Purchase Conditions

General Terms and Conditions of Purchase of Atlantic Zeiser GmbH Effective date 1 January 2002

1. Miscellaneous – Scope

Our general terms and conditions of purchase apply exclusively; we do not recognize terms and conditions of suppliers that conflict with or deviate from our terms and conditions of purchase, unless we have expressly agreed to their applicability in writing. Our general terms and conditions of purchase apply even if we accept the supplier’s delivery without reservation or pay for such delivery in the knowledge of the supplier’s conflicting or deviating terms and conditions.

All agreements made between us and the supplier in relation to the performance of this contract shall be made in writing.

2. Offer – Offer Documents

The supplier shall accept our order within a period of two weeks. Until declaration of acceptance by the supplier has been received we have the right to withdraw orders at any time.

We retain property rights and copyrights in relation to illustrations, drawings, calculations and any other documents. These must be used exclusively for assembly on the basis of our order; after the order has been processed they shall be returned to us unprompted. They may not be made accessible to and shall not be disclosed to any third party. Any disclosure or passing on to third parties by the supplier requires our prior express written consent.

Cost quotations provided by the supplier are binding and shall not be reimbursed by us.

3. Prices, Delivery and Payment Conditions

The price specified in the order is binding. Unless otherwise agreed in writing, the price includes delivery “free domicile”, including packaging, freight, duties, any insurance, etc. The return of the packaging requires a separate agreement.

Unless otherwise agreed, statutory value added tax is included in the price.

We can only process invoices if they contain the order number stated on the order as well as the account assignments and delivery note number in accordance with the provisions stated in our order. The supplier is responsible for all consequences arising from the failure to comply with this obligation.

Unless otherwise agreed in writing, we pay the purchase price within 20 days of delivery and receipt of invoice with a 3% cash discount or within 60 days net.

The payment period begins once the delivery of the goods or services has been fully completed and the invoice, issued in the proper form, has been received. Discounts for cash payments shall be allowed even if we set off an amount or withhold payment of a reasonable amount due to defects; in this case the payment period begins after the defect has been fully remedied.

We are entitled to set-off and retention rights to the extent stipulated by law.

Excess or short deliveries to any extent shall only be permitted if this has been explicitly agreed upon at the time the order quantity was determined.

4. Delivery time

The delivery time stated in the order is binding.

The supplier shall notify us in writing without delay if circumstances occur or become evident, which indicate that the agreed delivery time cannot be met.

If the agreed delivery deadlines are not met, we are entitled, notwithstanding further statutory rights, to withdraw from the order and/or claim damages and/or obtain a substitute from a third party.

The acceptance of a delayed delivery or service does not constitute a waiver of damages claims.

In case of delay in delivery we shall be entitled to demand a lump-sum settlement for damage caused by delay in the amount of 1% of the delivery value per completed week, however not more than 10%; we reserve the right to make further statutory claims. The supplier shall have the right to prove to us that no or much less damage has arisen as a result of the delay.

If we commit a default in acceptance or cause a debtor’s delay, the supplier’s indemnity is limited to 0.5% of the delivery value per completed week, unless the delay was intentional or due to gross negligence.

5. Passing of Risk – Documents

Unless otherwise agreed in writing, delivery shall be “free domicile”.

On all shipping documents and delivery notes the supplier shall specify precisely our order and job number; should he fail to do so, delays in processing are inevitable and we shall not be held responsible for these delays.

6. Inspection for defects – Warranties

Our guidelines on measurements, quality, designs, materials, processing instructions etc. shall be strictly observed by the supplier; if required, compliance with these requirements must be documented by the supplier.

Upon receipt of the goods we will inspect the goods for obvious defects, identity, shortages and transport damage. A more detailed examination shall not be required. A complaint shall be deemed to have been made in due time if it is received by the supplier within a period of 14 working days after delivery. The supplier shall waive the defence of late inspection and notification of defects.

We are entitled to full statutory warranty claims; notwithstanding this, we are entitled, at our choice, to require the supplier to either remedy the defect or deliver goods free from any defects. In this case the supplier shall bear all costs associated with remedying the defect, particularly the costs of transport, infrastructure, work and materials. The right to claim full damages is expressly reserved.

Actions to remedy any defects can be taken by us without notice at the supplier’s expense, if we have a special interest in immediate rectification in order to avoid a default, or for any other urgent reason.

If a defect becomes evident within six months of delivery, the defect shall be deemed to have existed at the passing of risk, except where this assumption is incompatible with the nature of the defect.

If we take back any products manufactured and/or sold by us due to defects of any contractual item supplied by the supplier, or if any claims are made against us for this reason, we shall have full statutory rights of recourse in accordance with sections 478, 479 of the German Civil Code (BGB).

The warranty period shall be three years from delivery; in the case of building materials within the meaning of section 438 (1) No.2 b) of the German Civil Code (BGB) it shall be five years from delivery.

7. Liability for defective products

Insofar as the supplier is responsible for a product defect, he shall, upon first request, indemnify us against claims by third parties, to the extent that the cause lies within his sphere of control and organization and he is personally liable in relation to third parties.

In such cases the supplier shall bear all costs and expenses, including costs of any litigation or product recall.

The supplier undertakes to maintain product liability insurance with adequate coverage for personal injury or damage to property. Our damages claims shall however not be limited to the amount of such coverage.

8. Third party rights

The supplier warrants that no third party rights are violated in connection with his delivery.

If a third party makes any claims against us in this respect, the supplier shall, on first written request, indemnify us against such claims; we shall not be entitled to enter into any agreements with the third party, in particular to conclude a settlement, without the consent of the supplier.

The obligation to indemnify us applies to all expenses necessarily incurred by us, arising out of or in connection with the claim by a third party.

9. Provision – Tools – Retention of title

If material is provided to the supplier for the performance of his obligation, he shall inspect and notify of any defects before processing or reworking the material. Any defects must be reported to the orderer without delay.

If we provide parts to the supplier, we retain title to such parts. Any processing or reworking by the supplier shall be undertaken for us. If goods that are subject to retention of title by us are processed together with objects that do not belong to us, we shall acquire joint ownership of the new item at a ratio of the value of our goods in relation to the other processed items at the time of processing.

If the goods provided by us are inseparably intermixed with objects that do not belong to us, we shall acquire joint ownership of the new item at a ratio of the value of goods subject to retention of title by us in relation to the other intermixed items at the time of intermixing. If the intermixing is such that the supplier’s item is regarded as the main item, it shall be deemed to have been agreed that the supplier shall transfer proportionate co-ownership to us; the supplier holds the sole or joint ownership on our behalf.

We retain title to tools; the supplier shall use the tools exclusively for the production of the goods ordered by us. The supplier shall insure the tools belonging to us, at his own expense, for their replacement value, against fire, water damage and theft. He is obliged to carry out any necessary maintenance and inspection work at his own expense in a timely manner. He shall report any faults to us immediately; if he culpably fails to do this, this shall not affect any claims for damages.

Products which are custom-made in accordance with our designs, such as drawings, models or similar, or using our confidential information or our tools, may neither be used by the supplier himself nor offered or supplied to third parties.

10. Legal Venue – Place of Performance

If the supplier is a business owner, the legal venue shall be the court responsible for Stuttgart, Germany. However, we are also entitled to sue the supplier at his place of residence.

Unless otherwise agreed in writing, the place of performance shall be Stuttgart, Germany.

This contract shall be subject exclusively to the laws of the Federal Republic of Germany, excluding conflict of laws provisions and the UN Convention on Contracts for the International Sale of Goods (CISG).

Update on 01.01.2002

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