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Explanatory Notes
Standard Terms & Conditions for Purchase of Goods and Equipment In China or UK
These Terms and Conditions are designed for use by a company when placing orders for goods. They are reasonably balanced but biased in favour of the Buyer. They are intended to be used by any company or business which has a regular requirement for purchasing goods and/or equipment. It would be normal for standard Terms and Conditions such as these to be printed and to be submitted with every order or request for a quotation which is issued by the Buyer. Dealing with specific clauses: 1. DEFINITIONS These are self-explanatory and the name of the company using these Conditions will be inserted against the definition "Buyer". 2. ACCEPTANCE OF ORDER This is intended to make it clear that the Buyer's Conditions will apply to the Order once it has been accepted. This is not an easy area and if the Seller, for example, accepts the Order by reference to his own terms and conditions, there could be an argument as to which will prevail unless this matter is satisfactorily resolved and the Buyer makes it clear that the Buyer's Terms & Conditions must prevail. 3. QUALITY & DESCRIPTION This establishes the standard expected from suppliers - goods must not only comply with the specific terms of the Order but they must also be of good commercial quality, fit for purpose etc. and compliant with any legal requirements. 4. INSPECTION & TESTING This may not always be relevant but where the Buyer does inspect Goods in the process of manufacture or assembly, the clause makes it clear that inspection does not relieve the Seller of its obligations. 5. DELIVERY As drafted, this assumes that Goods will be delivered to the Buyer's premises and packaging is the responsibility of the Seller. Under 5.1, Goods must be delivered in accordance with the details in the Order - it is sensible for the Buyer to specify a delivery date in the Order. In 5.3, although the Buyer has the right to inspect, the clause makes it clear that inspection does not constitute acceptance of any defect in the Goods which have been delivered. 6. REJECTION This gives the Buyer the right to reject Goods which do not conform to the Contract requirements and cancel the Contract or demand replacement of the Goods. 7. WARRANTIES This provides for a 12 month period within which any defect will entitle the Buyer to requirement replacement or repair. The precise period may be too short or too long, depending on the circumstances. 8. PAYMENT This clause again refers to the Order which is likely to contain payment terms. if it does not do so, clause 8.1 assumes that Goods will be invoiced on delivery and the Buyer will then have 30 days in which to pay. 9. VARIATIONS If the Buyer wants to vary the terms of the Order, this clause enables him to do so and to require the Seller to provide an estimate which the Buyer is free to accept or reject. 10. INSTALLATION AND SERVICES Where Goods involve installation by the Seller, this clause imposes certain obligations on the Seller with regard to the nature of the working conditions, safety, security etc. 11. RISK AND PROPERTY This provides for ownership in Goods to pass to the Buyer when any payment on account of those Goods has been made. The Seller is also required to mark Goods at that point as being the Buyer's property. This can be relevant if the Seller goes into receivership or bankruptcy before the Goods are delivered, although there may be competing claims and such a situation is never easy to resolve. 12. INDEMNITY Here the Seller must protect the Buyer from third party claims for patent infringements, damage or injury. 13. ASSIGNMENT AND SUBCONTRACTING The Seller is not allowed to transfer the obligations under the contract to a third party but he can subcontract with the Buyer's consent. 14. MISCELLANEOUS This deals with notices and amendments to the Conditions. 15. LAW AND DISPUTES This simply specifies the governing law and jurisdiction in which disputes will be resolved. The Chinese version contains the following text dealing with governing language, governing law and jurisdiction: “1. The governing language of this agreement is Chinese/English/other. 2. This agreement shall be governed by and interpreted in accordance with English/Chinese law. 3a. The parties will negotiate in good faith any dispute arising between them and if they cannot resolve the dispute within 15 days, either party may bring legal proceedings in the courts of [ ]; or 3b. The parties will negotiate in good faith any dispute arising between them and if they cannot resolve the dispute within 15 days, either party may commence arbitration in [Beijing, China/London, England] in accordance with the rules of the [China Arbitration Centre/ .....................]. There will be an arbitration tribunal comprising three arbitrators and the award of the arbitrators will be final.”
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