the applicable statutory sales tax.
  2. If the supplier has undertaken the installation or assembly and nothing else has been agreed, the customer shall bear all necessary incidental costs such as travel and transport costs as well as allowances, in addition to the agreed remuneration.
  3. Payments are to be made free to the supplier’s payment office.
  4. The customer may only offset claims that are undisputed or legally established.

Article III: Retention of Title

  1. The delivered goods (goods subject to retention of title) remain the property of the supplier until all claims against the customer arising from the business relationship have been satisfied. If the value of all security rights held by the supplier exceeds the amount of all secured claims by more than 20%, the supplier will release a corresponding portion of the security rights at the customer's request; the supplier has the right to choose which security rights to release.
  2. During the period of retention of title, the customer is prohibited from pledging or assigning the goods as security, and resale is only permitted to resellers in the ordinary course of business and only on the condition that the reseller receives payment from his customer or stipulates that title to the goods will only pass to the customer once he has fulfilled his payment obligations.
  3. If the buyer resells goods subject to retention of title, he hereby assigns to the supplier, as security, all future claims arising from the resale against his customers, including all ancillary rights and any balance claims, without the need for any further declarations. If the goods subject to retention of title are resold together with other items without a separate price being agreed for the goods subject to retention of title, the buyer assigns to the supplier that portion of the total price claim which corresponds to the price invoiced by the supplier for the goods subject to retention of title.
  4. a) The buyer is permitted to process the goods subject to retention of title or to mix or combine them with other items. Such processing is carried out on behalf of the supplier. The buyer shall hold the resulting new item in safe custody for the supplier with the care of a prudent businessperson. The new item shall be considered goods subject to retention of title.
    b) The supplier and the customer hereby agree that if the goods are combined or mixed with other items not belonging to the supplier, the supplier shall in any case be entitled to co-ownership of the new item in proportion to the ratio of the value of the combined or mixed goods subject to retention of title to the value of the other goods at the time of combination or mixing. The new item shall be considered goods subject to retention of title to that extent.
    c) The provision regarding the assignment of claims pursuant to clause 3 also applies to the new item. However, the assignment is limited to the amount corresponding to the value of the processed, combined, or mixed goods subject to retention of title as invoiced by the supplier.
    d) If the customer combines the goods subject to retention of title with real estate or movable property, he hereby assigns to the supplier, without the need for any further special declarations, his claim to which he is entitled as remuneration for the combination, together with all ancillary rights, as security in the amount corresponding to the ratio of the value of the goods subject to retention of title to the other combined goods at the time of combination.
  5. Until further notice, the purchaser is authorized to collect assigned receivables arising from the resale of the goods. If there is a compelling reason, in particular in the event of default of payment, cessation of payments, the opening of insolvency proceedings, protest of a bill of exchange, or reasonable grounds to suspect that the purchaser is over-indebted or facing imminent insolvency, the supplier is entitled to revoke the purchaser's authorization to collect receivables. Furthermore, after prior notification and subject to a reasonable notice period, the supplier may disclose the assignment of receivables, realize the assigned receivables, and demand that the purchaser disclose the assignment of receivables to its own customers.
  6. In the event of attachments, seizures, or other dispositions or interventions by third parties, the purchaser must notify the supplier immediately. Upon demonstration of a legitimate interest, the purchaser must immediately provide the supplier with the information and documents necessary to assert its rights against the customer.
  7. In the event of a breach of contract by the buyer, particularly in the case of late payment, the supplier is entitled, after the unsuccessful expiry of a reasonable period granted to the buyer for performance, not only to take back the goods but also to withdraw from the contract; the statutory provisions regarding the dispensability of setting a deadline remain unaffected. The buyer is obligated to surrender the goods. The taking back of the goods, the assertion of the retention of title, or the seizure of the goods subject to retention of title by the supplier does not constitute a withdrawal from the contract unless the supplier has expressly declared otherwise.

Article IV: Time limits for deliveries; delay

  1. Adherence to delivery deadlines is contingent upon the timely receipt of all documents, necessary permits and approvals to be provided by the customer, particularly plans, as well as the customer's compliance with the agreed payment terms and other obligations. If these conditions are not met in a timely manner, the deadlines will be extended accordingly; this does not apply if the supplier is responsible for the delay.
  2. Is the failure to meet the deadlines due to
    a) force majeure, e.g. mobilization, war, acts of terrorism, riot, or similar events (e.g. strike, lockout),
    b) Virus and other attacks by third parties on the supplier's IT system, insofar as these occurred despite compliance with the usual due diligence in protective measures,
    c) Obstacles due to German, US, or other applicable national, EU, or international foreign trade regulations, or due to other circumstances beyond the supplier's control, or
    d) failure of the supplier to deliver on time or in a proper manner,
    The deadlines will be extended appropriately.
  3. If the supplier is in default, the customer may – provided he can credibly demonstrate that he has suffered damage as a result – demand compensation for each completed week of delay amounting to 0,5%, but not exceeding a total of 5% of the price for the part of the deliveries that could not be used as intended due to the delay.
  4. Claims for damages by the customer due to delayed delivery, as well as claims for damages in lieu of performance exceeding the limits specified in clause 3, are excluded in all cases of delayed delivery, even after the expiry of any delivery deadline set for the supplier. This exclusion does not apply in cases of intent, gross negligence, or liability for injury to life, body, or health. The customer may only withdraw from the contract in accordance with statutory provisions if the delay in delivery is attributable to the supplier. The aforementioned provisions do not entail any shift in the burden of proof to the detriment of the customer.
  5. At the supplier's request, the purchaser is obliged to declare within a reasonable period of time whether he is withdrawing from the contract due to the delay in delivery or whether he is insisting on delivery.
  6. If shipment or delivery is delayed at the customer's request by more than one month after notification of readiness for shipment, the customer may be charged storage fees of 0,5% of the price of the goods for each additional month or part thereof, up to a maximum of 5% in total. The parties remain free to prove higher or lower storage costs.

Article V: Transfer of Risk

  1. The risk shall pass to the purchaser as follows, even in the case of freight-free delivery:
    a) in the case of delivery without installation or assembly, once the goods have been dispatched or collected. At the buyer's request and expense, the supplier will insure the delivery against the usual transport risks;
    b) in the case of delivery with installation or assembly on the day of acceptance into own operation or, if agreed, after successful trial operation.
  2. If the dispatch, delivery, commencement, execution of the installation or assembly, acceptance into own operation or trial operation is delayed for reasons attributable to the customer, or if the customer is in default of acceptance for other reasons, the risk passes to the customer.

Article VI: Installation and Assembly

Unless otherwise agreed in writing, the following provisions apply to installation and assembly:

  1. The purchaser must take over and provide in a timely manner at his own expense:
    a) all earthworks, construction work and other ancillary work not related to the industry, including the necessary skilled and unskilled workers, building materials and tools;
    b) the supplies and materials required for assembly and commissioning, such as scaffolding, lifting equipment and other devices, fuels and lubricants;
    c) Energy and water at the point of use, including connections, heating and lighting;
    d) at the assembly site, sufficiently large, suitable, dry and lockable rooms for storing machine parts, equipment, materials, tools, etc., and adequate work and break rooms for the assembly personnel, including sanitary facilities appropriate to the circumstances; furthermore, the purchaser shall take the same measures to protect the property of the supplier and the assembly personnel on the construction site as he would take to protect his own property;
    e) Protective clothing and protective equipment required due to special circumstances at the assembly site.
  2. Before the start of the assembly work, the customer must provide the necessary information on the location of concealed electricity, gas, water pipes or similar systems as well as the required static information without being asked to do so.
  3. Before the start of assembly or installation, all necessary equipment and materials must be present at the assembly or installation site, and all preparatory work must be sufficiently advanced to allow assembly or installation to begin as agreed and proceed without interruption. Access routes and the assembly or installation site must be level and clear.
  4. If the installation, assembly or commissioning is delayed due to circumstances beyond the control of the Supplier, the Customer shall bear the costs of waiting time and additional travel required by the Supplier or the assembly personnel to a reasonable extent.
  5. The Purchaser must immediately confirm to the Supplier on a weekly basis the duration of the assembly personnel’s working hours and the completion of installation, assembly or commissioning.
  6. If the supplier requests acceptance of the delivery upon completion, the customer must carry out the acceptance within two weeks. Acceptance is deemed to have occurred if the customer allows the two-week period to expire or if the delivery has been put into use – possibly after completion of an agreed test phase.

Article VII: Receipt

The purchaser may not refuse to accept deliveries due to minor defects.

Article VIII: Material Defects

The supplier is liable for material defects as follows:

  1. All parts or services that have a material defect shall be repaired, replaced or re-performed free of charge at the supplier's discretion, provided that the cause of the defect was already present at the time of the transfer of risk.
  2. Claims for subsequent performance become time-barred 12 months from the statutory commencement of the limitation period; the same applies to rescission and price reduction. This period does not apply:
    – insofar as the law prescribes longer periods in accordance with Sections 438 Paragraph 1 No. 2 (buildings and items for buildings) and 634a Paragraph 1 No. 2 (construction defects) of the German Civil Code (BGB),
    – in case of intent,
    – in cases of fraudulent concealment of the defect, as well as
    – in the event of non-compliance with a quality guarantee.
    Claims for reimbursement of expenses by the buyer pursuant to Section 445a of the German Civil Code (BGB) (recourse of the seller) also become statute-barred after 12 months from the statutory commencement of the limitation period, provided that the last contract in the supply chain is not a consumer goods purchase. The statutory provisions regarding suspension, interruption, and recommencement of limitation periods remain unaffected.
  3. Any complaints from the customer must be made in writing without delay.
  4. In the event of warranty claims, the buyer may withhold payments to an extent proportionate to the defects. The buyer has no right to withhold payment if their warranty claims are time-barred. If the notice of defects was unjustified, the supplier is entitled to claim reimbursement from the buyer for any expenses incurred.
  5. The supplier must be given the opportunity to remedy the defect within a reasonable period.
  6. If the subsequent performance fails, the customer may – without prejudice to any claims for damages pursuant to clause 10 – withdraw from the contract or reduce the remuneration.
  7. Claims for defects do not exist in the case of only minor deviations from the agreed quality, only minor impairment of usability, natural wear and tear, or damage that occurs after the transfer of risk as a result of faulty or negligent handling, excessive strain, unsuitable operating materials, defective construction work, unsuitable building ground, or due to special external influences not anticipated by the contract, as well as in the case of non-reproducible software errors. If the customer or third parties carry out improper modifications, installation/removal, or repair work, no claims for defects exist for these modifications or the resulting consequences.
  8. The buyer's claims for expenses incurred for the purpose of subsequent performance are excluded to the extent that the expenses increase because the delivered item was subsequently moved to a location other than the buyer's place of business, unless such relocation corresponds to its intended use. This also applies to the buyer's claims for reimbursement of expenses pursuant to Section 445a of the German Civil Code (BGB) (recourse of the seller), provided that the final contract in the supply chain is not a consumer goods purchase.
  9. Recourse claims of the purchaser against the supplier pursuant to § 445a BGB (recourse of the seller) exist only insofar as the purchaser has not made any agreements with his customer that go beyond the statutory warranty claims.
  10. Claims for damages by the purchaser due to a defect are excluded. This does not apply in cases of fraudulent concealment of the defect, breach of a warranty of quality, injury to life, body or health, or intentional or grossly negligent breach of duty by the supplier. The aforementioned provisions do not entail any shift in the burden of proof to the detriment of the purchaser. Further claims by the purchaser due to a defect, or claims other than those regulated in this Article VIII, are excluded.

Article IX: Industrial property rights and copyrights; defects of title

  1. Unless otherwise agreed, the supplier is obligated to deliver the goods only in the country of the place of delivery without infringing any third-party industrial property rights or copyrights (hereinafter referred to as "intellectual property rights"). If a third party asserts justified claims against the customer due to the infringement of intellectual property rights by goods delivered by the supplier and used in accordance with the contract, the supplier shall be liable to the customer within the period specified in Article VIII, Section 2, as follows:
    a) The supplier shall, at its own discretion and expense, either obtain a right of use for the deliveries in question, modify them so that the intellectual property right is not infringed, or replace them. If this is not possible for the supplier under reasonable conditions, the purchaser shall be entitled to the statutory rights of withdrawal or price reduction.
    b) The supplier's obligation to pay damages is governed by Article XII.
    c) The supplier's aforementioned obligations only apply if the purchaser immediately notifies the supplier in writing of any claims asserted by a third party, does not acknowledge any infringement, and reserves all rights to defend against such claims and to conduct settlement negotiations. If the purchaser discontinues use of the delivery for reasons of damage mitigation or other important reasons, the purchaser is obligated to inform the third party that the discontinuation of use does not constitute an acknowledgment of any infringement of intellectual property rights.
  2. The customer's claims are excluded to the extent that he is responsible for the infringement of intellectual property rights.
  3. Furthermore, the customer's claims are excluded insofar as the infringement of intellectual property rights is caused by specific requirements of the customer, by an application not foreseeable by the supplier, or by the fact that the delivery is modified by the customer or used together with products not supplied by the supplier.
  4. In the event of infringements of intellectual property rights, the provisions of Article VIII, Nos. 4, 5, 8 and 9 shall apply accordingly to the claims of the Customer regulated in No. 1a).
  5. If other legal defects exist, the provisions of Article VIII shall apply accordingly.
  6. Any further claims of the Purchaser against the Supplier and its vicarious agents due to a legal defect or claims other than those regulated in this Article IX are excluded.

Article X: Reservation of performance

  1. The fulfillment of the contract is subject to the condition that there are no obstacles due to German, US, or other applicable national, EU, or international foreign trade regulations, as well as no embargoes or other sanctions.
  2. The customer is obliged to provide all information and documents required for export, transfer or import.

Article XI: Impossibility; Contract Adjustment

  1. If delivery is impossible, the buyer is entitled to claim damages, unless the supplier is not responsible for the impossibility. However, the buyer's claim for damages is limited to 10% of the value of that part of the delivery that cannot be used for its intended purpose due to the impossibility. This limitation does not apply in cases of intent, gross negligence, or liability for injury to life, body, or health; this does not entail any shift in the burden of proof to the detriment of the buyer. The buyer's right to withdraw from the contract remains unaffected.
  2. If events as defined in Article IV, Section 2(a) to (c) significantly alter the economic significance or content of the delivery or have a significant impact on the supplier's operations, the contract will be appropriately adjusted in accordance with the principles of good faith. If such an adjustment is not economically feasible, the supplier has the right to withdraw from the contract. The same applies if necessary export licenses are not granted or are unusable. If the supplier intends to exercise this right of withdrawal, they must inform the customer immediately upon becoming aware of the extent of the event, even if an extension of the delivery period had initially been agreed upon with the customer.

Article XII: Other claims for damages

  1. Unless otherwise stipulated in these General Terms and Conditions, claims for damages by the customer, regardless of the legal basis, in particular for breach of obligations arising from the contractual relationship and from tort, are excluded.
  2. This does not apply insofar as liability is governed as follows:
    a) according to the Product Liability Act,
    b) in case of intent,
    c) in the case of gross negligence on the part of owners, legal representatives or senior employees,
    d) in case of fraudulent intent,
    e) in the event of non-compliance with a guarantee assumed,
    f) for culpable injury to life, body or health, or
    g) due to the culpable breach of essential contractual obligations.
    However, the claim for damages for breach of essential contractual obligations is limited to the foreseeable damage typical for this type of contract, unless one of the aforementioned cases applies.
  3. The above provisions do not involve a change in the burden of proof to the detriment of the customer.

Article XIII: Jurisdiction and applicable law

  1. If the customer is a merchant, the sole place of jurisdiction for all disputes arising directly or indirectly from the contractual relationship is the registered office of the supplier. However, the supplier is also entitled to bring an action at the customer's registered office.
  2. This contract, including its interpretation, is governed by German law, excluding the United Nations Convention on Contracts for the International Sale of Goods (CISG).

Article XIV: Binding Nature of the Treaty

Even if individual provisions are legally invalid, the contract remains binding in its remaining parts.
This does not apply if adhering to the contract would constitute an unreasonable hardship for one party.

General Conditions for the Supply of Products and Services of the Electrical and Electronics Industry (“Green Delivery Conditions” – GL)*

for commercial transactions between businesses

recommended by ZVEI - Central Association of the Electrical and Electronics Industry

as of January 2018

Article I: General Provisions

  1. Legal relations between Supplier and Purchaser in connection with supplies and/or services of the Supplier (hereinafter referred to as “Supplies”) shall be solely governed by the present GL. The Purchaser's general terms and conditions shall apply only if expressly accepted by the Supplier in writing. The scope of delivery shall be determined by the congruent mutual written declarations.
  2. The Supplier herewith reserves any industrial property rights and/or copyrights and rights of use pertaining to its cost estimates, drawings and other documents (hereinafter referred to as “Documents”). The Documents shall not be made accessible to third parties without the Supplier's prior consent and shall, upon request, be returned without undue delay to the Supplier if the contract is not awarded to the Supplier. Sentences 1 and 2 shall apply mutatis mutandis to the Purchaser's Documents; These may, however, be made accessible to those third parties to whom the Supplier has rightfully subcontracted Supplies.
  3. The Purchaser has the non-exclusive right to use standard software and irmware, provided that it remains unchanged, is used within the agreed performance parameters, and on the agreed equipment. Without express agreement the Purchaser may make one back-up copy of standard software.
  4. Partial deliveries are allowed, unless they are unreasonable to accept for the purchaser.
  5. The term “claim for damages” used in the present GL also includes claims for compensation for useless expenditure.

Article II: Prices, Terms of Payment, and Set-Off

  1. Prices are ex works and excluding packaging; value added tax shall be added at the then applicable rate.
  2. If the Supplier is also responsible for assembly or erection and unless otherwise agreed, the Purchaser shall pay the agreed remuneration and any incidental costs required, including for traveling and transport as well as allowances.
  3. Payments shall be made free Supplier's paying office.
  4. The Purchaser may set off only those claims which are undisputed or non-appealable.

Article III: Retention of Title

  1. The items pertaining to the Supplies (“Retained Goods”) shall remain the Supplier's property until each and every claim the Supplier has against the Purchaser on account of the business relationship has been fulfilled. If the combined value of the Supplier's security interests exceeds the value of all secured claims by more than 20%, the Supplier shall release a corresponding part of the security interest if so requested by the Purchaser; the Supplier shall be entitled to choose which security interest it wishes to release.
  2. For the duration of the retention of title, the Purchaser may not pledge the Retained Goods or use them as security, and resale shall be possible only for resellers in the ordinary course of their business and only on condition that the reseller receives payment from its customer or makes the transfer of property to the customer dependent upon the customer fulfilling its obligation to effect payment.
  3. Should Purchaser resell Retained Goods, it assigns to the Supplier, already today, all claims it will have against its customers out of the resale, including any collateral rights and all balance claims, as security, without any subsequent declarations to this effect being necessary. If the Retained Goods are sold on together with other items and no individual price has been agreed with respect to the Retained Goods, Purchaser shall assign to the Supplier such fraction of the total price claim as is attributable to the price of the Retained Goods invoiced by Supplier.
  4. (a) Purchaser may process, amalgamate or combine Retained Goods with other items. Processing is made for suppliers. Purchaser shall store the new item thus created for Supplier, exercising the due care of a diligent business person. The new items are considered as retained goods.
    (b) Already today, Supplier and Purchaser agree that if Retained Goods are combined or amalgamated with other items that are not the property of Supplier, Supplier shall acquire co-ownership in the new item in proportion of the value of the Retained Goods combined or amalgamated to the other items at the time of combination or amalgamation. In this respect, the new items are considered as retained goods.
    (c) The provisions on the assignment of claims according to No. 3 above shall also apply to the new item. The assignment, however, shall only apply to the amount corresponding to the value invoiced by Supplier for the Retained Goods that have been processed, combined or amalgamated.
    (d) Where Purchaser combines Retained Goods with real estate or movable goods, it shall, without any further declaration being necessary to this effect, also assign to Supplier as security its claim to consideration for the combination, including all collateral rights for the prorata amount of the value the combined Retained Goods have on the other combined items at the time of the combination.
  5. Until further notice, Purchaser may collect assigned claims relating to the resale. Supplier is entitled to withdraw Purchaser's permission to collect funds for good reason, including, but not limited to, delayed payment, suspension of payments, start of insolvency proceedings, protest or justified indications for overindebtedness or pending insolvency of Purchaser. In addition, Supplier may, upon expiry of an adequate period of notice, disclose the assignment, realize the claims assigned and demand that Purchaser informs its customer of the assignment.
  6. The Purchaser shall inform the Supplier forthwith of any seizure or other act of intervention by third parties. If a reasonable interest can be proven, Purchaser shall, without undue delay, provide Supplier with the information and/or Documents necessary to assert the claims it has against its customers.
  7. Where the Purchaser fails to fulfill its duties, fails to make payment due, or otherwise violates its obligations the Supplier shall be entitled to rescind the contract and take back the Retained Goods in the case of continued failure following expiry of a reasonable remedy period set by the Supplier; the statutory provisions providing that a remedy period is not needed shall be unaffected. The Purchaser shall be obliged to return the Retained Goods. The fact that the Supplier takes back Retained Goods and/or exercises the retention of title, or has the Retained Goods seized, shall not be construed to constitute a rescission of the contract, unless the Supplier so expressly declares.

Article IV: Time for Supplies; delay

  1. Times set for Supplies shall only be binding if all Documents to be furnished by the Purchaser, necessary permits and approvals, especially concerning plans, are received in time and if agreed terms of payment and other obligations of the Purchaser are fulfilled. If these conditions are not fulfilled in time, times set shall be extended reasonably; this shall not apply if the Supplier is responsible for the delay.
  2. If non-observance of the times set is due to:
    (a) force majeure, such as mobilization, war, terror attacks, rebellion or similar events (eg strike or lockout);
    (b) virus attacks or other attacks on the Supplier's IT systems occurring despite protective measures were in place that complied with the principles of proper care;
    (c) hindrances attributable to German, US or otherwise applicable national, EU or international rules of foreign trade law or to other circumstances for which Supplier is not responsible; or
    (d) the fact that Supplier does not receive its own supplies in due time or in due form such times shall be extended accordingly.
  3. If the Supplier is responsible for the delay (hereinafter referred to as “Delay”) and the Purchaser has demonstrably suffered a loss therefrom, the Purchaser may claim a compensation as liquidated damages of 0.5% for every completed week of Delay, but in no case more than a total of 5% of the price of that part of the Supplies which due to the Delay could not be put to the intended use.
  4. Purchaser's claims for damages due to delayed supplies as well as claims for damages in lieu of performance exceeding the limits speciied in No. 3 above are excluded in all cases of delayed Supplies, even upon expiry of a time set to the Supplier to effect the Supplies. This shall not apply in cases of liability based on intent, gross negligence, or due to loss of life, bodily injury or damage to health. Rescission of the contract by the Purchaser based on statute is limited to cases where the Supplier is responsible for the delay. The above provisions do not imply a change in the burden of proof to the detriment of the Purchaser.
  5. At the Supplier's request, the Purchaser shall declare within a reasonable period of time whether it, due to the delayed Supplies, rescinds the contract or insists on the delivery of the Supplies
  6. If dispatch or delivery, due to Purchaser's request, is delayed by more than one month after notification of the readiness for dispatch was given, the Purchaser may be charged, for every additional month commenced, storage costs of 0.5% of the price of the items of the Supplies, but in no case more than a total of 5%. The parties to the contract may prove that higher or, as the case may be, lower storage costs have been incurred.

Article V: Passing of Risk

  1. Even where delivery has been agreed freight free, the risk shall pass to the Purchaser as follows:
    (a) if the delivery does not include assembly or erection, at the time when it is shipped or picked up by the carrier. Upon the Purchaser's request, the Supplier shall insure the delivery against the usual risks of transport at the Purchaser's expense;
    (b) if the delivery includes assembly or erection, at the day of taking over in the Purchaser's own works or, if so agreed, after a successful trial run.
  2. The risk shall pass to the Purchaser if dispatch, delivery, the start or performance of assembly or erection, the taking over in the Purchaser's own works, or the trial run is delayed for reasons for which the Purchaser is responsible or if the Purchaser has otherwise failed to accept the Supplies.

Article VI: Assembly and Erection

Unless otherwise agreed in written form, assembly and erection shall be subject to the following provisions:

  1. Purchaser shall provide at his own expense and in due time:
    (a) all earth and construction work and other ancillary work outside the Supplier's scope, including the necessary skilled and unskilled labor, construction materials and tools;
    (b) the equipment and materials necessary for assembly and commissioning such as scaffolds, lifting equipment and other devices as well as fuels and lubricants;
    (c) energy and water at the point of use including connections, heating and lighting;
    (d) suitable dry and lockable rooms of sufficient size adjacent to the site for the storage of machine parts, apparatus, materials, tools, etc. and adequate working and recreation rooms for the erection personnel, including sanitary facilities as are appropriate in the specific circumstances; furthermore, the Purchaser shall take all measures it would take for the protection of its own possessions to protect the possessions of the Supplier and of the erection personnel at the site;
    (e) protective clothing and protective devices needed due to particular conditions prevailing on the speciic site.
  2. Before the erection work starts, the Purchaser shall unsolicitedly make available any information required concerning the location of concealed electric power, gas and water lines or of similar installations as well as the necessary structural data.
  3. Prior to assembly or erection, the materials and equipment necessary for the work to start must be available on the site of assembly or erection and any preparatory work must have advanced to such a degree that assembly or erection can be started as agreed and carried out without interruption. Access roads and the site of assembly or erection must be level and clear.
  4. If assembly, erection or commissioning is delayed due to circumstances for which the Supplier is not responsible, the Purchaser shall bear the reasonable costs incurred for idle times and any additional traveling expenditure of the Supplier or the erection personnel.
  5. The Purchaser shall attest to the hours worked by the erection personnel towards the Supplier at weekly intervals and the Purchaser shall immediately conirm in written form if assembly, erection or commissioning has been completed.
  6. If, after completion, the Supplier demands acceptance of the Supplies, the Purchaser shall comply therewith within a period of two weeks. The same consequences as upon acceptance arise if and when the Purchaser lets the two week period expire or the Supplies are put to use after completion of agreed test phases, if any.

Article VII: Receiving Supplies

The Purchaser shall not refuse to receive Supplies due to minor defects.

Article VIII: Defects as to Quality

The Supplier shall be liable for defects as to quality
(“Material defects”, after referred to as “Defects”,) as follows:

  1. Defective parts or defective services shall be, at the Supplier's discretion, repaired, replaced or provided again free of charge, provided that the reason for the Defect had already existed at the time when the risk passed.
  2. Claims for repair or replacement are subject to a statute of limitations of 12 months calculated from the start of the statutory statute of limitations; the same shall apply mutatis mutandis in the case of rescission and reduction. This shall not apply:
    – where longer periods are prescribed by law according to Sec. 438 para. 1 No. 2 (buildings and things used for a building), and Sec. 634a para. 1 No. 2 (defects of a building) German Civil Code (“Civil Code”),
    – in the case of intent,
    – in the case of fraudulent concealment of the defect or
    – non-compliance with guaranteed characteristic (“quality guarantee”).
    Claims for the reimbursement of expenses on the part of the Purchaser in accordance with Sec. 445a BGB (entrepreneur's
    right of recourse) shall likewise be subject to a statute of limitations of 12 months from the start of the statutory statute of limitations, provided the last contract in the supply chain is not a sale of consumer goods.
    The legal provisions regarding suspension of the statute of limitations (“Ablaufhemmung”, “Hemmung”) and recommendation of limitation periods shall be unaffected.
  3. Notifications of Defect by the Purchaser shall be given in written form without undue delay.
  4. In the case of claims for Defects, the Purchaser may withhold payments to an amount that is in a reasonable proportion to the Defect. The Purchaser has no right to withhold payments to the extent that its claim of a Defect is time-barred Unjustified notices of Defect shall entitle the Supplier to demand reimbursement of its expenses by the Purchaser.
  5. The Supplier shall be given the opportunity to repair or to replace the defective good (“subsequent performance”) within a reasonable period of time.
  6. If repair or replacement is unsuccessful, the Purchaser is entitled to rescind the contract or reduce the remuneration; any claims for damages the Purchaser may have according to No. 10 shall be unaffected.
  7. There shall be no claims based on Defect in cases of insigniicant deviations from the agreed quality, of only minor impairment of usability, of natural wear and tear, or damage arising after the passing of risk from faulty or negligent handling, excessive strain, unsuitable equipment, defective civil works, inappropriate foundation soil, or claims based on particular external inluences not assumed under the contract, or from non-reproducible software errors. Claims based on defects attributable to improper modifications, installation/removal, or repair work carried out by the Purchaser or third parties and the consequences thereof are likewise excluded.
  8. The Purchaser shall have no claim with respect to expenses incurred in the course of supplementary performance, to the extent that expenses are increased because the subject matter of the Supplies has subsequently been brought to another location than the Purchaser's branch of ice, unless doing so complies with the normal use of the Supplies. This applies accordingly to claims for the reimbursement of expenses on the part of the Purchaser in accordance with Sec. 445a BGB (entrepreneur's right of recourse), provided the last contract in the supply chain is not a sale of consumer goods.
  9. The Purchaser's right of recourse against the Supplier pursuant to Sec. 445a BGB (entrepreneur's right of recourse) is limited to cases where the Purchaser has not concluded an agreement with its customers exceeding the scope of the statutory provisions governing claims based on Defects.
  10. The Purchaser shall have no claim for damages based on Defects. This shall not apply to the extent that a Defect has been fraudulently concealed, the guaranteed characteristics are not complied with, in the case of loss of life, bodily injury or damage to health, and/or intentionally or grossly negligent breach of contract on the part of the Supplier. The above provisions do not imply a change in the burden of proof to the detriment of the Purchaser. Any other or additional claims of the Purchaser exceeding the claims provided for in this Article VIII, based on a Defect, are excluded.

Article IX: Industrial Property Rights and Copyrights; Defects in title

  1. Unless otherwise agreed, the Supplier shall provide the Supplies in the country of the place of delivery only, without infringing any third-party industrial property rights and copyrights (hereinafter referred to as “IPR”). If a third party asserts a justified claim against the Purchaser based on an infringement of an IPR by the Supplies made by the Supplier and used in conformity with the contract, the Supplier shall be liable to the Purchaser within the time period stipulated in Article VIII No. 2 as follows:
    (a) The Supplier shall choose whether to acquire, at its own expense, the right to use the IPR with respect to the Supplies concerned or whether to modify the Supplies such that they no longer infringe the IPR or replace them. If this would be impossible for the Supplier under reasonable conditions, the Purchaser may rescind the contract or reduce the remuneration pursuant to the applicable statutory provisions;
    (b) The Supplier's liability to pay damages is governed by Article XII;
    (c) The above obligations of the Supplier shall apply only if the Purchaser (i) immediately notifies the Supplier of any such claim asserted by the third party in written form, (ii) does not admit the existence of an infringement and (iii) leaves any protective measures and settlement negotiations to the Supplier's discretion. If the Purchaser stops using the Supplies in order to reduce the damage or for other good reason, it shall be obliged to point out to the third party that no acknowledgment of the alleged infringement may be inferred from the fact that the use has been discontinued.
  2. Claims of the Purchaser shall be excluded if it is responsible for the infringement of an IPR.
  3. Claims of the Purchaser are also excluded if the infringement of the IPR is caused by specifications made by the Purchaser, by a type of use not foreseeable by the Supplier or by the Supplies being modiied by the Purchaser or being used together with products not provided by the Supplier.
  4. In addition, with respect to claims by the Purchaser pursuant to No. 1 a) above, Article VIII Nos. 4, 5, 8, and 9 shall apply mutatis mutandis in the event of an infringement of an IPR.
  5. Where other defects in title occur, Article VIII shall apply mutatis mutandis.
  6. Any other claims of the Purchaser against the Supplier or its agents or any such claims exceeding the claims provided for in this Article IX, based on a defect in title, are excluded.

Article X: Conditional Performance

  1. The performance of this contract is conditional upon that no hindrances attributable to German, US or otherwise applicable national, EU or international rules of foreign trade law or any embargoes or other sanctions exist.
  2. The Purchaser shall provide any information and documents required for export, transport and import purposes.

Article XI: Impossibility of Performance; Adaptation of Contract

  1. To the extent that delivery is impossible, the Purchaser is entitled to claim damages, unless the Supplier is not responsible for the impossibility. The Purchaser's claim for damages is, however, limited to an amount of 10% of the value of the part of the Supplies which, owing to the impossibility, cannot be put to the intended use. This limitation shall not apply in the case of liability based on intent, gross negligence or loss of life, bodily injury or damage to health; this does not imply a change in the burden of proof to the detriment of the purchaser. The Purchaser's right to rescind the contract shall be unaffected.
  2. Where events within the meaning of Article IV No. 2 (a) to (c) substantially change the economic importance or the contents of the Supplies or considerably affect the Supplier's business, the contract shall be adapted taking into account the principles of reasonableness and good faith. To the extent this is not justiiable for economic reasons, the Supplier shall have the right to rescind the contract. The same applies if required export permits are not granted or cannot be used. If the Supplier intends to exercise its right to rescind the contract, it shall notify the Purchaser thereof without undue delay after having realized the repercussions of the event; this shall also apply even where an extension of the delivery period has previously been agreed with the Purchaser.

Article XII: Other Claims for Damages

  1. otherwise provided for in the present GL, Unless the Purchaser has no claim for damages based on whatever legal reason, including infringement of duties arising in connection with the contract or tort.
  2. This does not apply if liability is based on:
    (a) the German Product Liability Act (“Product Liability Act”);
    (b) intent;
    (c) gross negligence on the part of the owners, legal representatives or executives;
    (d) fraud;
    (e) failure to comply with a guarantee granted;
    (f) negligent injury to life, limb or health; or
    (g) negligent breach of a fundamental condition of contract (“essential contractual obligations”).
    However, claims for damages arising from a breach of a fundamental condition of contract shall be limited to the foreseeable damage which is intrinsic to the contract, provided that no other of the above case applies.
  3. The above provision does not imply a change in the burden of proof to the detriment of the Purchaser.

Article XIII: Venue and Applicable Law

  1. If the Purchaser is a businessman, sole venue for all disputes arising directly or indirectly out of the contract shall be the Supplier's place of business. However, the Supplier may also bring an action at the Purchaser's place of business.
  2. This contract and its interpretation shall be governed by German law, to the exclusion of the United Nations Convention on contracts for the International Sale of Goods (CISG).

Article XIV: Severability Clause

The legal invalidity of one or more provisions of this Agreement in no way affects the validity of the remaining provisions. This shall not apply if it would be unreasonably onerous for one of the parties to be obligated to continue the contract.