Foreign Trade Conditions
For the Supply and Erection of
Plant and Machinery for Import and Export No. 188A(1*)
Prepared under the auspices of the
United Nations economic commission for Europe
Geneva, March 1957
These general conditions shall apply, save as varied by both parties.
2. Formation of contract
- The Contract shall be deemed to have been entered into when, upon receipt of an order, the Contractor has sent an acceptance in writing within the time-limit (if any) fixed by the Purchaser.
- If the Contractor, 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 xpiration of such time-limit, provided that there shall be no binding Contract unless the acceptance reaches the Contractor not later than one
week after the expiration of such time-limit.
3. Drawings and descriptive documents
- 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.
- Any drawings or technical documents intended for use in the construction or erection of the Works) or of part thereof and submitted to the Purchaser prior or subsequent to the formation of the Contract remain the exclusive property of the Contractor. They may not, without the Contractor's consent, be utilized by the Purchaser or copied, reproduced, transmitted or communicated to a third party. Provided, however, that the said plans and documents shall be the property of the Purchaser:
- if it is expressly so agreed, or
- if they are referable to a separate preliminary development contract on which no actual construction was to be performed and in which the property of the Contractor in the said plans and documents was not reserved.
Any drawings or technical documents intended for use in the construction or erection of the Works2 or of part thereof and submitted to the Contractor by the Purchaser prior or subsequent to the formation of the Contract remain the exclusive property of the Purchaser. They may not, without his consent, be utilized by the Contractor or copied, reproduced, transmitted or communicated to a third party.
Unless otherwise specified:
- prices shown in price lists and catalogues shall be deemed to apply to unpacked Plant;
- prices quoted in tenders and in the Contract shall include the cost of packing or protection required under normal transport conditions to prevent damage to or deterioration of the Plant before it reaches its destination as stated in the Contract.
5. Local laws and regulations
- The Purchaser shall, at the request of the Contractor and to the best of his ability, assist the Contractor to obtain the necessary information concerning the local laws and regulations applicable to the Works and to taxes and dues connected therewith.
- If, by reason of any change in such laws and regulations occurring after the date of the tender, the cost of erection is increased or reduced, the amount of such increase or reduction shall be added to or deducted front the price, as the case may be.
6. Working conditions
- The price shall be on the understanding that the following conditions are fulfilled, except so far as the Purchaser has informed the Contractor to the contrary:
- the Works shall not be carried out in unhealthy or dangerous surroundings;
- the Contractor's employees shall be able to obtain suitable and convenient board and lodging in the neighbourhood of the site and shall have access to adequate medical services;
- such equipment, consumable stores, water and power as are specified in the Contract shall be available to the Contractor on the site in good time, and, unless otherwise agreed, free of charge to the Contractor;
- the Purchaser shall provide the Contractor (free of charge, unless otherwise agreed) with closed or guarded premises on or near the site as a protection against theft and deterioration of the Plant to be erected, of the tools and equipment required therefor, and of the clothing of the Contractor's employees;
- the Contractor shall not be required to undertake any works of construction or demolition or to take any other unusual measures to enable the Plant to be brought from the point where it has been unloaded to the point on the site where it is to be erected, unless the Contractor has agreed to deliver the Plant to the last mentioned point.
- If the circumstances resulting front such departure are such that it would be unreasonable to require the Contractor to proceed with the Works, the Contractor may, without prejudice to his rights under the Contract, refuse to do so.
7. Erection on a time basis and lump sum erection
- When erection is carried out on a time basis the following items shall be separately charged:
- all travelling expenses incurred by the Contractor in respect of his employees and the transport of their equipment and personal effects (within reasonable limits) in accordance with the specified method and class of travel where these are specified in the Contract;
- the living expenses, including any appropriate allowances, of the Contractor's employees for each day's absence from their homes, including non-working days and holidays;
- the time worked, which shall be calculated by reference to the number of hours certified as worked in the time-sheets signed by the Purchaser. Overtime and work on Sundays, holidays and at night will be charged at the special rates mentioned in the Contract. Save as otherwise provided, the hourly rates cover the wear and tear and depreciation of the Contractor's tools and light equipment;
- time necessarily spent on:
- preparation and formalities incidental to the outward and homeward journeys;
- the outward and homeward journeys;
- daily travel morning and evening between lodgings and the site if it exceeds half cm hour and there are no suitable lodgings closer to the
- waiting when work is prevented by circumstances for which the Contractor is not responsible under the Contract;
- any expenses incurred by the Contractor in accordance with the Contract, in connexion with the provision of equipment by him, including where appropriate a charge for the use of the Contractor's own heavy equipment;
- any taxes or dues levied on the invoice and paid by the Contractor in the country where erection takes place.
- When erection is carried out for a lump sum, the quoted price includes all the items above mentioned. Provided that if the erection is prolonged for any cause for which the Purchaser or any of his contractors other than the Contractor is responsible and if as a result the work of the Contractor's employees is suspended or added to, a charge will be made for any idle time, any extra work, any extra living expenses of the Contractor's employees and the cost of any extra journey.
8. Inspection and tests of the plant
Intentionally amended by appendix B of this contract
9. Passing of risk
- Save as provided in paragraph 10.1, the time at which the risk shall pass shall be fixed in accordance with the international Rules for the Interpretation of Trade Terms (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."
- In the case of a sale "ex works", the Contractor 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 Contractor must be given in sufficient time to allow the Purchaser to take such measures as are normally necessary for the purpose of taking delivery
10. Delayed acceptance of delivery
- If the Purchaser fails to accept delivery of the Plant on due date. he shall nevertheless make any payment conditional on delivery as if the Plant had been delivered. The Contractor shall arrange for the storage of the Plant at the risk and cost of the Purchaser. If required by the Purchaser, the Contractor shall insure the Plant at the cost of the Purchaser. Provided that if the delay in accepting delivery is due to one of the circumstances mentioned in Clause 25 and the Contractor 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.
- Unless the failure of the Purchaser is due to any of the circumstances mentioned in Clause 25. the Contractor may require the Purchaser by notice in writing to accept delivery within a reasonable time.
If the Purchaser fails for any reason whatever to do so within such time, the Contractor 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 the failure of the Purchaser aforesaid not delivered and thereupon to recover from the purchaser any loss suffered by reason of such failure up to an amount not exceeding the sum named in paragraph A 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.
- Payment shall be made in the manner and at the time or times agreed by the parties.
- 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.
- If delivery has been made before payment of the whole sum payable under 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 Contractor until such payment has been effected. If such law does not permit the Contractor to retain the property in the Plant, the Contractor 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 Contractor every assistance in taking any measures required to protect the Contractor's right of property or such other rights as aforesaid.
- A payment conditional on the fulfilment of an obligation by the Contractor shall not be due until such obligation has been fulfilled, unless the failure of the Contractor is due to an act or omission of the Purchaser.
- If the Purchaser delays in making any payment, the Contractor may postpone the fulfilment of his own obligations until such payment is made, unless the failure of the Purchaser is due to an act or omission of the Contractor.
- If delay by the Purchaser in making any payment is due to one of the circumstances mentioned in Clause 25, the Contractor shall not be entitled to any interest on the sum due
- Save as aforesaid, if the Purchaser delays in making any payment, the Contractor shall, on giving to the Purchaser within a reasonable time notice in writing, be entitled to the payment of interest on the sum due at the rate fixed in the “Terms and Conditions of this Contract”, from the date on which such sum became due. If at the end of the period fixed in the “Terms and Conditions of this Contract”, the Purchaser shall still have failed to pay the sum due, the Contractor shall be entitled by notice in writing to the Purchaser, and without requiring the consent of 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 A of the Appendix.
12. Preparatory work
- The Contractor shall in good time provide drawings showing the manner in which the Plant is to be affixed together with all information relating, unless otherwise agreed, only to the Works, required for preparing suitable foundations, for providing suitable access for the Plant and any necessary equipment to the point on the site where the Plant is to be erected and for making all necessary connexions to the Plant (whether such connexions arc to be made by the Contractor under the Contract or not).
- The preparatory work shall be executed by the Purchaser in accordance with the drawings and information provided by the Contractor and mentioned in paragraph 1 hereof. It shall be completed in good time and the foundations shall be capable of taking the Plant at the proper time. Where the Purchaser is responsible for transporting the Plant, it shall be on the site in good time.
- Any expenses resulting from an error or omission in the drawings or information mentioned in paragraph 1 hereof which appears before taking over shall be borne by the Contractor. Any such error or omission which appears after taking over shall be deemed faulty design for purposes of Clause 23.
13. Liaison agents
- The Contractor and Purchaser shall each designate in writing a competent representative to be his channel of communication with the other party on the day-today execution of the Works on the site.
- Each such representative shall be present on or near the site during working hours.
14. Additional labour
15. Safety regulations
- The Purchaser shall notify the Contractor in full of the safety regulations which the Purchaser imposes on his own employees and the Contractor shall secure the observance by his employees of such safety regulations.
- If breaches of these regulations come to the notice of the Purchaser, he must inform the Contractor in writing forthwith, and may forbid persons guilty of such breaches entry to the site.
- The Contractor shall inform the Purchaser in full of any special dangers which the execution of the Works may entail.
Intentionally by appendix G
17. Work outside the contract
18. Contractor's right of inspection
Until the Works are taken over and during any work resulting from the operation of the guarantee the Contractor shall have the
right at any time during the hours of work on the site to inspect the Works at his own expense. In proceeding to the site, the inspectors shall observe the regulations as to movement in force at the Purchaser's premises.
19. Instruction of the purchaser's employees
In appropriate cases the Contract may provide on the terms and conditions therein set out for instruction to be given by the Contractor to the Purchaser's employees who will run the Plant.
20. Time for completion
21. Taking-over tests
Intentionally amended by appendix B
Intentionally amended to appendices B, C and D
- Subject as herein after set out, the Contractor undertakes to remedy any defect resulting from faulty design, materials or workmanship.
- This liability is limited to defects which appear during the period (called "the Guarantee Period") specified in paragraph H of the Appendix and commencing on taking over.
- In respect of such parts (whether of the Contractor's own manufacture or not) of the Works 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.
- The daily use of the works and the amount by which the Guarantee Period shall be reduced if the Works are used more intensively are stated in paragraph J of the Appendix.
- A fresh Guarantee Period equal to that stated in paragraph H of the Appendix shall apply, under the same terms and conditions as those applicable to the original Works, to parts supplied in replacement of the defective parts or to parts renewed in pursuance of this Clause. This provision shall not apply to the remaining parts of the Works, the Guarantee Period of which shall be extended only by a period equal to the period during which the Works are out of action as a result of a defect covered by this Clause.
- In order to be able to avail himself of his rights under this Clause the Purchaser shall notify the Contractor in writing, without delay of any defects that have appeared and shall give him every opportunity of inspecting and remedying them.
- On receipt of such notification the Contractor shall remedy the defect forthwith and, save us mentioned in paragraph 8 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 Contractor any part in which a defect covered by this clause has appeared, for repair or replacement by the Contractor, 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 Contractor of his obligations under this paragraph in respect of such defective part.
- 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 such defective parts between the place where the Works are situated and one of the following points:
- the Contractor's works if the Contract is "ex works" or P.O. R.;
- the port front which the Contractor dispatched the Plant if the Contract is F. 0.13., F. A. S., C. r. F., or C. & F.;
- in all other cases the frontier of the country from which the Contractor dispatched the Plant.
- Where, in pursuance of paragraph 7 hereof, repairs are required to be effected on site, the incidence of any travelling or living expenses of the Contractor's employees and the costs and risks of transporting any necessary material or equipment shall be settled, in default of agreement between the parties, in such manner as the arbitrator shall determine to be fair and reasonable.
- Defective parts replaced in accordance with this Clause shall be placed at the disposal of the Contractor.
- If the Contractor 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 Contractor's risk and expense, provided that he does so in a reasonable manner.
- The Contractor's liability does not apply to defects arising out of materials provided, or out of a design stipulated, by the Purchaser.
- The Contractor'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 taking over. In particular it does not cover defects arising front the Purchaser's faulty maintenance or from alterations carried out without the Contractor's consent in writing, or front repairs carried out improperly by the Purchaser, nor does it cover normal deterioration.
- After taking over and save as in this Clause expressed, the Contractor shall be under no liability even in respect of defects due to causes existing before taking over. It is expressly agreed that the Purchaser shall have no claim in respect of personal injury or of damage to property not the subject matter of the Contract arising after taking over nor for loss of profit unless it is shown from the circumstances of the case that the Contractor has been guilty of gross misconduct.
- "Gross misconduct" does not comprise any and every lack of proper care or skill, but means an act or omission on the part of the Contractor implying either a failure to pay due regard to serious consequences which a conscientious Contractor would normally foresee as likely to ensue, or a deliberate disregard of any consequences of such act or omission.
24. Liability for personal injury and damage to property
In the event of personal injury or damage to property occurring before all the Works have been taken over, the liabilities shall be apportioned as follows:
- The Contractor shall at his own expense make good any loss or damage to the Plant or Works occurring before the risk therein has passed and arising from any cause whatsoever other than an act or omission of the Purchaser;
- the Contractor shall at his own expense make good any loss or damage
to the Plant or Works occurring after the risk therein has passed, if such loss or damage is caused by an act or omission of the Contractor;
25. Rights at termination
26. Arbitration and law applicable
- Any dispute arising out of the Contract shall be finally settled, 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.
- Unless otherwise agreed, the Contract shall, so far as is permissible under the law of the country where the Works are carried out, be governed by the law of the Contractor's country.
- If the parties expressly so agree, but not otherwise, the arbitrators shall, in giving their ruling, act as amiables compositeurs.
1 These Conditions may he used, at the option of the parties, as an alternative to the General Conditions for the Supply and Erection of Plant and Machinery for Import and Export prepared at Geneva, in March 1957 (No. 574 A).
The English, French and Russian texts are equally authentic.
The observations of the experts who drew up these General Conditions, together with a description of the
procedure followed, are embodied in the "COMMENTARY ON THE GENERAL CONDITIONS FOR TILE
SUPPLY OF PLANT AND MACHINERY FOR EXPORT No. 188" (Document E/ECE/169), published by the
Economic Commission for Europe. It can be obtained direct from the Sales Section of the European Office of the United Nations, Geneva, Switzerland, or through United Nations Sales Agents.
2 In these General Conditions "Plant'' ' means all machinery, apparatus, materials and articles to be supplied by the Contractor under the Contract and "the Works" means all Plant to be supplied and work to be done by the Contractor under the Contract.
*) April 2002
Attached to the ECE General Conditions for the Supply and Erection of Plant and Machinery for Import and Export by German Capital Goods Industry *)
The provisions hereinafter enumerated contain the data provided for in the "Appendix" of the General Conditions for Supply and Erection as well as other supplementary stipulations between the Parties to the Contract.
In the case of diverging interpretations of the German and the English texts, the German text shall prevail.
1. Ad Art. 1
All stipulations of the Parties to the Contract must be made in writing in order to be valid.
2. Ad Art. 3
The data referred to in art. 3 para l shall not be binding except where it is expressly so stipulated in the Contract.
3. Ad Art. 9
If the Contractor, in the case of a sale FCA and upon request by the Purchaser, undertakes to send the Plant to its destination, the risk shall pass to the Purchaser upon delivery to the first carrier, provided that this date is prior to the date indicated in art. 9 para 2.
If the Purchaser, in the case of a sale "ex works", fails to take delivery of the Plant on the ground of one of the circumstances referred to in art. 25, the risk shall pass to the Purchaser not later than at the date this circumstance appears.
4. Ad Art. 10
The maximum amount of damages provided for under art. 10 para 2, Appendix para A, shall be 25% of the price payable under the Contract, which is properly attributable to the particular portion of the Plant. The Purchaser shall be entitled to prove that fewer damage has occurred to the Contractor.
5. Ad Art. 11
The Contractor shall be entitled to refuse performance if, due to a circumstance that originated after the formation of the Contract, he has reason to fear that he may not receive the performance of the Purchaser completely and in time (art. 11 para 5).
The rate of interest (art. 11 para 7, Appendix para B) shall be 8 percentage points above the rate of the main refinancing facility of the European Central Bank in force on the due date of payment.
The additional period shall be fixed at one month (art. 11 para 7, Appendix para C); the maximum amount of damages (art. 11 para 7, Appendix para A) shall be 25% of the price payable under the Contract, which is properly attributable to the particular portion of the Plant. The Purchaser shall be entitled to prove that fewer damage has occurred to the Contractor.
6. Ad Art. 20
It shall be a further prerequisite of the beginning of the period of completion (art. 20 para 1) that agreement must be reached with respect to all technical questions which at the time the Contract was entered into the Parties had decided to settle by subsequent negotiations, and that any official authorization which may be required for the fulfilment of the obligations of the Contractor must have been issued.
The price reduction (art. 20 para 3, Appendix paras D and E) shall amount to 0.5% for each complete week but shall not exceed a total of 5%.
In the case of art. 20 para 5 (Appendix para F) the Parties should come to an amicable agreement.
The amount of damages shall correspond with the circumstances of the particular case; it shall keep within the limits of 5 and 25% of the price payable under the Contract, which is properly attributable to the portion of the Works which for delay of completion could not be properly used; any further damage will only be compensated in the case of intent, gross negligence or negligent breach of a condition that goes to the root of the Contract (“Wesentliche Vertragspflicht”) according to Clause 13 of this Annex.
7. Ad Art. 21
8. Ad Art. 22
9. Ad Art. 23
The Purchaser shall inform the Contractor what protective devices he requires against dangers originating from the use of the Plant or the Works. They shall be delivered at the Purchaser's own expense if both Parties have agreed on the kind and the scope of the protective devices to be delivered. Failure to deliver other protective devices shall not be deemed to be a defect (art. 23 para 1).
The Guarantee Period (art. 23 para 2, Appendix para H) shall be 12 months, provided that no other Guarantee Period has been expressly agreed upon in the Contract.
The daily use of the Works (art. 23 para 4, Appendix para J) shall be fixed at 8 hours; if the Works are used more intensively the Guarantee Period shall be reduced accordingly.
The fresh Guarantee Period (att. 23 para 5, Appendix para H) is fixed at 0 months.
Neither shall the Contractor be liable with respect to manufactured goods supplied by the Purchaser (art. 23 para 12).
Unless otherwise agreed, all claims of the Purchaser based on defects shall expire 12 months after assertion of the defectiveness, except where they have been recognized by the Contractor or where the Purchaser has brought an action or instituted arbitration proceedings prior to the expiry of the time-limit (art. 23 para 13).
For all other cases, Clause 13 of this Annex shall apply accordingly (art. 23, No. 14).
10. Ad Art. 24
The maximum damages for damage to property shall not exceed 25% of the total price of delivery payable under the Contract (art. 24 para 3, Appendix para I). Damages for property shall in total not exceed the amount of Euro 100,000. For all other cases, Clause 13 of this Annex shall apply accordingly.
11. Concerning Art. 26
Delete art. 26 para 1.
12. Ad Art. 28
The Contract shall be governed by law of the Netherlands.
13. Exclusion of other claims lodged by the Purchaser
All further claims lodged by the Purchaser, above all claims to make good any loss or damage from whatever cause arising, including damage not occurring to the Plant or Works themselves, shall be excluded, whatever legal ground may be underlying such claims.
The said exclusion of liability shall not apply in case of intent or gross negligence on the part of owner or his executives, in the case of negligence causing damage to life, body or health, nor in cases of negligent breach of a condition which goes to the root of the Contract ("Wesentliche Vertragspflichten").
In cases of negligent breach of a condition which goes to the root of the Contract ("Wesentliche Vertragspflichten") the Contractor shall be liable only - except in cases of intent or gross negligence on the part of the owner or his executives - for reasonably foreseeable damage which is intrinsic to the Contract.
Nor does the said exclusion apply in cases of strict liability, under the Product Liability Act (Produkthaftungsgesetz), for defects of the Product causing death or personal injury, or damage to items of property that are used privately. Furthermore, the said exclusion of liability shall not apply in the case of damage due to fraudulent concealment or despite specific guarantees.
*) April 2002