CIF Model Contract for
Importation of Contract Plant
Table Content
Chapter 1 ……………………………………Definition
Chapter 2 ……………………………………Scope of the Contract
Chapter 3 ……………………………………Price
Chapter 4 ……………………………………Payment
Chapter 5 ……………………………………Delivery and Insurance
Chapter 6 ……………………………………Packing and Marking
Chapter 7 ……………………………………Technical Documentation
Chapter 8 ……………………………………Design and Design Liaison
Chapter 9 ……………………………………Standards and Inspection
Chapter 10 ……………………………………Erection,Test Runs, Commissioning,Performance Test and Acceptance
Chapter 11 ……………………………………Guarantee and Warranty
Chapter 12 ……………………………………Improvement and Grant-back
Chapter 13 ……………………………………Confidentiality
Chapter 14 ……………………………………Claim
Chapter 15 ……………………………………Cancellation
Chapter 16 ……………………………………Force Majeure
Chapter 17 ……………………………………Taxes and Duties
Chapter 18 ……………………………………Arbitration
Chapter 19 ……………………………………Effectiveness of the Contract
and Miscellaneous
List of Appendices
Appendix 1 The List of Contract Equipment within the Seller's Supply Scope (Omitted)
Appendix 2 Contents of Patent and/or Know-how and Delivery Schedule of elated Documentation (Omitted)
Appendix 3 Specification, Performance, Guarantee Indices and Warranty for the Contract Equipment, Contract Plant and Contract Product (Omitted)
Appendix 4 The Contents of Technical Service and the Treatment for the Seller's Technical Personnel
Appendix 5 The Contents of Technical Training and the Treatment for the Buyer's Technical Personnel
Appendix 6 The Delivery Schedule of Contract Equipment (Omitted)
Appendix 7 The List of the Itemized Price for the Contract Plant (Omitted)
Appendix 8 The Arrangement for Design Liaison and Delivery of Design Package (Omitted)
Appendix 9 The Standard and Codes for Design (Omitted)
Appendix 10 The Arrangement for Erection, Test Runs, Commissioning, Performance Test and Acceptance (Omitted)
Appendix 11 The Specimen of Irrevocable Letter of Guarantee for Advance Payment Issued by the Seller's Bank
Appendix 12 The Specimen of Irrevocable Letter of Guarantee Issued by the Seller's Bank
CIF Model Contract for Importation of Complete Plant
Contract No.__________________.
Date of Signature: _____________.
Place of Signature:_____________.
This Contract is made and entered into through friendly negotiation by and between China ____________________Corporation, a corporation organized and existing under the laws of the People's Republic of China (hereinafter referred to as "the Buyer"), as one party and__________, a corporation organized and existing under the laws of __________ (hereinafter referred to as "the Seller"), as the other party, under the following terms and conditions:
Chapter 1 Definition
In the Contract unless the context otherwise defines,
1.1 Contact Equipment means the equipment, materials, spare parts or any part thereof supplied by the Seller including those with which Contract Products are produced, details of which are specified in Appendix 1 and 3 to the Contract.
1.2 Contract Plant means the plant comprised of Contract Equipment, Technology and the complete sets of auxiliary facilities, details as per Appendix 3 to the Contract.
1.3 Contract Product means the products manufactured in the Contract Plant, the technical specifications, performance and guarantee indices of which are specified in Appendix 3.
1.4 Contract Price means the sum payable to the Seller under the Contract for full and proper performance of its contractual obligations, details of which are specified in Appendix 7.
1.5 Contract Currency means the currency in which the payment is made under the Contract, namely____________________ .
1.6 Both Parties' Banks, refer to_____________, as Buyer's Bank; ____________________, as Seller's Bank.
1.7 Erection means the installation of the equipment, spare parts and materials including placing and connecting the parts to their positions according to the design drawing, details of which are specified in Appendix 10.
1.8 Test Runs means the test conducted respectively on the individual equipment and a series of equipment after Erection in order to check the mechanical performance of Contract Equipment, details of which are specified in Appendix 10.
1.9 Commissioning means the initial production of the Contract Plant for the purpose ofcarrying out the Performance Test after the utilities being connected and the raw materials being put into the Contract Plant, details of which are specified in Appendix 10.
1.10 Performance Test means the tests conducted pursuant to Appendix 10, in order to identify whether the Contract Plant and the Contract Product have achieved the technical performance and guarantee indices specified in Appendix 3.
1.11 Acceptance means the Buyer accepts the Contract Plant after it reaches the technical performance and guarantee indices specified in Appendix 3.
1. 12 Port of Shipment and Unloading refers to____________________ port, as Port of Shipment;____________________ port as Port of Unloading.
1.13 Destination Airport refers to____________________ , PRC.
1.14 Job Site means the place where the Contract Plant is located, namely____________,________________ city,________________ Province, PRC.
1.15 Site Representative means the representative nominated respectively by each Party, who is in charge of all the matters with respect to the contractual obligations of the respective Party on the Job Site.
1.16 Technical Documentation means the technical indices, specifications, drawings and documents related to Design, Inspection, Erection, Test Runs, Commissioning, Performance Test, operation and maintenance of Contract Plant, details of which are specified in Appendix 2, 3, 8 and 9.
1.17 Technical Service means the technical instruction, assistance and supervision rendered by the Seller to the Buyer with respect to Erection, Test Runs, Commissioning, Performance Test, operation, maintenance and other work related to the Contract Plant, details of which are specified in Appendix 4.
1.18 Technical Training means the training rendered by the Seller to the Buyer with respect to Erection, Test Runs, Commissioning, Performance Test, operation, maintenance and other work related to the Contract Plant, details of which are specified in Appendix 5.
1.19 Inspection Authorities refers to the local inspection branch of State Administration for Entry-Exit Inspection and Quarantine of PRC located at/near the Port of Unloading and/or the Job Site.
1.20 Warranty Period means a period starting from the date of acceptance, during which the Seller warrants the proper and stable operation of the Contract Plant and is responsible for eliminating any defects with respect to the Contract Plant, detail of which are specified in Appendix 3.
1.21 Effective Date of the Contract means the date when the contract is approved by competent authorities of the respective Party's countries.
Chapter 2 Scope of the Contract
2.1 The Buyer agrees to buy from the Seller and the Seller agrees to sell to the Buyer __________(Contract Plant), including the Contract Equipment, licensed patent and /or know-how, design, Technical Documentation, Technical Service and Technical Training, contents of which are specified in Appendix 1, 2, 4, 5, 8 and 9.
2.2 The Seller shall supply the Contract Equipment listed in Appendix 1. The technical specification, performance and guarantee indices of the Contract Equipment are specified in Appendix 3.
2.3 The Seller agrees to grant the Buyer a exclusive/or non-exclusive and transferable/or non-transferable license to use the patent and/or know-how in order to manufacture and sell the Contract Product within the territory of PRC, and export to__________ (country), details of which are specified in Appendix 2.
The Seller shall not prohibit the Buyer from using the patent and / or know-how after the expiration of the Contract.
2.4 The Seller shall undertake the design work with respect to the Contract Plant, details of which shall be as per Appendix 8.
2.5 The Seller shall submit to the Buyer the Technical Documentation as specified in Appendix 2,3,8, and 9.
2.6 The Seller shall dispatch its experienced, healthy and competent technical personnel to the Job Site to render Technical Service, details as per Appendix 4.
2.7 The Seller shall render Technical Training to the technical personnel dispatched by the Buyer. The number of personnel, training place and the extent of training are shown in Appendix 5.
2.8 The Seller shall, at the Buyer's request, provide the Buyer with spare parts for normal operation of the Contract Plant at favorable prices within_____years after the Acceptance of the Contract Plant. A separate agreement will be signed between the two Parties at that time.
Chapter 3 Price
3.1 The total Contract Price for Contract Equipment, license of patent and/or know-how, design, Technical Documentation, Technical Service and Technical Training to be rendered by the Seller under the contract _________(say: __________only).
3.2 The breakdown price for the Contract Plant:
3.2.1 Price for Contract Equipment:
A. Price for equipment;
B. Price for spare parts;
C. Price for material;
D. Fees for insurance and freight.
3.2.2 Fees for licensed patent and/or know-how and related Technical Documentation:
3.2.3 Fees for design and related Technical Documentation:
A. Design fee related to Contract Equipment and relevant Technical Documentation fee;
B. Design fee related to licensed patent and/or know-how and relevant Technical Documentation fee;
3.2.4 Fees for Technical Service:
A.Fee for technical service related to Contract Equipment;
B.Fee for technical service related to the licensed patent and/or know-how.
3.2.5 Fees for Technical Training:
A. Fee for technical training related to Contract Equipment;
B. Fee for technical training related to the licensed patent and/or know-how.
3.3 The total Contract Price as specified in Article 3.1 is a fixed and firm price.
3.4 The Technical Service fee specified herein is the ceiling price for all theservice necessary for the performance of the contract. In case the service actually performed is less than estimated, the Buyer will pay the Seller the actual amount duly calculated.
3.5 The price for Contract Equipment as specified in Article 3.2.1 is for delivery CIF (liner term) Port of Unloading and the price for Technical Documentation as specified in Articles 3.2.2 and 3.2.3 is for delivery DDU Destination Airport.
3.6 The itemized price list of the Contract Plant in Appendix 7.
Chapter 4 Payment
4.1 All payments to be made by the Buyer to the Seller shall be effected through the Buyer's Bank and the Seller's Bank in Contract Currency.
4.2 The Buyer shall make the payment in the following method:
Option One:
The total Contract price shall be Paid by Telegraphic Transfer (T/T) according to the following installments and percentage upon presentation of the following documents.
Option Two:
The total Contract Price shall be paid by Documents against Payment (D/P) or Documents against Acceptance (D/A) according to the following installments and percentage upon presentation of the following documents.
Option Three:
The total Contract Price, except the advance payment and the Technical Service fee, shall be paid by Irrevocable Letter of Credit. The advance payment and the Technical Service fee shall be paid by Documents against Payment (D/P). The Buyer shall, within _____days after the Effective Date of the Contract, open an Irrevocable Letter of Credit, in favor of the Seller for thesaid amount. The Letter of Credit shall remain valid until__________.
4.2.1 Advance Payment
_____ Percent (_____%) of the price as specified in Article 3.2.1, 3.2.2, 3.2.3 and 3.2.5, i.e. (say_________only) shall be paid by the Buyer to the Seller within_____days after the following documents have been received and found in order:
A. One (1) original and two (2) duplicate copies of the valid export license issued by relevant authorities of the Seller's and/or manufacture's country or a statement of relevant authorities/agency certifying that no export license is required;
B. One (1) original and one (1) duplicate copy of the Irrevocable Letter of Guarantee for advance payment issued by the Seller's Bank in favor of the Buyer covering__________(say__________only), specimen of which is specified in Appendix 11;
C. Five (5) copies of pro-forma invoice covering the Contract Price;
D. Five (5) copies of manually signed commercial invoice indicating the amount to be paid and the portion related to the licensed patent and/or know-how;
E. Two (2) copies of sight draft.
4.2.2 Payment for license, design, Technical Training and Technical Documentation
4.2.2.1 ____Percent (_____ %) of the price for license, design, Technical Training and Technical Documentation as specified in Article 3.2.2,3.2.3 and 3.2.i.e.____________________(say ____________________only) shall be paid by the Buyer to the Seller upon delivery of the basic design package by the Seller and within_____days after the following documents have been received and found in order:
A. One (1) original and three (3) duplicate copies of the airway bill marked "REIGHT PREPAID"or receipt of registered airmail for the delivery of basic design package;
B. Five (5) copies of manually signed commercial invoice indicating the amount to be paid and the portion related to license of patent and/or know-how;
C. Two (2) copies of sight draft.
4.2.2.2 ________ Percent (_____%) of the price for license, design, Technical Training and Technical Documentation as specified in Article 3.2.2,3.2.3 and 3.2.5 i.e. __________________(say__________________only) shall be paid by the Buyer to the Seller upon delivery of the detailed design package by the Seller and within_____days after the following documents have been received and found in order:
A. One (1) original and three (3) duplicate copies of the airway bill marked "REIGHT PREPAID" or receipt of registered airmail for the delivery of detailed design package;
B. Five (5) copies of manually signed commercial invoice indicating the amount to be paid and the portion related to license of patent and/or know-how;
C. Two (2) copies of sight draft.
4.2.3 Payment of Contract Equipment
_____Percent (_____%) of the price for Contract Equipment as specified in Chapter 3.2.1, i.e. (say__________only) shall be paid by the Buyer to the Seller pro rata upon each shipment and within_____days after the following documents have been received and found in order:
A. Three (3) originals and three (3) duplicate copies of clean on board ocean Bill of Lading made out to order, blank endorsed, notifying________and marked "REIGHT PREPAID";
B. Two (2) originals and two (2) duplicate copies of ocean transportation insurance policy or certificate for 110% of the invoice value of Contract Equipment showing claims payable in China in Contract Currency and covering all risks, war risk and on deck risk if applicable;
C. Five (5) copies of manually signed commercial invoice indicating the amount to be paid and the itemized price;
D. One (1) original and five (5) duplicate copies of detailed packing list indicating the shipping weight, number and the date of the corresponding invoice;
E. One (1) original and five (5) duplicate copies of ex-works quality certificate issued by the manufacturer;
F. Two (2) copies of sight draft;
G. One (1) original and five (5) duplicate copies of certificate of origin issued by relevant authorities or agency of the manufacture's country;
H. One (1) copy of the Buyer's fax showing that the carrying vessel has been approved by the Buyer;
I. One (1) copy of fax advising the Buyer of the shipment immediately after it is made.
4.2.4 Payment after the Acceptance of the Contract Plant
_____Percent (_____%) of the price as specified in Article 3.2.1, 3.2.2, 3.2.3 and 3.2.5, i.e.____________________(say____________________only) shall be paid by the Buyer to the Seller within_____days after the following documents have been received and found in order:
A. One (1) copy of the Acceptance Certificate of the Contract Plant signed by the Site Representatives of two Parties;
B. Five (5) copies of manually signed commercial invoice indicating the amount to be paid and the portion related to the licensed patent and/or know-how;
C. Two (2) copies of sight draft.
4.2.5 Payment after the Expiration of the Warranty Period of the Contract Plant
_____Percent (_____%) of the contract price as specified in Article 3.2.1, 3.2.2, 3.2.3 and 3.2.5,i.e.____________________(say ____________________only) shall be paid by the Buyer to the Seller within _____days after the following documents have been received and found in order:
A. One (1) copy of the Certificate certifying the expiration of the Warranty Period of the Contract Plant issued by the Buyer;
B. Five (5) copies of manually signed commercial invoice indicating the amount to be paid and the portion related to license of patent and/or know-how;
C. Two (2) copies of sight draft.
4.2.6 Payment for Technical Service
The Technical Service fee as specified in Article 3.2.4 shall be paid by the Buyer to the Seller once every _____months after the arrival of the first group of the Seller's technical personnel at the Job Site and within _____days after the following documents have been received and found in order:
A. Five (5) copies of manually signed commercial invoice indicating the amount to be paid and the portion related to license of patent and/or know-how;
B. Two (2) copies of time sheets signed by the Site Representatives of two Parties;
C. Two (2) copies of sight draft.
4.3 If the Seller fails to submit the documents specified in Article 4.2.3 in due time, all the costs thus incurred at the Port of Unloading including but not limited to storage expenses and overdue fine shall be borne by the Seller.
4.4 In case the Seller is liable for paying the withholding taxes, liquidated damage and/or compensation under the Contract, the Buyer has the right to deduct such amount from any payment due.
4.5 All the banking charges incurred in the Buyer's Bank shall be borne by the Buyer while those incurred outside the Buyer's Bank shall be borne by the Seller.
Chapter 5 Delivery and Insurance
5.1 The Seller shall complete the delivery of Contract Equipment in _____ lots within _____ months after the Effective Date of the Contract.
5.2 The Contract Equipment is approximately __________ metric tons in gross weight, __________ metric tons in net weight and __________ metric tons in total volume.
5.3 The Port of Shipping the Contract Equipment is_____________, the port of unloading is_________________.
5.4 The Seller shall, in accordance with the delivery schedule as specified in Appendix 6, submit six (6) copies of preliminary delivery schedule to the Buyer within _____ months after the Effective Date of the Contract. The preliminary delivery schedule shall include Contract No., item No., name and type of Contract Equipment, specification, quantity, unit/total price, the approximate total gross and volume, expected delivery time, Port of Shipment, name of dangerous and/or inflammable goods and their IMCO No.(as per International Maritime Dangerous Goods Code), the dimension (length, width, height and volume) and approximate weight of the oversize and/or overweight Contract Equipment as well as special requirements and precautions for the transportation and storage of dangerous and/or inflammable goods.
5.5 The maximum weight of each inseparable/integrated Contract Equipment is twenty (20) metric tons while the maximum measurement is 12 x 2.7 x 3 meters. The Seller shall present the Buyer six (6) copies of the sketch for those Contract Equipment beyond the said limits for discuss within _____ months after the Effective Date of the Contract, and only after having the Buyer's confirmation can the Seller arrange the production of such Equipment. The Buyer shall confirm it by writings within _____ days after having received the said sketch, otherwise the Seller can start the fabrication.
5.6 Within _____ months after the Effective Date of the Contract, the Seller shall submit to the Buyer the final delivery schedule in six (6) copies, which shall include the following items: Contract No., name and type of Contract Equipment, item No., specification, quantity, name of dangerous and/or inflammable goods and their IMCO No.(as per International Maritime Dangerous Goods Code), the approximate total gross and volume, unit/total price, the dimension (length, width, height and volume), port of Shipment and expected loading date, as well as the overall packing sketch of oversize and/or overweight Contract Equipment
5.7 If any Contract Equipment contains dangerous and/or inflammable items the Seller shall submit an English description in six (6) copies indicating the name, characteristic, special handling and protective measures in case of accidents in respect of such items. The Seller shall instruct the shipping company to indicate in the Bill of Lading the case No./container
5.8 For the Contract Equipment that requires special storage, the Seller shall present English description in six (6) copies stating special precautions in inland transportation and storage.
5.9 Each piece of Contract Equipment shall be shipped in complete set whenever possible. The special tool for Erection, materials and easily worn-out parts shall be dispatched along with the main equipment concerned. In case any Contract Equipment is agreed to be shipped on deck, the Seller shall take special protective measures.
5.10 Not later than _____ days before the readiness for each shipment, the Seller shall notify the Buyer by fax of the following contents:
A. Contract No.;
B. Date of readiness for the shipments;
C. Total volume;
D. Total gross weight/total number of packages;
E. Port of Shipment;
F. Name, total gross weight and measurements of each piece exceeding twenty (20) metric tons in weight or 12 x 2.7 x 3 meters in measurement;
G. Name, weight, IMCO No. (as per International Maritime Dangerous Goods Code) of the dangerous and/or inflammable goods.
In the meantime the Seller shall airmail the following documents in six (6) duplicate copies to the Buyer:
A. The details list of the shipment covering Contract No., item No., name of the Contract Equipment, specification, type, quantity, unit/total price, unit weight, unit/total volume, the overall dimensions of each package (length x width x height), total number of packages and Port of Shipment.
B. Overall packing sketch for each large piece exceeding twenty (20) metric tons in weight or 12 x 2.7 x 3 meters in measurement;
C. Description of any dangerous and/or inflammable goods indicating names, properties, special protective measures and handling methods in case of accident;
D. Description of the special precautions for the Contract Equipment that requires special storage and transportation.
Another duplicate copy of the said documents shall be airmailed to the transportation agent appointed by the Buyer as the basis of arranging inland transportation, loading and unloading of the Contract Equipment.
5.11 The Seller shall be responsible for booking the shipping space and may choose any shipping company from the following list: ______________.
In case the shipping company listed above cannot provide the vessel to meet the shipping requirement under the Contract, the Seller shall charter a vessel from a shipping company with good reputation. The chartered vessel shall not exceed fifteen (15) years of service with a good record of carrying goods and shall be of any flag or nationality acceptable to the governments of two parties' countries. If the vessel has been in service for more than fifteen (15) years, old age vessel insurance shall be covered by the Seller at its own cost.
Not later than _____ days before each shipment, the Seller shall notify the Buyer of the information including the name of the proposed vessel, age, nationality, the registered place, owner, shipping line, the shipping route and the estimated date of departure from Port of Shipment and the estimated date of arrival at Port of Unloading for approval. In case no written comment or disapproval is given within _____ days upon the Buyer's receipt of the said notification, the proposed vessel shall be deemed as approved.
5.12 Unless otherwise agreed by the Buyer, "shipped on deck" or "transshipment" is not acceptable.
5.13 In order to facilitate the receipt of the Contract Equipment and inland transportation, the Seller shall, within _____ hours after loading, inform the Buyer by fax of the following information: Contract No., name of Contract Equipment, actual loading quantity, total gross weight, total volume, vessel name, completion date of loading or sailing date, the estimated date of arrival at the Port of Unloading. If the actual loading details of large pieces of Contract Equipment are different from those indicated in the Seller's prior notification, the differences shall be stated respectively.
Within _____ days after loading the Contract Equipment, the Seller shall airmail one (1) duplicate copy of the Bill of Lading, manually signed commercial invoice, ex-works quality certificate of origin, certificate or policy of insurance and packing list to the Buyer and the consignee respectively.
5.14 The third party ocean Bill of Lading is not acceptable.
5.15 In case the Seller fail to make delivery in accordance with the final delivery schedule,the Seller shall pay the liquidated damages for late delivery at the following rates:
A. From the first to the fourth week, the liquidated damage shall be ____ percent of the value of the delayed Contract Equipment per week.
B. From the fifth to the eighth week, the liquidated damage shall be ____ percent of the value of the delayed Contract Equipment per week.
C. After the ninth week, the liquidated damage shall be percent of the value of the delayed Contract Equipment per week.
Odd days less than one (1) week shall be counted as one week for calculating the liquidated damage. The total amount of the liquidated damages shall not exceed _____ percent of the total Contract Price. The payment of liquidated damages shall not release the Seller from its obligation to deliver the delayed Contract Equipment.
5.16 The Seller shall effect insurance against all risks, war risk and on deck risk if applicable, with a first class insurance company covering 110% of the invoice value of the Contract Equipment with the Buyer as the beneficiary. The insurance has to be covered in the Contract Currency showing claims payable in China and with no deductible clause.
In case the Contract Equipment are lost and/or damaged in the ocean transportation, the Seller shall assist the Buyer to apply to the insurance company for compensation or lodge claims against the insurance company on behalf of the Buyer and effect, upon the Buyer's request, supplementary supply of the same at the original Contract Price.
Chapter 6 Packing and Marking
6.1 Unless otherwise specified in the Contract, the Contract Equipment shall be packed by the Seller in new and wooden cases and necessary measures shall be taken to protect the Contract Equipment from moisture, rain, rust, corrosion, shock and damages according to their different shapes and special features so as to make the Contract Equipment withstand numerous handling, loading and unloading as well as long distance ocean and inland transportation to ensure the Contract Equipment safe arrival at the Working Site without any damage or corrosion.
6.2 The loose accessories in package or bundle shall be labeled by the Seller indicating Contract No., name of main equipment, name of accessories and their position number and accessory number marked on assembling drawings. Spare parts and tools shall be marked with the words "SPARE PARTS" or "TOOLS" besides the above mentioned particulars.
6.3 The Seller shall, on four (4) adjacent sides of each package, mark conspicuously the following items in English with indelible paint:
A. Contract No.;
B. Shipping Mark;
C. Destination;
D. Consignee;
E. Name of Contract Equipment and Item No.;
F. Case No./Bale No.;
G. Gross/Net weight;
H. Measurement (length X width X height in cm).
Should the Contract Equipment weight 2 or more than 2 metric tons, the weight, gravity and hoisting position shall be marked in English and with international trade transportation practice marks illustrative marks on the four adjacent sides of each case so as to facilitate and loading, unloading and handling. In accordance with the characteristics and different requirements in loading, unloading and shipping different equipment, the package shall be conspicuously marked with "HANDLE WITH CARE", "RIGHT SIDE UP", "KEEP DRY", etc, in English and with appropriate international trade practice marks and illustrative marks.
6.4 The following documents shall be enclosed in each package of the Contract Equipment:
A. Two (2) duplicate copies of detailed packing list;
B. Two (2) duplicate copies of quality certificate;
C. One (1) copy of Technical Documentation for relevant Contract Equipment;
D. Two (2) copies of systematic assembling drawings for the machine and parts to be assembled.
6.5 In case of container transportation, the Seller shall examine the conditions of the containers so that only those in good conditions shall be used for delivery of the Contract Equipment. Sufficient shores or chocks shall be provided in order to prevent the Contract Equipment from moving inside the containers. The Seller shall be liable for any damage to the Contract Equipment thus incurred due to the negligence of the Seller.
6.6 If any of the Contract Equipment is damaged or lost due to improper packing and/or inadequate protective measures, the Seller shall be responsible for repair, replacement and/or compensation in accordance with the Contract. If the Contract Equipment are mistransported due to mistake or ambiguousness in package and/or shipping marks, the Seller shall bear additional expenses thus incurred.
6.7 The Seller shall use wooden package free from any insect infestation. Should insect infestation be found in quarantine inspection, the Seller shall bear the cost incurred in fumigation or replacement of package at the Port of Unloading.
Chapter 7 Technical Documentation
7.1 The contents of the Technical Documentation are specified in Appendix 2,3,8 and 9. The Technical Documentation shall be drafted in metric system and be stated and explained in English, unless otherwise provided.
7.2 The Technical Documentation provided by the Seller shall be properly packed to make them withstand numerous handling, long-distance transportation and to be protected against damages from moisture and rain. The surface of each package shall be painted with the following items:
A. Contract No.;
B. Consignee;
C. Destination;
D. Shipping Mark;
E. Gross weight;
F. Case No./Bale No.
Two (2) copies of list indicating series No., code, title and pages of documentation shall be enclosed in each parcel of the Technical Documentation.
7.3 The Technical Documentation provided by the Seller shall be delivered DDU the Destination Airport in lots within _____ months after the Effective Date of the Contract.
7.4 Within _____ hours after dispatching the Technical Documentation, the Seller shall notify the Buyer by fax of the dispatching date, number of parcels, flight No., and approximate gross weight, and submit to the Buyer the following documents:
A. Two (2) copies of airway bill (marked with the Contract number and the consignee);
B. Two (2) copies of detailed list of Technical Documentation. In case of any shortage, loss or damage in respect of the Technical Documentation, the Seller shall effect promptly supplementary delivery of any omitted, lost or damaged part without any charge upon receipt of the Buyer's notification.
7.5 The date stamped on the airway bill by the Destination Airport shall be deemed as the actual delivery date of the Technical Documentation.
7.6 The Seller shall deliver the Technical Documentation in accordance with the schedule specified in Appendix 2 and 8. Should the Seller fail to deliver any lot of the Technical Documentation or any part thereof in due time, the Seller shall be penalized for late delivery at the following rates:
A. For the first week, ____ percent of the value of the Technical Documentation per week;
B. From the second to the fourth week, _____ percent of the value of theTechnical Documentation per week;
C. From the fifth week, _____ percent of the value of the Technical Documentation per week.
Odd days less than one (1) weed shall be counted as one week for calculating the liquidated. The aggregated value of the Technical Documentation specified in Article 3.2.2 and Article 3.2.3 including the license fee and design fee shall be taken as the basis for calculating the liquidated damage, despite any portion of Technical Documentation is involved in late delivery. The total amount of liquidated damages paid by the Seller for late delivery of Technical Documentation shall not exceed _____ percent of the Contract Price. The payment of liquidated damages by the Seller shall not release the Seller from its obligation to deliver the delayed Technical Documentation.
Chapter 8 Design and Design Liaison
8.1 Both parties shall carry out and complete design and design liaison in accordance with Appendix 8.
8.2 The scope of design undertaken by either party and submission the Technical Documentation are specified in Appendix8. The documentation submitted by the Buyer shall be taken as the design basis.
8.3 The contents, time schedule, place, cost, the number and qualification of participants of the design liaison meetings are specified in Appendix 8.
8.3.1 Within ______ months from the Effective Date of the Contract, the Seller shall, at its own cost, dispatch its technical personnel to participate in the kick-off meeting and submit to the Buyer before the meeting the relevant documentation including the standards and codes specified in Appendix 9. The Buyer is entitled to put forward its opinions on the submitted standards and codes. The standards and codes shall be decided on the kick-off meeting and be taken as the design basis. During the kick-off meeting, both parties shall sign the kick-off meeting protocol, which shall be taken as the basis of basic design.
8.5 Within _____ months from the Effective Date of the Contract, the Buyer shall, in accordance with Appendix 8, dispatch its technical personnel to the Seller's office to participate in the basic design review meeting. The Seller shall submit the basic design documentation to the Buyer before the meeting as per Appendix 8. The Buyer is entitled to put forward its opinions on the submitted documentation. The Seller shall take the Buyer's opinions into consideration and modify its design accordingly. The basic design review meeting protocol shall be signed by both parties through consultation and shall be taken as the basis of detailed design.
8.6 Within _____ months from the Effective Date of the Contract, the Buyer shall dispatch its technical personnel to the Seller's office to participate in the detailed design review meeting during which the detailed design review meeting protocol shall be signed by both parties.
8.7 During the design liaison meetings, the Seller shall assist the Buyer's personnel in visiting the factories manufacturing Contract Equipment and answer the questions put forward by the Buyer in connection with the technical matters of the Contract plant.
Chapter 9 Standards and Inspection
9.1 The Seller shall carry out design, selection of materials, manufacture and inspection of the Contract Equipment according to the protocols signed by two parties during design liaison and existing standards and codes of the Seller's country and/or of the Seller itself, which is specified in Appendix 9.
9.2 The Seller or the manufacturer shall inspect the Contract Equipment and issue the ex-works quality certificates as well as pre-delivery inspection records, all expenses involved shall be for the Seller's account. The ex-works quality certificates and pre-delivery inspection records shall be submitted to the Buyer.
9.3 The Buyer is entitled to send its inspectors to the Seller's and/or manufacturer's countries to inspect the manufacturing process and quality of the main equipment together with the Seller's inspectors.
The Seller shall notify the Buyer of the inspection date _____ month in advance, The Buyer shall confirm whether it will dispatch the inspectors within _____ days upon receipt of such a notice.
9.4 The main equipment shall be assembled in the presence of the Buyer's inspectors. The Buyer's inspectors have the right to attend the meetings related to the quality of the Contract Equipment.
9.5 The Seller shall give full considerations to the opinions put forward by the Buyer s inspectors, and shall take necessary measures at its own costs to eliminate the defect or discrepancy, if any, thus a second inspection shall be conducted by the Seller for its own account.
In case the Buyer'inspectors are not present in due time not due to the Seller's fault, the Seller has the right to carry out the assembly and the inspection on its own.
9.6 The pre-delivery inspection shall not substitute the inspection of the Contract Equipment at the port of Unloading and/or the Job Site and shall not release the Seller from its guarantee obligations as further specified in the Contract.
9.7 The open-package inspection on the Contract Equipment shall be performed by the Inspection Authorities at the Job Site. The Buyer shall inform the Seller the date of the inspection____ days before the open-package inspection. The Seller may send its representatives at its own expenses to be present in the inspection. If the Seller's representatives are not present in the open-package inspection, the Inspection Authorities have the right to conduct the inspection in their absence.
Should any shortage, defect, damage or other non-conformity with the Contract be found with the delivered Contract Equipment during the open-package inspection, the inspection certificate issued by the Inspection Authorities shall be taken by the Buyer as effective evidence to claim against the Seller
9.8 In case of container transportation, the opening and return of the containers shall not be regarded as the open-package inspection.
9.9 Should Contract Equipment be found defective before the expiration of Warranty Period for any reason, including but not limited to latent defect or the use of unsuitable materials, the Buyer has the right to apply to the Inspection Authorities for inspection and claim against the Seller on the strength of the inspection certificate.
9.10 If the standards and codes specified in the Technical Documentation are found incomplete, the Inspection Authorities will, at their discretion, carry out the inspection according to the current standards of the Buyer's country and/or other standards considered suitable by the Inspection Authorities.