General Terms

General Terms

General Terms of Sale and Delivery to Foreign Countries

effective June 2002

I. General 

1. The Seller
Postfach 10 02 64
D-91207 Lauf a.d. Pegn. 

2. These General Terms of Sale shall apply if the contracting parties make express reference hereto in their agreement; they shall apply subject to any amendments to these General Terms of Sale which may be agreed upon expressly and in writing between the parties. Customers general terms of purchase which are at variance to these General Terms of Sale shall be non-binding unless expressly agreed to by Seller; the foregoing shall also apply in the event that Seller has not expressly opposed the application of such general terms of Purchase or that seller - while being aware of said general terms of purchase - has effected the delivery without expressly opposing their application. Besides these General Terms of Sale the "International Commercial Terms"(INCOTERMS 2000) published by the International Chamber of Commerce shall apply. 

3. Amendments, changes or sub-agreements with respect to the contract require the written confirmation of the Seller. The assurance of a particular quality of the article of purchase is valid only when given in writing. 

4. The Seller reserves the right of ownership and copyright on cost calculations, drawings and other documents. These may not be used, copied or made available to third parties without the prior consent of the Seller. These are to be returned upon Sellers request. 

5. Data supplied by the Seller concerning specifications, documents and illustrations about performance, operating costs, speeds, weights and measures, consumption etc. are close approximations and are not assured qualities. 

II. Offer and Conclusion of the Agreement 

1. The offers by the Seller are not binding. The closing of an agreement takes effect only after the Seller has given acknowledgement of the order in writing. 

2. The contractual obligations shall be determined by the Sellers written acknowledgement of the order, any amendments and sub-agreements as well as these General Terms. 

3. The Seller reserves the right to make changes with respect to construction, material and design to the extent that they do not affect the usefulness of the article of purchase. 

4. In cases where import and export licenses or authorization for currency transactions or similar authorizations are required for the implementation of the contract and where no other arrangement in the contract applies the Buyer shall make all efforts to obtain the required licenses and authorizations in time. If after a period of 12 months, beginning with the signing of the contract, the necessary licenses or authorizations have not been obtained, then the Seller may consider the agreement not concluded. In such case the Seller shall notify the Buyer of his decision without delay. 

III. Price and Terms of Payment 

1. The prices are understood to be ex plant net prices for delivery without packing, as long as no other agreement has been made. The prices charged will be those valid on the day of delivery. 

2. In the event of currency fluctuations, upon the Sellers demand, the prices will increase at the rate at which the agreed currency has changed in comparison to the currency of the Sellers price list at the time of the currency agreement. 

3. Import duties, consular fees and other taxes and tariffs based on regulations in the receiving country are only included in the price by express agreement. If such tariffs, fees and taxes have been included in the price, then the agreed price will increase to the extent the rates of such tariffs, fees and taxes have increased since the conclusion of the agreement. 

4. The Seller is only bound to comply with foreign packing, weight and customs regulations if the Buyer supplies exact information about those regulations. 

5. In the event of deliveries in part the Seller may bill Buyer in part accordingly. 

6. All payments are to be made in the currency agreed upon. So long as no other agreement has been arranged - in particular, payment against an irrevocable letter of credit - payments shall be made in cash without reductions as follows: 50 % of the order value upon placing the order, the other 50 % 

a) For delivery ex plant, F.O.B., F.C.A., and F.A.S. payment upon notice of readiness to dispatch the item of agreement. 

b) for deliveries C.&F. and deliveries requiring further obligations on the part of the Seller, for example C.I.F., ex ship, ex dock, payment upon receiving documents for a shipment in Europe, however, not later than one month following notice of readiness to dispatch. 

The Seller may demand an irrevocable letter of credit at a bank of his choice and securities for payments due. 

Orders, checks and bills shall only be accepted after special agreement and on account of performance and subject to Buyer bearing all collection and discount charges, subject to discountability. Re-negotiation and prolongation do not constitute performance. 

7. In the event of default of payments past-due, interest of 8 % above the German Federal Banks base rate shall be charged. The past-due interest shall be set either higher or lower if the seller proves a higher interest rate charge or if the Buyer proves a lower charge. 

8. Violation of the conditions of payment or circumstances which, after the signing of the agreement, become known to the Seller and which considerably lessen the Buyers credibility from a banking viewpoint, and after a warning notice with an extension period has been issued, all accounts receivable will become due immediately, without consideration to payment periods of received bills. In this case the Seller is entitled to execute remaining deliveries and services only against advanced payments or collateral security, or after expiration of an appropriate period the Seller is entitled to withdraw from the agreement while maintaining claims on compensation for expenditures. In the event of the Sellers withdrawal, the Buyer, as long as he or a third party had the article of sale in possession after delivery, is required to compensate for any depreciation arising from the use of the article of sale or other decrease in the value of article of sale, also if the Buyer is not at fault. The Seller may demand compensation for the actual uses and depreciations or, if he so chooses, charge a flat compensation of 3 % of the purchase price per month, unless the Buyer can establish a lower damage. 

9. Buyers rights to withhold payment or to set off shall be excluded unless Buyers counter-claims have been finally decided by a court or accepted by Seller. 

10. The Buyer agrees to the offsetting of his debts and liabilities by Seller and Sellers Entrepreneurial Group. All prerequisites shall be based on the date of order rather than the date when the payments are due. If payments are due on varying dates, charges shall be based on value date. If a current account is maintained, the set-off shall refer to the balance of the account. 

11. If Seller accepts to take back supplied parts, Seller is authorized to invoice the Buyer for 10 % of the gross value of these parts upon return. 

IV. Period of Delivery 

1. Periods of delivery begin with the signing of the contract, however, not before receipt and clarification of all required documents and prior to agreement on design as well as receipt of all official authorizations. If prior to delivery the Buyer demands a different design on any point of the article of purchase, then the delivery term shall be interpreted until that day on which agreement is reached on the design and, if necessary, extended by the period required for a different design. In the event that work is interrupted due to the Buyers demand the Buyer shall bear the additional expenses. 

2. Delivery periods are complied with if the item of purchase is ready for dispatch and the Buyer has been notified accordingly. 

3. Deliveries in part are permitted. 

4. In the event of Acts of God or of any other circumstances being outside the Sellers control, including industrial disputes, the delivery period shall be extended by the duration of such event. This applies also in case such hindrances occur during an already existing delay. 

5. After exceeding a delivery term by six weeks the Buyer may request the Seller in writing to deliver within a reasonable period of time. If this extended period expires ineffectually the Seller enters default; the Seller does not enter default so long as the Buyer does not comply with the contractual obligations undertaken by him. 

6. In the event of the Sellers default the Buyer is entitled to claim only a flat compensation for the foreseeable damage. The flat compensation for each entire week exceeding the expiration of the term shall be 0,5 %, however, altogether not more than 5 % of the part of the delivery or of the entire delivery which is not delivered in time because of default. 

7. If the Buyer delays the term of delivery by failing to prove necessary assistance, for example to supply installation, reconstruction and extension equipment, and does not accept the article of purchase after passage of the risk or does not comply with his payment obligations, then the Seller, after issuing a warning with a remedy period, may withdraw from the contract or demand compensation due to breach of contract. In the latter case the Seller is entitled to demand either compensation for the actual damage or, alternatively, flat compensation amounting to 15 % of the purchase price, unless Buyer can establish a lower damage. Alternatively, after the period of respite expires ineffectually, the Seller is entitled to otherwise dispose of the article of purchase and to deliver to the Buyer with an appropriate time extension. 

V. Passage of the Risk 

1. If the passing of the risk is not determined by the international rules for the standard interpretation of the agreed INCOTERMS 2000, risk passes to the Buyer upon dispatching the article of purchase or its parts or components. If the shipment in these cases is delayed due to circumstances outside the Sellers control, risk passes to the Buyer on the time of notice of readiness of dispatch. 

2. If the shipment is delayed resulting from circumstances within the Buyers control, in particular if the Buyer fails to provide necessary assistance or other obligations as agreed in the INCOTERMS, the risk passes - in possible deviation from the rules on interpretation of the INCOTERMS - to the Buyer also on the day of readiness of dispatch. 

3. If the risk passes to the Buyer because of delays in shipment outside of the Sellers control, then, as of the day of the resulting warning the Buyer must pay all storage costs charged by third parties or in the event of storage by the Seller, 0,5 % of the amount of the order per month.

4. After passage of the risk the Seller is entitled to insure the item of purchase against fire, transportation, or other damage at the cost of the Buyer, unless the Buyer has obtained an insurance policy against such damage or the agreed INCOTERMS impose an insurance obligation upon the Seller. 

VI. Retention of Title 

1. The Seller retains the title to all articles of purchase until all payments due to him resulting from business relations with the Buyer have been paid. In the event of a current account, the items retained under title serve as security for the balance due. 

To the extent that the validity of the retention of title is dependent upon special formal requirements or regulations according to the laws of the Buyers country, in particular registration with the proper authority, the Buyer shall fulfill these requirements and regulations at its own costs. 

2. If the value of the securities existing for the Seller and his Entrepreneurial Group exceed the Buyers debts by more than 25 %, then upon the Buyers demand the Seller is obliged to release securities of his choice accordingly. 

3. The Buyer may neither pawn the article of contract nor transfer it to safeholding. In the event of seizure or confiscation or other intervention by a third party the Buyer must notify the Seller per registered letter without delay and must bear the costs of the measures to eliminate the encroachment, in particular in trials of intervention, if the costs cannot be collected by the opposing party. 

4. As long as the retention of title exists, sale, rental or other transfer of the article of purchase requires the prior written approval of the Seller, in the event of noncompliance the resulting Buyers claims against a third party are considered assigned to the Seller. 

5. In the event of conduct by the Buyer in violation of the contract, in particular default of payment or if conciliatory or bankruptcy proceedings are initiated, the Seller is entitled to repossession and, excluding all rights of retention, the Buyer is obliged to surrender the articles of contract. 

The Buyer assumes all costs resulting from repossession. Without prejudice to the Buyers payment obligations the Seller is entitled to earn the best possible profit from the repossessed contract goods with accessories through private sale. Assertion of retention of title as well as seizure of the article of the agreement by the Seller does not constitute withdrawal from the contract as long as the German law on hire purchase does not apply. 

6. During the period of retention of title the Buyer is to provide liability and comprehensive insurance for the article of purchase against fire, theft and burglary provided that the rights of the comprehensive insurance shall be reserved for the Seller. However, the Seller is entitled to obtain insurance at the cost of the Buyer, to advance the premium charges and to bill the Buyer. Charges, insurance fees, etc. are considered part of the purchase price. Insurance benefits are to be used for the reconditioning of the purchased vehicle to the fullest extent. In the event of a total loss the insurance benefits are to be used for the balance of payment, Buyer is entitled to any excess amount. 

7. During the period of retention of title the Buyer has the obligation to store the item of purchase in proper condition and to have necessary repairs completed without delay in a workshop accepted by Seller. 

8. If the article of purchase has been attached to another item belonging to the Buyer which thus forms a new unit, then the Seller obtains co-ownership of that new unit in proportion of the value of the article of purchase to the invoice value of the new unit. If the Buyer gains sole ownership of the new item through legal regulations, then the Buyer and Seller are in agreement that the Buyer will transfer co-ownership to the Seller in the proportion of the value of the attached article of sale to the invoice value of the new item. 

VII. Warranty 

1. Sellers warranty regarding the products sold shall be in accordance with the applicable law. The warranty period for new products shall, however, be one (1) year, any warranty for used products is excluded, see clause IX. The warranty period shall commence upon the time of passage of the risk, see clause V. of these General Terms of Sale. Warranty claims are excluded in the event that the running time of a product within the warranty period exceeds 1.000 hours or 10.000 kilometers of operational use. 

2. In the event of a defect, Seller shall have the right either to repair or to replace the article of purchase. 

3. Buyer shall examine all goods delivered without undue delay. Buyer shall give written notice within 10 days of receipt of the goods of any defects which are either obvious or detectable by adequate examination. Defects which are not obvious or detectable by adequate examination are subject to a notification period of 10 days after the defect being detected. The foregoing notice periods shall be deemed observed if the written notice is sent out within said notice periods. Failure to observe said time limits shall result in exclusion of any warranty claims with regard to the respective defect. 

Buyer shall ensure that Seller has the necessary time and access so that Seller, upon consultation with Buyer, may carry out all repairs and/or replacements deemed necessary within the reasonable discretion of Seller. Only in urgent cases in which the safety of operation is affected or in which there is a danger of excessive damage, Buyer has the right to carry out the repair himself or by a third party and to demand from Seller reimbursement of reasonable expenses; the Buyer shall remain under the obligation to notify Seller immediately. The foregoing shall apply accordingly in the event that Seller is in default regarding repair/replacement. 

4. A deviation from specifications or agreements regarding consumption and performance shall not constitute a defect of the article purchased unless the deviation exceeds 10 % in the positive or the negative. 

5. Seller is not liable for damages resulting from usual wear and tear. Seller is also not liable for damage resulting from improper handling, for example improper use, neglect of operation and maintenance instructions, faulty assembly or setting into operation or faulty repair, excessive use, use of unsuitable material of operation or unsuitable work supplies and material. 

6. If a warranty claim turns out to be justified, Seller shall bear the costs directly related to repair or replacement, consisting of the costs of a replacement item including shipping costs as well as reasonable costs for removal and assembly and, to the extent this can be reasonably expected in the individual case, costs of assembly workers and other workers provided by Seller. All other costs shall be borne by Buyer. Reimbursement for repair costs is subject to the repair being carried out by Seller or by a workshop accepted by Seller. 

7. Liability of Seller regarding essential third party products is limited to assignment of the warranty claim Seller has against the supplier of the third party product; the foregoing shall not apply to cases of lack of agreed specifications. Claims against Seller regarding such essential third party products can only be made after legal proceedings against the third party have been unsuccessful. 

VIII. Liability 

1. Liability of Seller for any damages and based upon any legal right shall be subject to the following: 

a) Full liability in cases of intent or gross negligence of Seller or its employees; 

b) Liability limited to typical damages which are reasonably foreseeable in cases of gross negligence of Sellers agents, unless Sellers liability is excluded by trade customs; 

c) Liability limited to typical and reasonably foreseeable damages in cases of violation of essential contractual obligations; 

d) Full liability in cases of any injury to life or bodily integrity of Buyer for which Seller is responsible. 

In the event that the damage is covered by an insurance of Buyer (with the exception of insurance of fixed sums) Seller is only responsible for any remaining damage to Buyer such as higher insurance premiums or interest incurred until the time the insurer settles the claim. 

2. The liability of Seller under German product liability law remains unaffected. 

3. Legal representatives, agents and other employees of Seller are not liable for damages caused by Sellers slight negligence. 

IX. Sale of used Cranes 

1. The sale of used cranes is governed by these General Terms of Sale, however, subject to the following subsections 2 and 3. 

2. Used sales are delivered "as is" or, if expressly agreed upon, after a complete overhaul. 

3. Sale of used cranes is carried out on an "as is" basis and in the condition as inspected by Buyer; any liability or warranty of Seller is excluded. 

X. Liability for Patent Infringements 

With respect to articles of purchase produced in his plants the Seller is liable only for patent infringements for patents issued in the Federal Republic of Germany and as provided herein; the Seller supports the Buyer in the extra-judicial and judicial dispute with the patentholder; the Seller refunds the Buyer patent litigation costs and the Seller indemnifies the Buyer from the compensation claims raised by the patentholder. With respect to those parts of the article of purchase not produced by the Seller in his plants, the liability applies only to the assignment of claims Seller has against his sub-contractors. If the Seller supplies according to drawing, models or other data provided by the Buyer, he is not liable for infringements of patents issued in the Federal Republic of Germany. 

XI. The Sellers Right to Withdrawal 

In the event that unforeseeable events within the meaning of Section IV. occur, if these considerably alter the economic significance or the economic content of the performance agreed or affect the Sellers operations and in the case where impossibilities in the execution arise after conclusion of the contract, the agreement shall be altered accordingly. If this is economically unfeasible the Seller has the right to withdraw from the contract either completely or in part. The Buyer shall have no damage claims resulting from such withdrawal. 

XII. Replacement Parts 

The Seller supplies, in exchange for used parts, replacement parts at the replacement price agreed upon. Slight deviations in the construction of the replacement parts are permitted. The used parts are to be sent to the Seller complete, freight paid and free of cost. They must not show any defects, especially any welded or unwelded ruptures, so that they can be worked up. If a replacement part is supplied before the Buyer has returned the used part, the Seller invoices, instead of the price for the replacement part, the price valid for the new part. After receipt of the used part, the Seller credits to the Buyer the difference between the price for the new part and the price for the replacement part. 

The used parts become the property of the Seller at the time of receipt. By supplying the used part, the Buyer confirms to the Seller that this part is his property, or that he is authorized to transfer this property, and that third parties have no right to the used part. 

XIII. Place of Performance, Place of Jurisdiction and Applicable Law 

1. The place of fulfillment of all contractual obligations is the Sellers plant. 

2. For all present and future claims arising from the business relations, in particular with the Sellers Entrepreneurial Group (P.I.1.), including bill and check claims the exclusive place of jurisdiction shall be Nürnberg or the place of the supplying factory respectively the supplying branch office. However, the Seller shall also be entitled to sue the Buyer before the court having jurisdiction over the Buyers place of business. 

3. The German laws are solely applicable and the UN convention of 11th April 1980 on contracts for the international sale of goods is hereby excluded. 

XIV. Transfer of Rights and Obligations of the Buyer 

Transfer of rights and obligations arising from the agreement require the prior written approval of the Seller in order to be valid. 

XV. Invalidity of a Term 

In the event that one or more of the provisions of these terms are invalid or become invalid, then the validity of the remaining provisions shall not be affected. 

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General Terms of TADANO FAUN GmbH, effective June 2002