Terms and Conditions

General Conditions for Sale of Spare Parts

1. Contract and Effective Date

The contract (“Contract”) between FLSmidth (“FLS”) and the buyer identified in the OA (“Buyer”) consists of these “General Conditions for Sale of Spare Parts – 2018” (“General Conditions”) and FLS’s written order acknowledgement to the Buyer (“OA”) and any other annexes expressly listed in the OA (“Annexes”).

In the event of any discrepancy, ambiguity or conflict between these General Conditions and the OA (excluding Annexes), the OA (excluding Annexes) shall prevail over these General Conditions. In the event of any discrepancy, ambiguity or conflict between these General Conditions and the Annexes, these General Conditions shall prevail over the Annexes.

The Contract may be amended only by written agreement signed by authorized representatives of FLS and the Buyer.

The Contract sets out FLS’s and the Buyer’s final agreement and supersedes, replaces and voids all prior understandings and agreements between the Parties concerning the subject matters of the Contract.

The Contract and any change or amendment thereto, as well as any notice, communication and correspondence or any other document related to or deriving out of the Contract, shall be written in the English language. Any notice, communication and correspondence between the parties shall be sent to the addresses set out in the OA.

The Buyer shall obtain all permits, licenses and approvals required for the execution of the Contract and pay all governmental and public duties, charges and fees in due consideration to the Contract and applicable law.

The Contract becomes effective and in force on the date when the OA is issued by FLS (“Effective Date”), except that if according to the OA an advance payment shall be paid by the Buyer to FLS, the Effective Date shall be the date when the advance payment has been received by FLS. If the Effective Date has not occurred within 45 Days after the date of FLS’s issuance of the OA, the Contract shall become null and void, unless FLS (in its sole discretion) has granted an extension of time for the Buyer’s payment of the advance payment.

2. Equipment

FLS shall deliver the equipment set out in the OA (“Equipment”) to the Buyer in accordance with the Incoterms trade term and to the place(s) set out in the OA. The Equipment shall be packed and marked in accordance with FLS’s normal packing and marking standards. Transhipment, part shipment and loading on deck is allowed.

The weight of the Equipment as may be set out in the OA is indicative and non-binding and weight changes shall not affect the Price or the terms of the Contract or entitle the Buyer to raise any claims against FLS. 

The risk for the Equipment or any part thereof shall pass from FLS to the Buyer in accordance with the Incoterms trade term set out in the OA. The ownership of the Equipment shall pass from FLS to the Buyer when the Price has been received by FLS in full. 

The Buyer shall in due time provide FLS with any information, instructions, documents and drawings, which FLS shall use to manufacture, procure or deliver the Equipment or to otherwise perform its obligations under the Contract or as may otherwise be reasonably requested by FLS. The Buyer warrants that such information, instructions, documents and drawings provided by the Buyer are correct, accurate and complete.

3. Delivery Time

FLS shall deliver the Equipment within the delivery time(s) (“Delivery Time”) set out in the OA. The Delivery Time shall be calculated from the Effective Date.

If FLS is delayed with the performance of any of its obligations under the Contract due to reasons for which FLS is not responsible, FLS is entitled to extend the Delivery Time with a period equal to the delay, and any costs incurred by FLS as a result of the delay shall be paid on demand by the Buyer to FLS.

If FLS fails to deliver the Equipment in accordance with the Delivery Time, and the reason for such delay is attributable to FLS, the Buyer is entitled to collect liquidated damages for delay from FLS in the amount of 0.25% of the value according to the Contract of the delayed part of the Equipment per full week of delay up to a maximum aggregate sum of 3% of the Price. Liquidated damages hereunder shall be the Buyer’s sole and exclusive remedy for any delay by FLS with its obligations under the Contract.

The parties shall at all times during the performance of their obligations under the Contract use their reasonable endeavours to minimize any delay.

4. Price and Payment Terms

The price for the Equipment (“Price”) is out in the OA. The Buyer shall pay the Price to FLS in accordance with the payment terms in the OA. The Buyer shall pay all bank fees. The Buyer shall pay all local taxes, charges, duties and fees in the Buyer’s country.

If, due to reasons not attributable to FLS, the Equipment or part thereof cannot be shipped or delivered in accordance with the Contract within 14 days after FLS’s notice of readiness (i) FLS is entitled to store the Equipment in a warehouse or similar facility of FLS’s choice at the cost (including VAT imposed on the Equipment in the country of storage, if any) and risk of the Buyer, and (ii) the Equipment shall be considered delivered under the Contract at the time of delivery to the warehouse or similar facility, and (iii) the Buyer shall pay to FLS the Price for the stored Equipment against a warehouse receipt where after title to the stored Equipment shall pass to the Buyer.

If the Buyer fails to make any payment under the Contract by the due date for such payment, FLS may, without prejudice to any other right or remedy that FLS has under the Contract or at law (i) claim and receive interests from the Buyer from the due date and until the full amount is received by FLS at a rate of 8% per annum, and (ii) suspend the Contract with immediate effect, and (iii) terminate the Contract if the payment delay exceeds 45 days. 

The Buyer shall make all payments due under the Contract without any withholding or deduction by way of set-off, counterclaim, discount or otherwise.

5. Warranty

FLS warrants that the Equipment is free from defects caused by fault in FLS’s design, materials or workmanship in the following period: (i) 12 months from the date when the Equipment or part thereof was delivered under Articles 2 or 4 (as the case may be), or (ii) 18 months from the Effective Date, whichever comes first (“Warranty Period”).

In the event of replacement or major repair by FLS of any part of the Equipment under this Article 5 during the Warranty Period, a new 12-months Warranty Period is granted for the replaced or repaired Equipment, starting on the date of delivery in accordance with the Contract of the replacement Equipment or repair of the defective Equipment. However, the total duration of the Warranty Period for any part of the Equipment cannot be extended to last more than a total of 24 months from the date when the original Warranty Period commenced. 

FLS’s warranty shall not apply if a defect is caused by (i) normal wear and tear, or (ii) failure by the Buyer or others to handle, store, erect, install, commission, test, operate, maintain and/or repair the Equipment properly and under normal conditions and in accordance with the Contract and FLS’s instructions. 

The Buyer shall notify FLS in writing of any defect under this Article 5 within (i) 10 days after the date when the defect was or should reasonably have been discovered by the Buyer, and (ii) the expiry of the Warranty Period.

Any defect for which FLS is responsible under this Article 5 and of which the Buyer has notified FLS in accordance with this Article 5 shall within reasonable be remedied by FLS, in its sole discretion, by repair and/or replacement (FOB any port at FLS’s choice in accordance with the latest Incoterms). 

6. Limitation of Liability

The Contract sets forth the sole and exclusive remedies available to the parties, and neither party has granted or assumed any other warranties, guarantees, duties, liabilities or obligations, either express, implied, statutory, at law or in equity.

Notwithstanding anything in the Contract to the contrary, neither party shall be liable to the other for any special, incidental, indirect or consequential costs, losses or damages or for any loss of profit, loss of use, loss of business opportunities, loss of contracts, loss of customers or damage to reputation, whether or not such costs, losses or damages are based in contract, warranty, tort (including negligence or strict liability), indemnity or otherwise, and each party hereby releases the other party and the respective agents and employees of each from all such liability.

FLS’s maximum aggregate liability for all costs, losses and damages arising under or resulting from the Contract, whether such liability arises from any one or more claims or actions for breach of contract, tort, delayed delivery, non-performance, warranty, product liability, indemnity or strict liability shall, unless otherwise specifically limited by the terms hereof, be limited to 10% of the Price, and all of FLS’s liability under the Contract shall terminate upon the expiry of the Warranty Period.

7. Assignment and Sourcing

Neither party shall assign the Contract or any part thereof or any or all of its obligations under the Contract to any third party without the other party’s prior written consent. FLS may source the Equipment from any sub-suppliers of its choice.

8. Variation

The Buyer may request a variation to the Equipment. The Buyer’s request for variation must be in writing and signed by the Buyer’s representative and must be received by FLS before FLS has ordered the relevant Equipment from its sub-supplier. FLS shall inform the Buyer of the impact on (i) Price, (ii) Delivery Time, and (iii) other material consequences of the variation as soon as reasonably practicable. FLS shall not proceed with the variation until the parties have signed an agreement in respect to the variation and its consequences, including the consequences set out in points (i) to (iii) above.

9. IPR and Confidentiality

The Equipment and any documents and information supplied at any time and in any form by or on behalf of FLS under or in relation to the Contract (i) shall be and remain the sole intellectual property of FLS, and (ii) shall be used by the Buyer only for the purposes set out in the Contract. The Buyer may not make or have made copies of the Equipment.

The Contract and any documents and information exchanged between the parties under or in relation to the Contract (“Confidential Information”) shall be treated by the receiving party as the strictly confidential property of the disclosing party. No copies (including electronic copies) of the Confidential Information shall (directly or indirectly, fully or partly) be furnished or made available in any way by or on behalf of either party to others without the prior written consent of the other party, unless (and in such case only to the extent) required in order for a party to fulfil its obligations under the Contract.

10. Force Majeure

Neither Party shall be liable to the other, or be deemed to be in breach of the Contract, by reason of any delay in performing, or failure to perform, any of its obligations under the Contract if the delay or failure was beyond that Party's reasonable control (including without limitation fire, flood, explosion, epidemic, riot, civil commotion, any strike, lockout or other industrial action, act of God, war, warlike hostilities or threat of war, terrorist activities, cyber-attack, accidental or malicious damage and any prohibition or restriction by any government or other legal authority, which affects the Contract and which is not in force on the date the Contract was signed by the parties (“Force Majeure”). A Force Majeure event shall not include a party's restrictions on access to financial proceeds or facilities for the financing of its activities and obligations under the Contract.

A party claiming to be unable to perform its obligations under the Contract (either on time or at all) due to a Force Majeure event shall notify in writing the other party of the nature and extent of the circumstances in question as soon as reasonably practicable.

This Article 10 shall cease to apply when the Force Majeure event has ceased to have effect on the performance of the Contract and the party affected shall give notice in writing to the other Party that the Force Majeure event has ceased.

If any circumstance relied on by either party for the purpose of this Article 10 continues for more than 6 months, the Parties shall be entitled to terminate the Contract in accordance with Article 11.

11. Termination

Either party may terminate the Contract by written notice to the other party if any of the following events occur: (i) If a state of Force Majeure continues for more than 6 months after the written notice of such Force Majeure is given by a party under Article 10, or (ii) if the other Party commits a material breach of its obligation under this Contract, or (iii) if either party becomes voluntarily or involuntarily the subject of proceedings under any bankruptcy or insolvency law, or other law or procedure for the relief of financially distressed debtors, or is unable, or admits in writing its inability, to pay its debt as it matures, or takes or suffers any action for its liquidation or dissolution, or has a receiver or liquidator appointed for all or any part of its assets.

Termination of the Contract shall not release the parties from any of its obligations or liabilities, which have accrued under the Contract as per the date of termination and shall not affect any part of the Equipment already delivered.

If FLS terminates the Contract hereunder, the Buyer shall pay to FLS on demand (i) the sum of the Price for Equipment, which has been delivered or which has been completed or which has been ordered from FLS’s sub-supplier, (ii) the costs incurred by FLS as a result of the termination, and (iii) a termination fee of 15% of the Price.

If the Buyer terminates the Contract hereunder, FLS shall pay to the Buyer the documented costs incurred by the Buyer as a result of the termination, provided that FLS has received all sums from the Buyer, which have fallen due from the Buyer to FLS under the Contract.

12. Claims

If a party considers itself entitled to a claim against the other party under the Contract, apart from claims under Article 5, the claiming party shall give written notice to the other party, describing the event or circumstance giving rise to the claim. The notice shall be given as soon as practicable and not later than 28 days after the party became aware or should have become aware of the event or circumstance giving rise to the claim.

As soon as reasonably practicable after the date of the notice given by a party of its intention to make a claim, the claiming party shall submit to the other party full particulars of and the actual amount of its claim (including relevant references to provisions of the Contract) in writing.

Failure by a party to fully comply with the above claims procedure shall constitute a waiver by that party of the relevant claim.

A party establishing or alleging a breach of Contract or a right to be compensated or indemnified by the other party, shall be under an obligation to take all necessary measures to mitigate its costs, losses and damages, provided that the claiming party can do so without unreasonable inconvenience or cost.

13. Export Control

The Buyer warrants that the Equipment is not intended for any use in violation of any existing international or national laws, conventions, regulations and resolutions on export control, trade sanctions or other similar restrictions on purchase, export, re-export, import and use of the Equipment.

If FLS is required to conduct export control checks, the Buyer shall upon FLS’s request provide to FLS without delay all relevant information and documentation regarding the end user, the destination and the intended use of the Equipment, which is required for the FLS to conduct such checks.

14. Governing Law and Arbitration

The Contract and any dispute arising under or out of the Contract shall in all respects be governed by and interpreted in accordance with the substantive laws of Denmark, excluding any conflict of law rules. The United Nations Convention on Contracts for the International Sale of Goods (CISG) shall not apply.

Any dispute or difference arising out of or in connection with the Contract, including disputes regarding its existence, validity or termination or the legal relationships established by the Contract, shall be finally resolved by arbitration, under the Rules of Arbitration of the International Chamber of Commerce, which Rules are deemed to be incorporated by reference into this Contract. The number of arbitrators shall be 3 and the arbitrators shall be and remain fully impartial and independent of the parties and may not have any direct or indirect interest in the Contract. The arbitrators cannot be nationals of or residents in the country of either party. The arbitration shall be conducted in the English language. The seat of the arbitration shall be in Denmark and the arbitration shall be held in Copenhagen.  

The arbitration award shall be final and binding on the parties and shall not be subject to recourse or appeal to any court, administrative or regulative body or to any other arbitration.

15. General

All documentation provided by FLSmidth will be in English only.