General Conditions for Supplies & Services of ShopElect Pvt Ltd


1 General Conditions

1.1 The scope, quality and all terms and conditions for the

supply of any parts, equipment, documentation, or any

erection or commissioning works or other services

(hereinafter called "Works") shall be exclusively defined

by the written declarations of both parties and by the

written provisions of these General Conditions

(hereinafter called "Contract"). General terms and

conditions of the Purchaser shall apply only where

expressly accepted in writing by Shop Elect Pvt. Limited

(hereinafter called "Contractor").The Contract shall be

deemed to have been concluded upon receipt of

Contractor's written acknowledgment stating its

acceptance of the order.

1.2 The items to be considered as Works shall be clearly

brought-out in the price schedule. The prices indicated

by the Contractor will be calculated based on the same.

In case of quantity variation Contractor’s basic

prices/unit rates/delivery will be mutually agreed.

Quantity supplied as per approved drawing, if it

becomes surplus at site and is not installed shall be

Purchaser’s property and will not be taken back by


1.3 For cost estimates, drawings and other documents

(hereinafter called "Documents"), the Contractor

reserves all rights, title and interest in all intellectual

property rights including but not limited to copyright in

the Documents. Such documents may not be made

available to third parties without the prior consent of the

Contractor and they shall, upon request, be immediately

returned to the Contractor if he is not awarded the

Contract. Sentences 1 and 2 shall apply vice versa to

Purchaser's Documents; however, these may be made

available by the Contractor to his sub-contractors and


1.4 Only basic drawings such as block diagrams, SLDs, GA

etc., which would propose the scheme / arrangement in

principle, shall only be submitted for approvals. Detailed

drawings shall be submitted at a later stage only for

record purpose.

1.5 In case of delays in furnishing or change in

specifications/ drawings by the Purchaser beyond the

stipulated or agreed time schedule, the prices as well as

delivery periods shall be subject to changes and shall be

mutually discussed and agreed between the Contractor

and Purchaser.

1.6 Approval received upon submission of drawings will be

considered as Purchaser’s final approval of drawings for

the equipment which will then be strictly manufactured

accordingly. However, the corrected drawings if any will

not be resubmitted to the Purchaser for approval again.

No further changes shall be accepted by the Contractor

without repercussions on the stated delivery and prices.

1.7 If the Works also comprise any software products

including any relating documentation, then as for these

software products and documentation, the Purchaser

shall have only the non-exclusive right to use software in

machine-readable object code form in connection with

the Works and as specified in the operation

documentation, if any, without the source code. Such

embedded software shall be “as is” basis. The

Purchaser may transfer its rights in the software only in

connection with the sale or other transfer of the Works to

a third party. The Purchaser is only allowed to make two

back-up copies of such software with use thereof solely

limited to rights set forth above.

1.8 The Contractor shall be entitled to provide partial Works,

unless the acceptance of the partial Works cannot be



reasonably expected from Purchaser taking into

consideration the interests of both Contractor and


1.9 The obligation to deliver the Works shall be subject to

the condition that the required export licenses are

issued and that no other impediments or restrictions

exist, arising out of national or international foreign trade

and customs requirements or embargos, and arising

from Indian, German, European, United States of

America or any other export control regulations, which

are to be observed.

1.10 The Purchaser shall, at the latest when placing the

order, draw the attention of the Contractor to the

standards and regulations applicable to the Works at the

place of business of the Purchaser and/or the place of


1.11 Unless otherwise provided in the Contract, the Works

comply with the industry standards at the time of the

conclusion of the Contract. If, after the conclusion of the

Contract, regulations or laws or technical standards or

the industry standards change, Purchaser shall place a

change order if the change is mandatory by law and

Contractor shall be entitled to an adequate extension of

time and adjustment of the Contract Price. In all other

cases Purchaser and Contractor may mutually agree on

a change order.

2 Prices and Terms of Payment

2.1 Prices shall be Ex-works (Incoterms 2000) excluding

packing and any and all taxes, duties, cess or imposts

payable under applicable law. Timely payment shall be

the essence of the contract.

2.2 The Purchaser shall pay for supplies:

a) 10% of the total Ex-works contract price as

initial interest free advance payment along

with signature of the Contract,

b) 90% of the total Ex-works contract price along

with 100% taxes and duties etc. and full price

variation amount with 100% taxes and duties

thereon (where applicable) on a pro-rata basis

(as per billing schedule to be furnished by

Contractor) immediately on submission of

commercial invoice, dispatch documents.

2.3 The Purchaser shall pay for erection and/or

commissioning Works or other services:

a) 20% of the price of erection and/or

commissioning or other services as an

advance payment along with technically and

commercially clear order.

b) 70% of the price for erection and/or

commissioning Works or other services on a

pro-rata basis.

c) 10% on successful completion of erection

and/or commissioning or other services

against 10 % of the price for erection and/or

commissioning Works or other services as

Performance Bank Guarantee valid till end of

Defect Liability as per clause 13.2.

However if erection is delayed for more than 90 days or

commissioning is delayed for more than 60 days, due to

reasons not attributable to the Contractor, this payment

shall be released to the Contractor immediately against

submission of Performance Bank Guarantee for the

value as agreed.




2.4 If the Contractor has undertaken the erection and/or

commissioning, the Purchaser shall bear all required

incidental costs including but not limited to travel

expenses and daily allowances in addition to the agreed

Contract price unless otherwise agreed.

2.5 The quoted price includes:

a) services of Purchaser personnel, traveling

expenses to site and back after completion of

their assignment, local accommodation,

b) local labour, transportation, hire charges;

c) cost of consumable materials e.g. welding rods,

gas etc;

d) Workmen’s Compensation, medical aid for

Personnel employed by the Contractor;

e) Watch and ward for site office and site stores;


f) co-ordination, drawings and technical

documentation, necessary for the Purchaser to

obtain statutory approvals.

2.6 Measurements for actual Work done shall be taken

jointly on monthly basis. Purchaser shall approve the

measurement sheets within 7 days of submission,

enabling timely submission invoices by the Contractor.

The final measurements shall be approved by the

Purchaser within 15 days from the date of

commissioning, failing which, Purchaser shall release

the outstanding payment.

2.7 Payments shall be made free of charge to the bank

account or payment office notified by the Contractor.

2.8 The Purchaser may set off only those claims that are

undisputed or have been finally determined in a legally

binding manner and which are solely connected with this


2.9 Unless provided otherwise in writing between the

parties, the invoices shall be due for payment

immediately and shall be settled no later than on the

30th day counting from the date of invoice, without any

cash discount or other deduction allowed. If the

Purchaser is in default with respect to the agreed terms

of payment, he shall be liable, without reminder, to pay

default interest, from the 31st day counting from the

date of the invoice, at a rate exceeding by 4 % the

current base rate of interest issued by the State Bank of


2.10 The quoted price is subject to price variation clause as

per IEEMA regulations. The Contractor reserves the

right to adjust the prices in case the wage rates or the

raw material prices vary between the submission of the

tender and the contractually agreed performance. In

such case, the Contractor shall be entitled to an

adequate price adjustment.

2.11 If advance payment or the contractually agreed

securities are not provided in accordance with the terms

of the Contract, the Contractor shall be entitled to

adhere to or to terminate the Contract and shall in both

cases be entitled to claim damages.

3 Taxes

3.1 The prices are exclusive of  VAT, Sales

Tax, Service Tax (i.e. central and / or state sales tax and

/or value added tax and /or Works Contract Sales Tax

and / or Turnover Tax and / or Additional Tax and / or

surcharge commonly known as sales tax, recovery

whereof from Purchasers is not prohibited under the

provisions of the relevant law), and / or any other

Central and / or Local Tax and / or Surcharge of any

kind, which if levied will be charged extra. Purchaser

agrees to pay or reimburse Contractor for any taxes,


duties, cess or imposts, as applicable at time of delivery

or as may be legislated subsequently and applicable at

time of delivery, which Contractor or his sub-contractors

or sub-suppliers are or may be required to pay to the

concerned Tax authorities.

3.2 Octroi (if applicable) and any other taxes and duties

(including customs duty), shall be paid extra by the

Purchaser at actual at the rates prevailing at the time of

delivery. Exchange rate variation, if any, shall be to the

Purchaser’s account.

3.3 For the Contractor’s own manufactured items, the Sales

Tax (VAT) / Central Sales Tax is computed as per the

prevailing full or concessional or nil sales tax rates as

may be applicable, depending upon the agreement of

the Purchaser to furnish the relevant and appropriate

concessional / exemption declaration form, prescribed

by the concerned sales tax authorities, to be furnished

by the Purchaser.

3.4 For the inter-State bought-out items, Contractor has

considered the relevant transaction to be effected as a

second stage inter-State sale of transit subject to

Purchaser’s furnishing the mandatory and appropriate

Central Sales Tax form prescribed by the concerned

sales tax authority. For such transactions, the said

second stage inter-State sale in transit will be effected

by transfer of documents of title to the goods while the

said goods are in transit from one State to another, as

envisaged u/s.6(2) of the CST Act, 1956.

3.5 For sales which are second stage inter-State sales

(covered by exemption u/s 6(2) of Central Sales Tax

Act, 1956) no Central Sales Tax will be charged subject

to Purchaser furnishing a valid Central Sales Tax

declaration in Form C . In absence of such a

declaration, CST at full rates applicable to the sale of

the relevant goods will be charged extra. For all such

second stage sales, for which the requisite Forms C are

furnished by Purchaser, the prices shall be enhanced by

the like percentage at which Central Sales Tax is levied

at the time of delivery or sales of such goods supported

by C Forms. It should however be noted in this

connection that this amount of price enhancement (even

though the percentage of enhancement shall always be

identical with the current central sales tax rate for sale

on C Forms) does not represent collection of Central

Sales Tax or any amount by way of tax.

3.6 For the erection work, commissioning work or for the

rendering of other services awarded to the Contractor,

the central Service Tax and / or the local State VAT

(works contract tax) as may be applicable shall be levied

and payable extra by the Purchaser.

3.7 The lump sum excise duty and sales tax amount shown

is indicative only. The excise duty and sales tax shall be

reimbursed at actual against submission of dispatch

documents and invoices.

3.8 In case there is a change in the rates of any taxes,

duties, levies or if new taxes, duties or levies are

initiated by the Government / local bodies, then the

same will be reimbursed by the Purchaser.

4 Transport & Insurance

4.1 The prices are quoted on Ex-works basis for supplies.

Transport charges shall be to the Purchaser’s account.

The dispatch of the Contractor’s equipment shall be

made by Railway Transport, Road transport or Air

transport, as the case may be, for which the Contractor

would engage Contractor’s approved transport





4.2 Insurance shall be to the Purchaser’s account. The

Contractor would intimate the particulars of the

equipment being dispatched for Purchaser’s information

within 48 hours of dispatch.

5 Retention of Ownership

5.1 Ownership to the Works shall remain with Contractor

until each and every claim against the Purchaser to

which the Contractor is entitled under this business

relationship has been duly satisfied. Upon entering into

the Contract, the Purchaser authorizes the Contractor to

enter or notify reservation of ownership in the required

form in public registers, books or similar records, all in

accordance with relevant national laws, and to fulfill all

corresponding formalities, at Purchaser's costs.

5.2 For the duration of the retention of ownership, the

Purchaser shall be prohibited from giving the Works in

pledge or as security, and resale shall be permissible

only in the ordinary course of business and subject to

the condition that the Purchaser either receives payment

from its customer or retains ownership so that the

property is transferred to the Purchaser's customer only

after fulfillment of his obligation to pay.

5.3 In case of seizure of the Works or similar acts or

interventions by third parties which may result in the

Contractor losing ownership to the Works, the Purchaser

shall inform the Contractor immediately thereof in


5.4 In cases of fundamental non-performance of contractual

obligations by the Purchaser, especially a delay in

payment, the Contractor shall be entitled to take back

the Works. The taking back, the assertion of the

retention of ownership or the seizure of the Works by the

Contractor shall not mean termination of the Contract

and restitution, unless expressly stated by the


6 Time for Delivery and Delay

6.1 The delivery would be made in complete unit or

standard transport sections.

6.2 The delivery indicated above shall be in good faith,

subject to the conditions of this Contract.

6.3 Performance of the Work and fulfillment within the

stipulated time for delivery is subject to the timely receipt

by the Contractor of all documents, necessary permits

and releases, especially of plans to be provided by the

Purchaser, as well as fulfillment of the agreed terms of

payment and other obligations by the Purchaser. To the

extent said conditions are not fulfilled on time, the time

for delivery shall be extended accordingly unless the

Contractor is responsible for the delay.

6.4 If non-performance of the time for delivery is due to

Force Majeure including impediments, accidents or

disturbances, which could not be avoided despite

application of due care the time for delivery shall be

extended for a period necessary to overcome the event

or incident.

6.5 If the Contractor is solely responsible for a delay in

delivery, the Purchaser who can prove that he suffered

a loss from such delay may claim liquidated damages of

0.5 % for every completed week of delay but in no event

shall the aggregate of such compensation exceed a total

of 5 % of the price of those Works which, because of the

delay, could not be put to the intended use.

6.6 Claims of the Purchaser for compensation which exceed

the limits specified in Clause 6.5 shall be excluded in all

cases of delayed delivery. This shall also apply after



expiry of an additional period granted to the Contractor

for delivery of the Works. Purchaser shall only be

entitled to terminate the Contract for delay provided an

adequate extension of time granted to the Contractor

has not resulted in delivery and the aggregate limit

specified in Clause 6.5 is exhausted.

6.7 Any further rights and remedies of the Purchaser than

those as per this Clause 6 based on a delay, in

particular Purchaser's right to claim damages shall be


6.8 If dispatch or delivery is delayed at Purchaser's request

by more than one month after notice was given of the

readiness for dispatch by the Contractor, the Purchaser

may be charged storage costs for each month thereafter

up to the amount of 0.5 % of the Contract price of the

Works but in no event shall the aggregate storage

charges exceed a total of 5% of the total Contract price.

Thereafter, the Contract shall be deemed to be

terminated at the option of the Contractor. The

Contractor shall be free to dispose off the supply and

recover damages from the Purchaser.

7 Inspection and Testing

7.1 For witnessing the tests, the Contractor shall give the

Purchaser 7 days advance notice. The Purchaser shall

confirm the date within two days of receipt of the

Contractor’s inspection call.

7.2 The cost of deputation of the Purchaser’s representative

i.e. lodging, boarding, allowance etc., shall be borne by

the Purchaser. The Contractor shall arrange for

necessary set up in the shop floor for witnessing the

tests by Purchaser’s inspector/s at the Contractor’s cost.

7.3 Only routine tests as per relevant standards shall be

demonstrated for inspection, unless otherwise agreed.

Discrepancies and/or non-compliance observed, if any,

shall be clarified and/or resolved mutually, as the case

may be.

7.4 The Purchaser’s representative shall inspect the Works

and shall immediately notify the Contractor in writing of

any defect. If the Purchaser’s representative does not

notify the Contractor in writing, the Works are deemed to

have been accepted with respect to such defects.

7.5 In case the Purchaser’s representative does not come to

witness the test on the day mutually agreed or even

after inspection and resolving of discrepancies and/or

non-compliance observed, if any does not issue a

Dispatch clearance certificate, it would be construed that

the Purchaser has accepted and approved the tests,

and standard routine test report shall be furnished to the

Purchaser for their information and records, wherever


7.6 Dispatch clearance certificate shall be given by the

Purchaser within 5 days of inspection.

8 Transfer of Risk

8.1 The transfer of risk is deemed to have taken place as

soon as individual equipment is delivered Ex-works

(Incoterms 2000) or any other Incoterms if otherwise

agreed between the Parties.

8.2 In the event the Works delivered by Contractor are

erected and commissioned by Purchaser or Purchaser’s

subcontractors, and irrespective of whether such

erection is supervised by Contractor or whether

Contractor advises on the assembly or installation of the

Work, and/or whether the commissioning or




performance tests are carried out by the Contractor or

with the assistance of the Contractor, the risk of

accidental loss and damage to the Works shall transfer

in accordance with the applicable law, in any case at the

latest upon delivery of the Work or any portion thereof

pursuant to Clause 10 or its acceptance pursuant to

Clause 11.

8.3 If the dispatch, the beginning or completion of erection

and commissioning, the taking over of Purchaser's own

service or the trial run is delayed for reasons within the

Purchaser's responsibility, or if the Purchaser has failed

for other reasons to accept delivery, the risk of loss shall

pass to the Purchaser on the date when it would have

passed but for such failure of the Purchaser.

9 Purchaser’s Obligation

Unless otherwise agreed in writing, assembly,

installation, commissioning and testing of the Work or

any portion thereof outside Contractor’s own workshop

or factory shall be subject to the following provisions:

9.1 The Purchaser shall provide at his own expense and in a

timely manner:

a) necessary access to site,

b) all earth-moving and construction work and

other ancillary services not specific to the

Contractor's trade as well as the necessary

skilled and unskilled labor, materials and tools,

c) the equipment and materials necessary for

assembly, installation and commissioning such

as scaffolding, lifting equipment etc.,

d) electrical and other energy including but not

limited to fuels and lubricants as may be

required and water at the point of use,

connections, heating and lighting,

e) necessary infrastructure including but not

limited to suitable, dry and lockable rooms of

sufficient size at the site for storage of

machine parts, apparatus, materials, tools etc.

and adequate working and recreation rooms

for the assembly personnel including

appropriate sanitary facilities. Furthermore, the

Purchaser shall take all measures he would

take for the protection of his own property to

safeguard the property of the Contractor and

of the Contractor's personnel,

f) protective clothing and protective devices

which are needed because of particular

conditions on the site,

g) all accident prevention measures necessary to

protect both the Contractor as well as

Contractor's personnel,

h) all health and safety measures required to

protect Contractor’s and its subcontractors’, if

any, personnel on the site.

i) Comprehensive assistance with regard to

obtaining import, export and customs

clearance for personal belongings and good of

Contractor’s and its subcontractors personnel

and of the equipment, tools and goods

required for the Work;

j) Comprehensive assistance to Contractor’s and

its subcontractor’s personnel for obtaining

visas, work and residence permits to the

extent required for the carrying out of the Work

as well as with regard to any permits required

for leaving the country

9.2 Before the start of the Work, the Purchaser shall

a) make available at his own cost and expense all

necessary information concerning the location,

including but not limited to concealed electric,

power, gas and water lines or of similar


last carrier with a copy to the Contractor of any damage

caused to the Works by the transport or objections

regarding forwarding or transport with sufficient

documentary evidences.

11 Acceptance

11.1 Notwithstanding Clause 10.1, Purchaser shall accept the

Work including engineering, factory tests, erection,

assembly, commissioning and testing separately upon

their respective completion.

11.2 In the event the Work comprises the delivery of

hardware, its complete assembly and erection as well as

the commissioning of the Work outside Contractor’s own

workshop or factory the Work or said portion thereof

shall not be deemed to be completed until accepted by

the Purchaser.

11.3 Notwithstanding Clauses 11.1 and 11.2, acceptance of

Work comprising services including but not limited to

scheduled outage services or maintenance services,

irrespective of whether or not such services comprise

the installation or provision of hardware or software,

shall be deemed to be given after performance of the

respective services.

11.4 If, after completion, Contractor requests acceptance of

the Work or a portion thereof, Purchaser shall provide

such acceptance in written form within two (2) weeks of

Contractor's request. Failing Contractor’s receipt thereof

and in the time frame indicated the Work shall be

deemed to be accepted. The same shall apply if

Purchaser refuses acceptance, but does not state the

reasons therefore in writing within two (2) weeks after

receipt of Contractor’s request. The reasons to be stated

by the Purchaser shall at least comprise what Work the

Purchaser deems not to have been finished or

substantially defective and why the Purchaser is of such

opinion. Furthermore, deemed acceptance shall occur if

the Work or any portion thereof is put to use by


11.5 Purchaser shall not be entitled to refuse acceptance in

case of (a) defects which only insignificantly impair the

use of the respective Work, (b) minor deviations of the

Work from the specification of the Work, (c) defective

installation or erection not carried out by Contractor, or

(d) inappropriate foundation or particular external

influences not explicitly assumed to have an impact on

the Work (e) part identification numbers of the Works or

parts thereof differs from those of the parts originally

installed or ordered due to technical developments.

11.6 As long as a defect of the Work is capable to be

remedied and Contractor has not definitely refuse to

undertake the required remedial efforts, Purchaser shall

not be entitled to refuse acceptance of the Work.

11.7 If Work or any portion thereof is ready for delivery or

performance and cannot be delivered or performed due

to reasons beyond Contractor's control, acceptance

shall be deemed to have taken place upon Contractor's

notification to the Purchaser of readiness for delivery or


11.8 In the event performance tests, functional tests, and/or

trial runs are to be carried out by Contractor after the

Work has been accepted pursuant to Clauses 10 and/or

11.3 11.4 and 11.67, any acceptance already granted to

the Works shall not be affected by any failure to pass

said tests.

11.9 All costs and expenses for activities of Purchaser or any

third party with regard to inspections, tests, approvals,

acceptance procedures and the like shall be borne by




b) as well as inform about all required data

concerning static and sub-surface conditions of

the site, environmental regulations, waste,

contamination and presence of asbestos, and

c) provide all necessary materials and equipment

to start work at the site and carry out all

preparations to such a point that the assembly,

installation, commissioning or testing can be

started as agreed and carried out without

interruption. Access roads and the site shall be

paved and clear and prepared for assembly,

installation, commissioning or testing of the


9.3 In case there is any variation in the soil condition or the

parameters mentioned in Clause 9.2 by Purchaser ,

then any liabilities arising out of the same and any

additional costs incurred by the Contractor for

completion the Work will be payable by the Purchaser.

In the event of any suspected presence of asbestos, the

Contractor shall inform the lower limit values and

Purchaser shall be responsible to provide an asbestosfree

environment in accordance of the Contractor’s limit

values. Contractor reserves the right for any suspension

/ termination in cases of any violating conditions or the

parameters and shall not be liable for the same.

9.4 If the Work is delayed by circumstances for which the

Contractor is not responsible, the Contractor shall be

entitled to an equitable adjustment in schedule, price

and other pertinent conditions of the Contract.

9.5 Purchaser acknowledges that the performance of the

Work at the site, if any, may involve the generation of

hazardous waste as such term is defined in the

applicable law (hereinafter referred to as “Hazardous

Waste”). In the event that Work needs to be performed

on site or close to the site Purchaser shall at its expense

furnish Contractor with containers, which meet all

relevant legal and/or regulatory requirements for

Hazardous Waste use and shall designate a waste

storage facility at the site where such containers are to

be placed by Contractor. Purchaser shall handle, store

and dispose of Hazardous Waste in accordance with

applicable law(s).

9.6 Purchaser shall indemnify Contractor and his

subcontractors and hold harmless from and against any

claims, losses or damages any employee of Contractor

or its subcontractors or any other third party may

demand from Contractor or his subcontractor and arising

out of the realization of any Purchaser Health or Safety

Risks or the disposal of any waste Purchaser is

responsible for.

9.7 The Purchaser shall certify to the Contractor at weekly

intervals the hours worked by the Contractor's assembly

personnel and shall promptly confirm in writing the

completion of the Work.

9.8 If, after completion, the Contractor requests acceptance

of the Works, it shall be carried out by the Purchaser

within two weeks of the Contractor's request, failing

which the Works shall be deemed to be accepted.

Acceptance is also deemed to have taken place if the

Works are put to use by the Purchaser.

10 Taking Delivery

10.1 Notwithstanding Clauses 11 and 13, the Purchaser shall

be entitled to refuse acceptance of delivery only if the

Works are visibly and substantially defective, and the

Purchaser provides the Contractor specific written notice

thereof within 3 days of delivery of such Works.

10.2 Upon taking delivery or receipt of shipping documents,

the Purchaser shall check the Works and shall notify the

12 Change Order

12.1 If the Purchaser desires any variations in any part of the

Works, notice in writing shall be given to the Contractor

by the Purchaser, before taking over so as to enable the

Contractor to make necessary arrangements and/or

procedures, and to enable the Purchaser and the

Contractor to reach the mutual written consent, and in

case the supplies have been shipped, the equipment is

already manufactured or in the course of manufacture,

or any matter done or drawings or patterns made that

require to be altered, a reasonable sum to be mutually

agreed on in respect thereof shall be paid by the


12.2 Purchaser shall notify Contractor of the nature and form

of the requested variation. After having received a

variation notice, Contractor shall submit to Purchaser

within reasonable time:

(a) a description of work, if any, to be performed

and a time-schedule for its execution, and

(b) Contractor’s proposal for any necessary

modifications to time-schedule or to any of

Contractor’s obligations under the Contract,


(c) Contractor’s proposals for adjustment to the

Contract Price.

12.3 If Purchaser wishes that the requested variation shall be

carried out, Purchaser and Contractor shall agree upon

a variation order as amended to the Contract, clearly

identifying the work to be performed, the adjustment of

price and the extension of time and as the case maybe,

the adjustment of other obligations of Contractor under

the Contract.

12.4 All extra costs due to variations shall be paid by the

Purchaser and such amount as agreed upon.

13 Defects Liability

The Contractor shall be liable to the Purchaser for only

for the defects in design, material and workmanship

including any non-compliance with express warranties or

the failure of the Works to meet guarantees as follows:

13.1 Upon written request of the Purchaser, the Contractor

shall at his option, repair any defect or replace any

Works or re-perform any services which turn out to be

defective within the defects liability period for any defect,

which is due to circumstances that existed before the

transfer of risk occurred.

13.2 The defects liability period shall be 12 months from the

earlier of the: (a) date of transfer of risk of the Work to

the Purchaser or (b) date of completion of the

respective Work, in the event the Work are erected and

commissioned by the Contractor under the Contract,

outside Contractor’s own workshop or factory.

13.3 The Purchaser shall immediately inspect the Works and

shall immediately notify the Contractor in writing of any

defects. If the Purchaser does not notify the Contractor

in writing, the Works are deemed to have been accepted

with respect to such defects.

13.4 The Purchaser may withhold payments on account of

defects only if the legitimacy of the asserted defects

liability claim is established by the Purchaser beyond

reasonable doubt.

13.5 Contractor shall be given adequate time and opportunity

to remedy the defect. For this purpose, the Purchaser

shall grant the Contractor working access to the non




conforming Works, including disassembly and

reassembly, without cost to the Contractor.

13.6 If an adequate extension granted to the Contractor

expires without the defect being remedied, the

Purchaser shall have the right to a reduction of the

Contract price or, if the portion of the Works which is not

defective is of no use for the Purchaser because of the

continuing defect, to terminate the Contract and obtain


13.7 The Contractor shall not be liable for defects which only

insignificantly impair the use of the respective Supply,

unsubstantial deviations of the Works from the

specification of the Works, natural wear and tear or

damage, arising after the transfer of risk, from faulty or

negligent handling, excessive strain, use of unsuitable

appurtenances, defective installation or erection not

carried out by the Contractor, inappropriate foundation

or particular external influences not explicitly assumed to

impact on the Works under the Contract. The Contractor

shall not be either liable or responsible for the defects in

the Works due to design in so far as it proves that

reasonable diligence, skill and care has been taken to

ensure that the design complies as required for the

Works. Further Contractor shall not be liable for remedy

the defect if the Purchaser fails to prove that it complied

with all the instructions or recommendations contained

in the Operations and Maintenance Manual or other

documentation of the original equipment manufacturer

and the Contractor including but limited to the use of the

Works, in places/areas not defined as suitable in the

said manuals or documentation.

13.8 Contractor shall not be liable if Purchaser or a third party

carries out modifications or repairs.

13.9 Any liability for latent defects shall be hereby expressly

excluded. Contractor grants to the Purchaser a warranty

for repaired or replaced parts for a maximum period of 6

months from the date of completion of such repair

and/or replacement, as the case may be,. However,

such additional warranty period shall not, under any

circumstances, exceed the original warranty period as

per Clause 13.2 by more than six (6) months.

13.10 Any further rights and remedies of the Purchaser as

those as per this Clause 13 based on a defect, in

particular any right to terminate the Contract and obtain

restitution or to claim damages shall be excluded.

13.11 Contractor shall not be liable for installation,

commissioning or remedying any defect in parts or

equipments or services provided by the Purchaser or

third parties, unless Contractor has explicitly undertaken

the repair of such specific defect in the Contract.

14 Intellectual Property Rights and Copyright

14.1 Unless otherwise agreed upon in writing between the

parties, the Contractor shall provide the Works free from

any third party industrial property or copyright, including

but not limited to patents and trade secrets (hereinafter

called "Intellectual Property Rights") in the country

where the job-site is located.

14.2 In the event a third party, because of an infringement of

Intellectual Property Rights by the Works asserts

legitimate claims against the Purchaser, the Contractor

shall be liable to the Purchaser as follows:

a) Contractor shall, at its own option and

expense, either obtain a right to use the

Works, modify the Works so as not to infringe

the Intellectual Property Rights, or replace the

relevant Supply. If this is not reasonably

possible for Contractor, the Purchaser shall be


entitled to terminate the Contract whereupon

the Contractor shall take back the relevant

Supply and refund the price received for such


b) Contractor's aforesaid obligations shall exist

only provided the Purchaser has immediately

notified the Contractor in writing of the claims

asserted by the third party, the Purchaser has

not acknowledged an infringement and all

countermeasures and settlement negotiations

are reserved to the Contractor. If the

Contractor stops using the Works to reduce

the damage or for other important reasons, he

shall make it clear to the third party that the

suspended use does not mean

acknowledgment of an infringement of

Intellectual Property Rights.

14.3 Claims of the Purchaser shall be excluded if he is

responsible for an infringement of Intellectual Property


14.4 Claims of the Purchaser shall also be excluded if the

infringement of Intellectual Property Rights was caused

by specific demands of the Purchaser, by a use of the

Works not foreseeable by the Contractor or by the

Works being altered by the Purchaser or being used

together with products not provided by the Contractor.

14.5 Further rights and remedies of the Purchaser than those

as per this Clause 14 based on an infringement of third

parties' Intellectual Property Rights, in particular the

Purchaser's right to claim damages, shall be excluded.

14.6 The Purchaser may use the plans and drawings

provided by the Contractor only for the intended

purpose. The Purchaser shall not be entitled to use

these plans and drawings for other purposes, especially

not for the reproduction of the Works or parts of the


15 Force Majeure

15.1 If performance of any obligation under the Contract

(other than an obligation of the Purchaser to make

payment) is prevented, restricted or delayed by any act

of God, natural disaster, act or omission of government,

impediments arising out of national or international

foreign trade and customs requirements, embargos,

war, hostilities, acts of terrorism, industrial disputes

(including strike, lockout, go-slow and work to rule

actions) at either party’s premises, job site or elsewhere,

failure or delay in source of supply of materials or

equipment, fire, explosion, sabotage, accident or

breakdown of essential machinery or equipment or

caused by the delay of a sub-supplier (such delay not

being the fault of the Contractor) or by any cause

(whether similar or not to any of the above events)

beyond the reasonable control of the party whose

performance is affected, then that party shall be

excused from and shall not be liable for failure in

performance to the extent of that prevention, restriction

or delay. The party wishing to claim relief by reason of

any of the said circumstances shall notify the other party

in writing without delay on the intervention and on the

cessation thereof.

15.2 If performance is delayed for more than 180 days by

any cause referred to in the above sub-clause and the

parties have not agreed upon a revised basis for

continuing the contract at the end of the delay, then

either party may after that period and while the cause of

the non-performance still exists terminate the Contract

by not less than 30 days’ notice in writing to the other

party, in which event the provisions of the Termination

Clause shall apply.



16 Impossibility of Performance / Adaptation of


16.1 If it is impossible for the Contractor to carry out the

Works for reasons for which he is responsible, the

Purchaser shall be entitled to claim damages. The

Purchaser's claim for damages shall be limited to 10 %

of the value of that part of the Works which, owing to the

impossibility, cannot be put to the intended use. The

Purchaser shall have no additional rights in particular,

neither right to rescind from nor to terminate the

Contract nor to reduce the remuneration nor to claim


16.2 In case of changes of the applicable law or other

relevant laws or changes of the engineering standards

having a substantial impact on the content of the Works

or its performance or considerably affecting Contractor's

business or in case of unforeseeable events in the

context of Clause 15.1, the Contract shall be equitably

adapted in order to account for the changed

circumstances, including but not limited to an increase of

the total price agreed for the provision of the Works

under this Contract as at the date of this Contract, or an

adequate extension of time for project execution. Where

this is not economically reasonable, the Contractor shall

have the right to terminate the Contract. Notwithstanding

any other provision in this Contract, the Contractor shall

be entitled to terminate the Contract when a Force

Majeure event has continued for more than 180 days.

Any such termination shall be without liability to the


16.3 If the Contractor wants to make use of this right of

termination, he shall notify the Purchaser in writing

immediately after becoming aware of the significance of

this event. This notification requirement shall apply even

where at first an extension of the time for delivery has

been agreed between the Parties.

17 Limitation of Liability

17.1 The Contractor, to the maximum extent permitted by

applicable law, hereby disclaims all warranties /

guaranties, either express or implied, other than what is

expressly stated in this Contract.

17.2 The Contractor, to the maximum extent permitted by

applicable law, shall not be in any event or under any

circumstances, be liable for any liability arising from

infringement of intellectual property without limitation,

special, incidental, consequential, direct or indirect

damages, for personal injury, loss of business profits,

business interruptions, loss of business information, or

any other pecuniary loss, arising out of the use of or

inability to use the products / equipment / systems.

17.3 The aggregate liability for any or all claims including but

not limited to Liquidated damages and indemnification

shall not exceed 100% of the total amount received by

the Contractor under this Contract or upto Euro 5 Mio,

whichever is lower.

17.4 If Works are to be performed at or delivered to any

location owned or operated by a third party, and in the

event such third party or property owner adjacent to

such location claims damages from Contractor for

damage caused to its plant or property, Purchaser shall

indemnify and hold harmless the Contractor against and

from any liability to said third party in excess of the

limitation of liability of Contractor under this Clause.

17.5 Any and all liability of Contractor under this Contract

shall cease with the expiry of the Defects Liability period

specified in Clause 13.


18 Transfer / Assignment

18.1 The rights and obligations of each Party under this

Contract may not be assigned, novated or otherwise

transferred or directly or indirectly without the prior

written consent of the other Party. Such consent shall

not be unreasonably withheld. Notwithstanding the

aforesaid, Contractor may assign all or part of this

Contract to an affiliated company.

18.2 Prior to the assignment, novation or other transfer to a

third party of any rights and obligations, Purchaser shall

obtain written assurances from its contracting party or,

as the case may be, the transferee with respect to the

limitation of and protection against liability in favour of

Contractor, at least equivalent to the limitation afforded

to Contractor in Clause 17. Purchaser shall indemnify

and hold harmless Contractor against any liabilities

incurred by Contractor in excess of those that would

have been incurred had Purchaser fulfilled its obligation

arising out of this paragraph.

19 Confidentiality

19.1 Any information made available to the

Purchaser by the Contractor in connection with this

Contract shall be treated as confidential. The

Purchaser shall use the information only for the

purposes specified in this Contract. This

confidentiality obligation shall not apply to

information which the Purchaser can demonstrate,

a) is already in the public domain or becomes

available to the public through no breach by

the Purchaser of this confidentiality

undertaking or

b) was in the Purchaser's possession prior to

receipt from the Contractor without a

confidentiality undertaking or

c) has thereafter been legally obtained without

confidentiality obligation from others or

d) is independently developed by the Purchaser

who had no access to the information received


19.2 Purchaser agrees to appropriately instruct its employees

having access to Information of Purchaser's

confidentiality obligations and to duly restrict access of

such information to employees who have a need to

know it in their scope of employment. Purchaser agrees

to carefully protect Contractor’s Information, and to do

this at least with the same degree of care used in

protecting its similar information.

19.3 In the event Contractor has consented to the disclosure

of Information to a third party by Purchaser, Purchaser

shall procure that such third party undertakes to be

bound by the confidentiality obligations imposed on

Purchaser by this Contract and shall indemnify and hold

harmless Contractor from any damage incurred through

the breach of said confidentiality obligation by the third


19.4 The obligations set forth in this Clause 19 shall survive

any termination or expiration of the Contract.

20 Termination / Suspension

20.1 A party shall be entitled to terminate this Contract by

written notice,

a) if any proceeding is instituted against the other

party seeking to adjudicate such party as

bankrupt or insolvent, or if the other party

makes a general assignment for the benefit of




its creditors, or if a receiver is appointed on

account of the insolvency of the other party,

and, in the case of any such proceeding

instituted against the other party (but not by

the other party itself), if such proceeding is not

dismissed within forty-five (45) days of such

filing, or

b) if the other party is insolvent or itself files a

petition seeking to take advantage of any law

relating to bankruptcy, insolvency, winding up

or composition or readjustment of debts.

20.2 In the event any of the following occurs the Contractor

may at its option suspend the provision of its obligations

under this Contract:

a) the Purchaser fails to make payment of any

amount within 30 days after it has become due

and payable, or

b) the Purchaser fails to perform its obligations

necessary for the Contractor to deliver or

complete the Works, or

c) delivery of the Works is prevented by export

restrictions for more than 3 months; or

d) the Purchaser is insolvent or any proceeding

as referred to in Clause 20.1 is instituted

against the Purchaser.

20.3 In the event the Contractor suspends the provision of its

obligations the Purchaser shall pay the Contractor all

additional cost incurred due to such suspension. The

Contractor shall be entitled to take back the Works and

the Purchaser shall be obliged to return the Works. The

taking back, the assertion of the retention of ownership

or of a security interest or the taking possession through

legal right or process of the Works by the Contractor

shall not mean termination of the Contract and

restitution, unless expressly stated by the Contractor.

20.4 Notwithstanding any other provisions of this Contract the

Contractor may terminate a part or the whole Contract

with 30 days written notice to the Purchaser in case the

requirements set forth in Clause 20.2 a), b) or c) are


21 Dispute Settlement / Applicable Law

21.1 This contract shall be governed by and construed in

accordance with the laws of India. The United Nations

Convention on Contracts for the International Sale of

Goods signed in Vienna in 1980 shall not apply.

21.2 If any dispute arises out of this contract (including any

dispute as to its validity, meaning, effect or termination),

the parties shall attempt to come to a reasonable

settlement of the matter but should such dispute not be

settled within six (6) weeks of the original written

notification of dispute the parties shall contemplate, but

not be obliged, to attempt to settle it by alternative

dispute resolution (including mediation). An attempt at

settlement shall be deemed to have failed as soon as on

completion of 6 weeks from the date of notification of

one of the parties to other its intention of settlement of

dispute through alternative dispute resolution.. If an

attempt at settlement has failed, then:

21.2.1 For all the Contract of a value upto INR 50’0

Mio, the dispute shall be exclusively and finally

settled by sole arbitration, who shall be the retired

judge of High Court, under the Arbitration and

Conciliation Act of 1996 and any modifications

thereto and re-enactments thereof from time to time,


21.2.2 for the Contracts of a value exceeding INR

50’0 Mio shall be exclusively and finally resolved by

Arbitration under the LCIA India Arbitration Rules,


which rules are deemed to be incorporated by

reference into this clause. The number of Arbitrators

shall be three (3). Each Party shall appoint one

Arbitrator and the third arbitrator who shall be the

presiding Arbitrator shall be appointed by the

selected two Arbitrators.

21.2.3 In both the aforesaid clauses (21.2.1 and

21.2.2) the seat or place, of Arbitration shall be in

Mumbai. The language to be used in arbitration shall

be English. The arbitration award shall be final and

binding on the parties. The governing law of the

contract shall be the substantive law of India.

21.3 Each party submits to the jurisdiction of courts of

Mumbai for the purposes only of compelling compliance

with the above arbitration provisions and for

enforcement of any arbitration award made in

accordance with the above provisions. Each party

irrevocably and unconditionally waives any objection or

immunity on grounds of sovereignty or otherwise to the

arbitration proceedings and the jurisdiction of any court

in respect of the enforcement of the arbitration award as

above provided.

22 Permits and Approvals

22.1 All licenses / certificates from Government Authorities /

Electricity Board / PWD / other relevant authorities,

authorizing the work to be executed / certified, shall be

procured by the Purchaser.

22.2 Contractor will obtain permits / approvals which are

necessary for completion of the Works. Purchaser will

furnish his Sales Tax (VAT) Road Permits/Way Bills in

the prescribed Form as may be applicable in his State

under the relevant State VAT law, or shall obtain such

Road Permits/Way Bills from his Consignee and furnish

the same for enabling smooth entry of goods into the

State where delivery is to be effected. Unless expressly

stated in this Contract all other permits / approvals are to

be obtained by the Purchaser.

23 Miscellaneous

23.1 Mistakes, unintended gaps and contradictions in the

Contract are to be treated and construed in accordance

with the spirit of this Contract on the basis of mutual trust

and of the mutual interests of both parties.

23.2 In the event of legal invalidity of individual stipulations,

the other parts of this Contract shall remain valid. The

aforesaid shall not apply where compliance with the

terms of this Contract would constitute unacceptable

hardship for either party.

23.3 The validity of the offer shall not be extended unless

otherwise agreed, in writing, by the Contractor.

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