Simply. More. Rehm.

General Terms of Supply for Rehm Thermal Systems GmbH

Contents:
 I.     General provisions
 II.    Prices and terms of payment
 III.   Reservation of proprietary rights
 IV.   Delivery times and delays
 V.    Transfer of risk
 VI.   Setup and installation
 VII.  Acceptance
 VIII. Material defects
 IX.   Industrial property rights and copyrights; defects of title
 X.    Impossibility of performance, contract adjustment
 XI.   Miscellaneous claims for damages
 XII.  Legal domicile and applicable law
 XIII. Binding force of the contract
                                                                                                                                                                                    (revision level: May 2006)


I. General provisions
The written declarations of both parties are definitive with regard to the scope of delivery or services (hereinafter referred to as “deliveries”). The customer’s general terms and conditions of business only apply when the supplier or service provider (hereinafter referred to as “supplier”) has agreed to them expressly in writing.

The supplier reserves unrestricted property and copyright utilization rights relating to cost estimates, drawings and other documents (hereinafter referred to as “documents”). The documents may only be made accessible to third parties with the supplier’s advance agreement and, should the contract not be awarded to the supplier, must be returned to the supplier immediately upon demand. The first two sentences of this paragraph apply accordingly to the customer’s documents; however, these may be made available to third parties to whom the supplier has entrusted deliveries in a permissible fashion.

The customer has the non-exclusive right of use of standard software with the agreed performance features in unamended form on the specified equipment. The customer is permitted to make two back-up copies without express agreement.

Partial deliveries are permissible as long as they are not unreasonable for the customer.
 
II. Prices and terms of payment

Prices are quoted ex-works exclusive of packaging plus value added tax applicable at the time.

If the supplier undertakes setup or installation and it is not otherwise agreed, all necessary extra costs in addition to the agreed price/fee, such as travel expenses, costs for transporting tools and personal baggage, as well as daily allowances, are borne by the customer.

Payments are to be made directly to the supplier without deduction.

The customer may only offset claims against payment which are undisputed or are established to be legally binding.
 
III. Reservation of proprietary rights

The items supplied (the reserved property) remain our property until settlement of claims due to us as a result of the supply contract. The reservation of proprietary rights holds good for all claims we subsequently acquire against the customer in connection with the article purchased, for example by reason of repairs and/or supply of parts. The reservation of proprietary rights also applies for claims we have against the customer arising from day to day business relations. Should the value of the securities granted exceed our claims by more than 10%, we are then obliged at the request of the customer to reassign insofar as the securities limit has been exceeded. The decision is at our reasonably exercised discretion.

On request of the customer we are obliged to waiver the reservation of propriety rights if the customer has fulfilled all claims relating to the reserved property and there is further reasonable security in place for remaining claims arising from day to day business.

The customer is entitled to ownership and use of the reserved goods during the period of reserved proprietary rights as long as he fulfils his duties arising from the reservation of proprietary rights in accordance with the provisions following in this paragraph, and is not in arrears of payment. In the event of conduct amounting to breach of contract by the customer, particularly late payment with two purchase price rates or with 10% of the total contract value, we are entitled to withdraw the reserved goods having first given a reasonable period of notice. Withdrawal of the reserved goods by us does not amount to withdrawal from the contract. Following written notification with reasonable notice, we are entitled recover the value of the reserved goods to the best of our ability by means of over the counter trade, whilst deducting the liquidation proceeds from the invoice price. Should we demand surrender of the reserved goods, the customer is obliged to surrender such to us immediately to the exclusion of any rights of retention, unless they stem from the supply contract. In the event that reserved goods are withdraw, we are entitled to have a price estimate prepared by an expert witness who is selected by us, and officially appointed and sworn in. We are entitled to offset the reserved goods at this estimated price. All costs for withdrawal and liquidation of the reserved goods are borne by the customer. We are entitled to calculate liquidation costs as a lump sum amounting 10% of the liquidation proceeds including value added tax. A higher or a lower value may be established, if we can prove higher costs or the customer can prove lower costs. The proceeds will be credited to the customer after deduction of costs and other claims connected with the purchase.

As long as reservation of proprietary rights are in force, disposal, pledging, transfer of ownership by way of security, renting or other transfer of the reserved goods, including modifications to it which infringe upon our security, are only permissible with our advanced written agreement.

If the customer has acquired the reserved goods for the purpose of resale and this is known to us, he is entitled to do this within the framework of a proper business undertaking, as long as he is not in arrears in his relationship to us. Upon concluding the supply contract with us, the customer assigns to us a sum equal to the invoice value of the reserved goods in relation to claims against his customer arising from resale, or other legal grounds, which also applies where resale has not been approved.

The right to resale, as well as the power to collect assigned claims, lapses in the event of payment adjustments, application for or initiation of insolvency proceedings or out of court composition proceedings, as well as in the event of protest of a check or bill. In this case, the customer is obliged to inform us immediately of his own accord regarding the reserved goods and the assignment of claims.

Sums that the customer collects from assigned claims are to be held separately until transfer to us, in order to preclude the settlement and/or offsetting of overdrawn bank accounts.

 
In the event of action involving third parties, particularly in cases of distraint, the customer is to inform us immediately in writing and must draw the attention of the third party immediately to our reservation of proprietary rights. The customer bears all costs incurred for reversing the action and replacing the reserved goods, insofar as they cannot be seized from the third party.

The customer must take out appropriate insurance against basic damage (fire, water, theft etc.) for as long as the reservation of propriety rights remain in force, and this policy must include instructions assigning the rights of the insurance policy to us. The customer must assure that the insurance carrier supplies a cover note before payment of the first premium. If the customer does not comply with this stipulation, despite being reminded in writing, we may take out insurance ourselves at the customer’s expense, disburse the premia and collect them as portions of claims arising from the supply contract. Insurance benefit payments are to be used fully for the restoration of the reserved goods, unless there is agreement to the contrary. Should we decide against repair where there is serious damage, insurance benefits will be used to pay the supply claim, the price of additional services, as well as costs covered by us.

The customer is obliged to maintain the reserved goods in orderly condition for as long as reservation of propriety rights are in force, and to have maintenance as scheduled by ourselves and any necessary repairs carried out without delay either by ourselves or a companies commissioned by ourselves.
 
IV. Delivery times and delays
Adherence to delivery times requires the punctual receipt of all documentation to be supplied by the customer, the necessary approvals and clearances, in particular of plans, as well as adherence to the agreed payment conditions and other customer obligations. Should these requirements not be fulfilled in good time, the delivery times are extended appropriately; this does not apply where the supplier is responsible for the delay.

If non-adherence to deadlines is the result of an act of God, for example mobilization, war, uprising or similar events, i.e. strike or lockout, deadlines are extended appropriately.

In the event of a delay caused by the supplier, the customer may, provided he can substantiate that he has suffered damages as a result, demand compensation for each full week of delay amounting to 0.5%, however not exceeding 5% of the price of the part to be supplied, which could not be placed into operation for its intended purpose as a result of the delay.

Customer compensation claims for late delivery, as well as compensation claims in place of payments which exceed the limits specified in point 3, are excluded in all cases of late delivery and also after expiry, for example, of a delivery deadline which has been set for the supplier. This does not apply in the case of malicious intent, gross negligence or on account of injury to life, person or health. The customer may withdraw from the contract within the framework of legal provisions only as long as the supplier is responsible for the delivery delay. The aforementioned stipulations are not associated with a change in the burden of proof to the disadvantage of the customer.

The customer is obliged at the request of the supplier to state within a reasonable period whether he wishes to withdraw from the contract due to the delay, or continue with delivery.

If dispatch or delivery is delayed at the request of the customer by more than one month after notification of readiness to dispatch, the customer may be charged storage fees for each month or part thereof amounting to 0.5% of the price of the article to be supplied, limited to a total of 5%. The contract parties are at liberty to provide evidence of higher or lower storage costs.
 
V. Transfer of risk
Even in the case of carriage paid deliveries, risk transfers to the customer as follows:

a) for deliveries without setup or installation, when they are shipped or picked up. At the request the customer and at his own expense, deliveries by the supplier can be insured against the usual transport risks.

b) for deliveries with setup or installation, on the day of acceptance in the customer’s place of business or, and if agreed, after a satisfactory trial run.

If dispatch, delivery, commencement, execution, setup or installation, acceptance in the customer’s place of business or the trial run are delayed for reasons caused by the customer, or if the customer is late accepting for other reasons, risk transfers to the customer.
 
VI. Setup and installation

The following provisions apply for setup and installation, insofar as no other written agreements exist:
The customer assumes responsibility, for and shall make the following available in good time at his own expense:

a) all earth moving, construction and other work which is not customary for our industry, including the necessary specialists and workers, construction materials and tools.

b) all articles required for installation and start-up, as well as materials such as scaffolding, hoists and other equipment, and fuel and lubricants.

c) energy and water at the site where it is to be consumed, including hook-ups, heating and lighting.

d) sufficiently sized, suitable, dry and lockable rooms for the storage of machine parts, apparatus, materials and tools etc. at the installation site, as well as appropriate work and rest rooms, including sanitary systems appropriate to the circumstances for the installation workers; moreover, the customer is to take such measures for the protection of the property of the supplier and the installation personnel on site as he would for the protection of his own property.

e) protective clothing and safety equipment necessary for the particular circumstances of the installation site.
Before commencement of installation work, the customer is to provide all necessary details regarding the locations of hidden electrical, gas and water supply lines and other similar systems, as well as required structural data, of his own volition.

Before commencing setup or installation, all required supplies and items must be present at the setup or installation location, and all preparatory work must be advanced to the point that setup or installation can be started as agreed and carried out without interruption. The setup or installation site and its access ways must be leveled and cleared.

Should setup, installation or start-up be delayed as a result of circumstances which are beyond the control of the supplier, the customer is to bear all reasonable costs for waiting time and additional trips required of the supplier and/or his installation personnel.

The customer must verify the number hours worked by installation personnel to the supplier on a weekly basis without delay, as well as when setup, installation and start-up is completed.

Should the supplier request approval after completion of work, the customer shall comply with such request within two weeks. If the customer does not comply on time, approval is deemed to have been granted. Approval is also deemed to have been granted if the delivered goods are put into operation – if applicable after completion of an agreed test phase.
 
VII. Acceptance

Deliveries shall be accepted by the customer, even if they demonstrate minor defects.
 
VIII. Material defects

The supplier is liable for material defects as follows:
All parts and services which demonstrate material defects within the statutory period of limitation – regardless of the duration of use and provided the cause was present at the time of the transfer of risk – are, at the discretion of the supplier, to be reworked, replaced or rendered anew.

Material defects become statute-barred after one year from delivery or acceptance. This does not apply if paragraph 438, section 1, part 2 (Bauwerke und Sachen für Bauwerke), paragraph 479, section 1 (Rückgriffsanspruch) and paragraph 634, section 1, part 2 (Baumängel) of the BGB (German commercial code) stipulate longer periods as in cases of injury to life, person or health.The same applies to as a result of an intentional or grossly negligent breach of duty by the supplier, hi legal distributors or his servants or fraudulent concealment of a defect. The legal regulations concerning suspension of the statute of limitations, interruption and recommencement of periods remain untouched.

The customer is to notify the supplier of material defects without delay and in writing.

In the event of notification of defects, payments may be withheld by the customer to the extent that is reasonably proportionate to the material defect in question. The customer may only withhold payments when a notification of defects has been submitted whose justification cannot be doubted. Should the notification of defects prove unjustified, the supplier is entitled to demand reimbursement by the customer of related incurred costs.

Initially, the supplier shall be offered the opportunity to make good the performance of the contract within a reasonable period.
Should this fail, the customer may withdraw from the contract irrespective of compensation claims in accordance with article XI, or reduce payment.

No claims shall be accepted for defects in the case of only minor deviations from the agreed upon quality, insignificant impairment of usability, natural wear and tear or damage which occurs after the transfer of risk due to improper or negligent handling, excessive stressing, unsuitable operating equipment, defective construction work, an unsuitable building site or special external influences which are not provided for by the contract, as well as in the case of irreproducible software errors. In the event that improper modifications or repair work are carried out by the customer or any third party, no claims shall be accepted for defects arising from these, or for any resulting consequential damages.

Claims submitted by the customer for necessary expenditures incurred for the purpose of rework, in particular transport costs, travel costs, labor costs and material costs, are excluded if the expenditures increases due to the fact that the supplied item is subsequently transported to a place other than the customer’s place of business, unless this corresponds to its use for intended purpose.

The customer’s right of redress against the supplier in accordance with paragraph 478 of the BGB (Rückgriff des Unternehmers) is only valid insofar as the customer has not reached any agreements with his customer which go beyond legally valid defect claims. Furthermore, point 8 applies with regard to the scope of the customer’s right of redress against the supplier in accordance with paragraph 478, section 2 of the BGB (German commercial code).

Article XI (Miscellaneous claims for damages) applies to compensation claims as well. Further reaching customer claims, and customer claims other than those regulated by article VIII with are brought against the supplier and his agents with regard to a material defect are excluded.
 
IX. Industrial property rights and copyrights; Defects of title.

Provided there is no agreement to the contrary, the supplier is only obliged to provide goods and/or services which are free from third party industrial property rights and copyrights (hereinafter “industrial property rights”) within the supplier’s own country. Where a third party makes a legitimate claim against the customer regarding a violation of industrial property rights for the use of the goods/service supplied by the supplier in accordance with the contract, the supplier assumes liability as follows in relation to the customer, which must be discharged within the period set forth in article VIII, point 2:

a) The supplier shall, at his own expense and discretion, either secure right of use for the deliveries in question, alter them so that the industrial property right is no longer violated, or exchange them. If this is not reasonably possible for the supplier, the customer has the right to withdrawal or reduction of price.

b) The supplier’s duty regarding payment of compensation is subject to Art. XI.

c) The above-named supplier obligations apply only if the customer notifies the supplier without delay of claims submitted by a third party, does not acknowledge violation and leaves all defense measures and settlement negotiations to the supplier. If the customer stops using the supplied goods in order to avoid further damages or for any other important reason, he is obliged to inform the third party that non-use is not an acknowledgement of violation of industrial property rights.

Claims submitted by the customer are excluded in so far as he himself is responsible for the violation of the industrial property right.

Claims submitted by the customer are also excluded if violation of industrial property rights results from special instructions issued by the customer, an application which could not be foreseen by the supplier or because the supplied goods are modified or used together with products not supplied by the supplier.

Otherwise, the provisions set forth in article VIII, points 4, 5 and 9, apply correspondingly to customer claims governed by point 1 a) above in cases of violation of industrial property rights.

In the event of other defects of title, the provisions set forth in article VIII shall apply.

Further reaching or other customer claims against the supplier and his agents due to defects of title not governed by article IX are excluded.
 
X. Impossibility of performance, contract adaptation
If delivery becomes impossible for the supplier due to a reason for which he is responsible, the customer is entitled to demand compensation. However, the customer’s compensation claim is restricted to 10% of the value of those portions of the delivery which, because of the impossibility of performance, cannot be used as intended. This does not apply in cases where there is compelling liability of intent, gross negligence or initial incapacity. This does not amount to a change in the burden of proof to the disadvantage of the customer. The customer’s right to withdraw from the contract remains untouched.
 
Unless unforeseeable events in the spirit of article IV, point 2, significantly change the economic significance or the content of the delivery, or significantly affect the supplier’s business, the contract shall be appropriately adapted with all due regard to equity. Where this is not economically tenable, the supplier has the right to withdraw from the contract. If he wishes to exercise this right to withdraw, he must notify the customer without delay after recognizing the implications of the event, even if an extension of the delivery time had been initially agreed upon with the customer.
 
XI. Miscellaneous claims for damages
Claims for compensation of damages and expenditures submitted by the customer (hereinafter “compensation claims”) on whatever legal grounds, particularly due to breach of duty arising from contractual obligation and from unlawful acts, are excluded.

This does not apply in the event of mandatory liability, for example in accordance with product liability law, in cases of intent or gross negligence, on account of injury to life, person or health, and due to breach of fundamental contractual obligations. However, compensation claims for breach of fundamental contractual obligations are restricted to damages foreseeable and typical for this type of contract, as long as there is no intent or gross negligence, or no liability for injury to life, person or health. The above stipulations do not amount to a change in the burden of proof to the disadvantage of the customer.
 Where the customer is entitled to a compensation claim in accordance with article XI, this comes under the statute of limitations with expiry of the statutory period of limitation applicable for material defect claims in accordance with article VIII, point 2. In the event of compensation claims in accordance with product liability law, the legal regulations regarding statutes of limitation shall apply.

 
XII. Legal domicile and applicable law

If the customer is a commercial entity, the sole legal domicile for all disputes arising directly or indirectly from the contractual relationship is the supplier’s domicile. The supplier also has the right, however, to bring an action in the customer’s domicile.

For legal matters relating to this contract, German law applies to the exclusion of the United Nations Convention on Contracts for the International Sale of Goods (CISG).

XIII. Binding force of the contract

Even where individual provisions are legally invalid, the remaining parts of the contract are binding. This does not apply when compliance with the contract represents an unreasonable hardship for one party.

 
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