General Terms and Conditions of Purchase of
ZAE Ergom Sp. z o.o.    
  

Update: 2017-02-17

1. General Rules

These General Terms and Conditions of Purchase, further referred to as the GTCP shall apply until Zakład Aparatury Elektrycznej ERGOM Sp. z o.o., further referred to as the Buyer, and the Seller agree otherwise in writing. The General Terms and Conditions of Purchase apply to all deliveries resulting from mutual business connections between the Buyer and the Seller. Should the Seller's General Terms and Conditions of Business be inconsistent in whole or in part with these GTCP, the Buyer's GTCP shall apply.

2. Order Confirmation

Orders are valid, if confirmed in writing within two business days of the order date or completed within that period by means of delivery. Confirmation of a purchase order by the Seller is considered to be tantamount to acceptance of the Buyer's GTCP.

The Seller's acceptance of an order with deviations must be agreed in writing with the Buyer.

 3. Goods Inspection Prior to the Shipment

If the Parties have agreed that the Buyer or agreed external organization will inspect goods prior to shipment, the Seller must notify the Buyer, in agreed time in advance before shipment, that the goods are ready for inspection at an agreed location.

 4. Delivery Date

The Seller considers that delivery dates are of the essence. Delivery dates apply as fixed and unchanging. If the Seller realises that the agreed delivery date cannot be met for any reasons whatsoever, they shall immediately notify the Buyer to this effect and specify the period of delay. Should the new delivery dates as established in these circumstances be not met, the Buyer shall have the right, following the expiry of such deadlines, claim damages for deliveries that have not been completed (see section 8) or purchase goods from a third party or withdraw from the contract. Acceptance of a late delivery is not a waiver of claims.

5. Terms and Conditions and Scope of Delivery

Until agreed otherwise, deliveries shall be EXW or FOB according to INCOTERMS 2010.

Goods must be delivered in line with specifications and detailed lists that accompany orders. Each delivery should be accompanied with a complete set of delivery documents and a waybill. Such documents should specify the order number and order date, Buyer's code of merchandise for each item, quantity and unit, as well as the details allowing for full traceability of goods in line with the legal requirements. In the absence of additional arrangements, goods in the delivery should be appropriately packed in line with the applicable commercial rules. It is obligatory for each packaging unit to contain specifications of its contents.

If the delivered quantity exceeds the quantity in the order, and such excess quantity can be separated, the Buyer shall have the right to send the excess quantity back at the Seller's expense. If the excess quantity cannot be separated, the Buyer shall have the right to send the entire delivery back at the Seller's expense. Partial deliveries are acceptable if previously agreed in details by the Parties. In the case of partial deliveries, the remaining quantity must be delivered within the agreed time limit.

 6. Prices, Invoices, Payments

The agreed prices are fixed and not subject to change once an order has been placed. All changes in prices as included in the Seller's quotations require a written notice to the Buyer submitted at least 30 days before the planned effective date for such changes. If an order does not specify a price, the price should be given in the order confirmation. If the Buyer does not object thereto within five working days, the price shall be considered binding.

Invoices should accompany the delivery or be sent after the shipment of goods, and be received within not later than 5 working days of the shipment date. Each invoice should include the following information:

- number and date of a purchase order

- Buyer's code of merchandise

- quantity supplied and the unit for each item

- unit price and value for each item

- delivery conditions applicable to the delivery in question

- origin of supplied products (country)

-the Buyer's and the Seller's respective IDs

All payments shall be subject to the condition that a warranty is given as regards any damage or deficiencies in quantity that may be found at a later date. In case of a qualitative complaint, the Buyer has the right to partially or fully suspend the payment until a cause for the complaint is removed.

7. Customs Duty and Origin

For free of charge import shipments, the value should be given with an indication: ''for customs purposes only''. In an invoice or in a separate statement, a reason should be stated why the goods in question are free of charge, e.g. they constitute free samples. The Seller is obliged to determine and document the origin of goods. Any changes in the origin must be notified by the Seller to the Buyer in writing. If the Seller delivers goods that must undergo customs procedures in the importing country, they shall be required to provide a certificate of origin. The Seller is liable for any and all damage suffered by the Buyer as a result of the Seller's failure to comply with these conditions. The Seller is obliged to answer and clarify al queries and doubts about the origin of goods as submitted by competent authorities.

 8. Delay in Delivery, Non-Delivery and Legal Remedies

When there is a delay in delivery of any goods, the Buyer shall be entitled to claim lump-sum contractual indemnities of 0.5% or such other percentage as may be agreed by the Parties, on the value of the goods in question for each complete week of delay, provided that the Buyer notifies the Seller of the delay. When the Buyer submits such notice to the Seller within 15 days of the agreed delivery date, the indemnity period shall run from the agreed delivery date or from the last day within the agreed delivery period. When the Buyer submits such notice to the Seller after 15 days of the agreed delivery date, the indemnity period shall run from the notice date. Lump-sum contractual indemnities for delay may not exceed 5% of the delayed goods value or such other maximum amount as the Parties may agree.

If the Parties have agreed on the order cancellation date, the Buyer may withdraw from the order by giving notice to Seller, in respect of the goods that for any reason (including force majeure events) have not been supplied until the cancellation date. If the cancellation date has not been agreed, and the Seller has not delivered goods until the date on which the Buyer acquired the right to the maximum amount of the-lump sum damages, the Buyer may give notice in writing that they withdraw from the contract in relation to those goods, if they have not been delivered to the Buyer within 5 days of the Seller's receipt of such notice.

In the case of withdrawal from the order, the Buyer shall be entitled, in addition to any amounts paid or due, to claim damages for any additional loss of no more than 10% of the undelivered goods value.

 9. Non-Conformity of Goods

The Seller shall notify the Buyer of any defects or quality inconsistencies of goods that were revealed before shipment. The Buyer on the basis of the information has right to withdraw from the order or, when the detected defect is not critical has right to accept the defected supply. In a situation where the Buyer decides to accept the order of the detected the Buyer is entitled to a discount each time agreed upon between the parties.

The Buyer shall inspect goods upon their arrival at the destination as quickly as possible, and notify the Seller in writing of any non-conformities of such goods within 15 days of the date when the Buyer have discovered or should have discovered the lack of conformity. The Buyer shall not be entitled to any compensation for the lack of conformity, if they fail to notify the Seller to this effect within 12 months of the date when the goods arrived at the agreed destination.

Goods are considered to be in conformity with the order despite minor deviations that are normal in a given industry or arise from the practice established between the Parties; however, the Buyer shall be entitled to any and all reductions in the price that are customary in trading or arise from the practice of dealing with such deviations.

If goods are non-conforming (and provided that the Buyer, having sent a non-conformity notice, does not choose to keep the goods, and so the Seller pays all costs associated with the return), the Seller may, in consultation with the Buyer:

- replace the goods with conforming goods, without any additional expense to the Buyer; or

- repair the goods without any additional expense to the Buyer; or

- return to the Buyer the price paid for such non-conforming goods.

The Buyer shall be entitled to lump-sum damages for each complete week of delay between the date of a non-conformity notice and the delivery of substitute goods or repair. Such damages may be in addition to damages for the delay in delivery (if any) but in no case may exceed 5% of the total value of those goods.

If the Seller has not accepted a complaint concerning delivery of non-conforming goods and failed to perform their duties (replacement of such goods with conforming goods, repair, price refund) until the date on which the Buyer becomes entitled to the maximum amount of lump-sum contractual indemnities, the Buyer may give notice in writing that they withdraw from the order in relation to non-conforming goods.

In the case of order cancellation, the Buyer shall be entitled, in addition to any amounts paid or due as a price refund or damages for delay, to claim damages for any additional loss of no more than 10% of the non-conforming goods value.

If the Buyer chooses to keep non-conforming goods, they shall be entitled to an amount equal to the difference between the value of goods at the agreed destination as if they were in line with the order, and their value at same location as actually delivered, whereas such amount may not exceed 15% of the value of such goods.

Unless otherwise agreed in writing, the Buyer may not bring any action for non-conformity before courts or arbitration tribunals after 2 years from the date of goods arrival. It is agreed expressly that after the expiry of the above-mentioned time limit, the Buyer shall not invoke the lack of conformity of the goods, or lay any counterclaim related thereto, in the defense of any claim of the Seller against the Buyer for non-performance of the order.

 10. Technological / material changes

Seller agrees to inform Buyer of any changes in the technological / material or any change affecting the functional properties of the product. Delivery of goods including changes in technology / material without the consent of the Buyer results in the process the complaint in accordance with section 9.

11. Implementation of a contract with a subcontractor

The Seller agrees to inform the Buyer of the transfer of goods to the implementation of the subcontractor. The above mentioned transfer of the goods to the subcontractor requires the written consent of the Buyer. Seller agrees to transfer all the technological and quality requirements to subcontractors as well as confirmation of conformity with the requirements before delivery to the Buyer.

12. Order process control

The buyer is entitled to carry out the inspection / audit of the order process at the headquarters of the Seller or in case of executing the order subcontractor, to control / audit of the order process at the headquarters of the subcontractor. Seller warrants to the Buyer access to all the arrangements and records of the contract. This entitlement applies to Buyer's customers and external inspection bodies.

13. Warranty/Product Damage

The Seller shall provide warranties concerning the use of appropriate materials, good workmanship, and fitness for purpose. If any damage to the supplied goods occurs due to non-existence of such properties, the Buyer may, at their own discretion, withdraw from the contract, reduce the price or demand removal of defects in the goods at the Seller's expense. The Buyer has the right to damages for losses incurred due to defects in the supplied product or poor workmanship. The Seller's warranty and liability shall expire after 24 months of the start-up of the supplied goods. When it comes to latent defects, a complaint shall be considered justified, if lodged immediately after the discovery of a defect while using goods or testing their operation. In emergencies, the Buyer shall have the right, in consultation with the Seller, to undertake repairs on their own or commission them to third parties or order the delivery at the Seller's expense.

For deliveries of goods that require installation and use instructions, the Seller is obliged to deliver such instructions in Polish and in English without an additional order by the time of delivery at the latest. Guidelines and training must not substitute for written installation and use instructions.

 14. Force Majeure

Each Party may withdraw from fulfilment of the contractual provisions, if any delay occurs through no fault of the Party. Such faultless delay is understood as any delay caused by force majeure, such as fire, flood, typhoon, earthquakes, epidemics, war, government-imposed bans or quotas, restrictions, unusual, and violent weather phenomena or any delay caused by similar natural or national reasons. When the order processing is suspended due to force majeure, the Buyer may procure goods from other sources, and reduce the quantities specified in the contract with the Seller by such quantities, if the Seller has not been able to deliver the goods within the extended time limit. In addition, the Seller is obliged to provide full information on the delay on each request of the Buyer.

15. Acceptance of policy regarding conflict minerals 

The Seller accepts the Buyer’s ‘’Policy on conflict minerals’’ and on request will deliver proofs that in the production process of the goods purchased by the Buyer no conflict minerals have been used.

 16. Dispute Resolution

Any disputes arising during the Parties' cooperation shall be finally resolved by a competent court having local jurisdiction over the Buyer's registered office, unless agreed otherwise in writing.

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