1. DEFINITIONS
1.1 The term ‘Buyer’ shall mean the firm or company so named in the Purchase Order, or if not so named, shall be the registered owner of the Vessel mentioned in the Purchase Order.
1.2 The term ‘Seller’ shall mean the person, firm or company to whom the Purchase Order is issued.
1.3 The word ‘goods’ includes all goods covered by the Purchase Order including raw materials, processed materials or fabricated products.
1.4 The term ‘Purchase Order’ shall mean the Purchase Order issued to the Seller by or on behalf of the Buyer specifying that these terms and conditions apply to it.
1.5 The ‘Contract’ shall mean the contract between the Buyer and Seller consisting of the Purchase Order, these Terms and Conditions of Purchase and any other documents (or parts thereof) specified in the Purchase Order. In the event of any conflict between the documents comprising the Contract, the provisions of these Terms and Conditions shall prevail.
1.6 ‘Vessel’ means the vessel (if any) identified in the Purchase Order.
2. QUALITY ASSURANCE SYSTEM
2.1 The Seller confirms that all goods being supplied are in accordance with quality assurance standard ISO 9000, or an equivalent auditable system.
2.2 The Seller confirms that all goods being supplied and tendered for delivery are in strict compliance with the Seller’s original equipment manufacturers specification, drawing and quality. Seller agrees that original equipment manufacturer’s certificate of conformity, where applicable, will be supplied to the Buyer for all goods covered by a Purchase Order. Goods supplied shall also comply with all applicable laws and regulations, and any applicable requirements of the Vessel’s classification society.
3. DELIVERY DATE
The date of delivery of goods shall be that specified in the Purchase Order unless otherwise agreed between Buyer and Seller. The Seller shall furnish such schedules of manufacture and delivery as the Buyer may reasonably require and give notice in writing to the Buyer as soon as practicable, if such schedules are or are likely to be delayed.
4. INCORRECT DELIVERY
All goods must be delivered at the delivery point specified in the Purchase Order or as subsequently agreed in writing between Buyer and Seller. If goods are incorrectly delivered, the Seller will be held responsible for any additional expense incurred in delivering such goods to their correct destination.
5. PASSING OF PROPERTY AND RISK TO BUYER
The property and risk in the goods shall remain with the Seller until they are delivered at the point agreed in Clause 4 above.
6. TERMS OF PAYMENT
Payment shall be made in the manner and at the time or times agreed by the parties.
7. VALUE ADDED TAX
Buyer certifies the goods subject to the Purchase Order are solely for use onboard an ocean going vessel and/or are for direct export and/or are being delivered to an export warehouse for eventual export, and accordingly in all cases should be zero-rated.
8. INSURANCE
Until the goods are delivered in accordance with Clause 4 above, Seller shall be responsible to insure the goods against all usual risks to full replacement value. All premiums and deductibles shall be for the account of the Seller.
9. LOSS IN TRANSIT
9.1 Buyer shall advise Seller and the carrier (if any) in writing of partial loss, damage, defects or non-delivery of the whole or part of a consignment of the goods within 30 days from the date the Buyer becomes aware of such loss.
9.2 In case of partial loss, damage, defects or non-delivery of the goods, the Buyer is entitled to determine whether the Seller is obliged to compensate the Buyer for such loss or supply the Buyer with the same goods without any charge, where the Buyer has already been invoiced for such goods.
10. ACCEPTANCE
In the case that any goods are delivered by the Seller which do not conform with the Contract whether by reason that the quantity of measurement is not as stipulated or the goods are not of satisfactory quality or are not reasonably fit for the purpose for which they are required where such purpose has been made known in writing to Seller, or otherwise, the Buyer shall have the right to reject such goods within a reasonable time of their delivery and to purchase elsewhere at the Sellers’ cost, as near as practicable to the same Contract specifications and conditions as circumstances shall permit but without prejudice to any other right which the Buyer might have against the Seller. The making of payment shall not prejudice the Buyer’s right of rejection. Prior to exercising the its right to purchase replacement goods elsewhere, the Buyer shall, if practicable, give the Seller reasonable opportunity to replace the goods with goods which conform to the Contract.
11. VARIATIONS
The Seller shall not alter any of the goods, except as directed in writing by Buyer; however the Buyer shall have the right, from time to time during the execution of the Contract, by notice in writing to direct Seller to add to or omit, or otherwise vary, the goods, and Seller shall carry out such variations and be bound by the same conditions as far as applicable, as though the said variations were stated in the Contract. In the event the Seller receives any such direction from the Buyer which would require an amendment to the Contract price, Seller shall as soon as possible, advise Buyer in writing stating the amount of any such amendment to price, calculated by reference to the same pricing structure as that set out in the Contract. If, in the opinion of Seller, any such direction from the Buyer is likely to prevent the Seller from fulfilling any of its obligations under the Contract the Seller shall notify Buyer and Buyer shall determine whether or not the same shall be carried out and shall confirm his instructions in writing,. Unless and until the Buyer confirms his instructions in writing, the Contract shall remain in full force and effect unamended by the Buyer’s direction.
12. PATENT RIGHTS
Seller will indemnify Buyer against any claim for infringement of Letters Patent, Registered Design, Trade Mark or Copyright by the use or sale of the goods or any part thereof and against all costs and damages which the Buyer may incur in any action for such infringement or for which Buyer may become liable in such action. Provided always that this indemnity shall not apply to any infringement which is due to Seller having followed a design or instruction furnished or given by Buyer or to the use of the goods or any part thereof in a manner or for a purpose not specified by or disclosed to Seller, or to any infringement which is due to the use of the goods or any part thereof in association or combination with any other article or material not supplied by Seller.
13. FORCE MAJEURE
Neither party shall be liable for failure to perform its obligations under the Contract if such failure results from circumstances which could not have been contemplated at the time the Contract was entered into, and which are beyond the affected party’s reasonable control and without fault or negligence on the part of the affected party
14. PROGRESS AND INSPECTION
Buyer’s representatives shall have the right to progress and inspect all goods at Seller’s works and the works of sub-contractors of the Seller at all reasonable times and to reject goods that do not comply with the terms of the Contract. Seller’s sub-contracts shall include this provision. Any inspection, checking, approval or acceptance given on behalf of representatives of the Buyer shall not relieve the Seller from any obligation under the Contract.
15. BUYER’S RIGHTS IN SPECIFICATIONS, PLANS, DRAWINGS, PATTERNS, ETC.
Any specifications, plans, drawings, patterns or designs supplied by the Buyer to the Seller in connection with the Contract shall remain the property of Buyer, shall be private and confidential to the Buyer and shall not, without the consent in writing of Buyer, be published or disclosed to any third party, or made use of by Seller except for the purpose of implementing the Contract.
16. RESPONSIBILITY FOR INFORMATION
The Seller shall be responsible for any errors or omissions in any drawings, calculations, packing details or other particulars supplied by it, regardless of whether such information has been approved by the Buyer, provided that such errors or omissions are not due to inaccurate information furnished in writing by the Buyer.
17. ASSIGNMENT AND SUB-LETTING
The Contract shall not be assigned by Seller or sub-contracted as a whole. The Seller shall not sub-contract any part of the work without the Buyer’s written consent, however the restriction contained in this clause shall not apply to sub-contracts for materials, for minor details, or for any part for which the makers are named in the Contract. Seller shall be responsible for all work done and goods supplied by all sub-contractors, including compliance with applicable quality assurance standards, applicable laws or regulations and the Vessel’s classification society requirements.
18. COPIES OF SUB-ORDERS
When Buyer has consented to the placing of sub-contracts, copies of each sub-contract or order shall be sent by the Seller to the Buyer as soon as it is issued.
19. DETERIORATION
Except where stated otherwise in the Purchase Order the Seller shall protect any item or part that might deteriorate during transportation or storage.
20. FREE-ISSUE MATERIALS
Where the Buyer for the purposes of the Contract issues materials free of charge to the Seller, such materials shall be and remain the property of Buyer. The Seller shall maintain all such materials in good order and condition subject, in the case of tooling patterns and the like, to fair wear and tear. The Seller shall only use such materials in connection with the Contract. Any surplus materials shall be disposed of at Buyer’s discretion. Waste of such materials arising from bad workmanship or negligence of Seller shall be made good at the Seller’s expense. Without prejudice to any other of the rights of the Buyer, the Seller shall deliver up such materials whether further processed or not to Buyer on demand.
21. WARRANTY/DAMAGES/LIMITATION OF LIABILITY
The Seller shall as soon as reasonably practicable repair or replace all goods which are or become defective during the period of 12 months from putting into service or 18 months from delivery, whichever shall be the shorter, where such defects occur under proper usage and are due to faulty design, and/or Seller’s erroneous instructions as to use or erroneous use of data, and/or inadequate or faulty materials or workmanship, and/or any other breach or Seller’s obligations, express or implied. Repairs and replacements shall themselves be subject to the foregoing obligations for a period of 12 months from the date of delivery, reinstallation or passing of test (if any) whichever is appropriate after repair or replacement. The Seller shall further be liable in damages (if any) suffered by the Buyer as a result of breach of the Seller’s obligations under the Contract.
22. INSOLVENCY AND BANKRUPTCY
If Seller becomes insolvent or bankrupt or (being a Company) makes an arrangement with its creditors or has an administrative receiver, administrator or similar officer appointed or commences proceedings to be wound up (other than for the purpose of amalgamation or reconstruction), the Buyer may, without prejudice to any other rights under the Contract, terminate the Contract forthwith by notice to Seller or any person in whom the Contract may have become vested.
23. GENERAL CONDITIONS OF SELLER
No conditions submitted or referred to by Seller when tendering or otherwise referred to by Seller in quotations or correspondence shall form part of the Contract unless otherwise agreed to in writing by Buyer.
24. AGENCY
Contships Management Inc. is acting as agent only for and on behalf of the Buyer and assumes no liability or responsibility for the obligations of the Buyer and is not responsible for any failure of the Buyer to fulfil its obligations under the Contract notwithstanding any rule of law to the contrary.
25. GOVERNING LAW AND ARBITRATION
25.1 The construction, validity and performance of the Contract shall be governed by and construed in accordance with the laws of England and Wales, and any dispute arising out of or in connection with the Contract shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof for the time being in force, save to the extent necessary to give effect to the provisions of this Clause.
25.2 The arbitration shall be conducted in accordance with the London Maritime Arbitrators’ Association (LMAA) Terms current at the time when the arbitration is commenced.
25.3 Save as mentioned below, the reference shall be to three arbitrators, one to be appointed by each party and the third by the two so appointed. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment to the other party requiring the other party to appoint its arbitrator within 14 days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and give notice that it has done so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified, the party referring the dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be as binding as if he had been appointed by agreement.
25.4 In cases where neither the claim nor any counterclaim exceeds the sum of US$ 50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.