General Terms and Conditions for Proto-types/Customizing/Functional Modules

As at 08/2015

I. Scope of Application – General – Oral Additional Agreements – Offers
II. Delivery – Date of Delivery – Extension of the Delivery Period – Partial Delivery
III. Force Majeure – Cancellation – Failure of Supplier
IV. Retention of Title
V. Passing of Risk – Incoterms – Transport Insurance
VI. Quality – Suitability
VII. Warranty Claims – Complaint Obligations
VIII. Defects of Title
IX. Industrial Property Rights
X. Liability
XI. Prices – Price Increases
XII. Payment Terms – Set-off – Securities – Assignment
XIII. Obligations in case of resale
XIV. Place of Fulfilment – Place of Jurisdiction – Applicable Law

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I. Scope of Application – General – Oral Additional Agreements – Offers

1. These General Terms and Conditions (hereinafter referred to as "GTC") shall solely apply for the area "customizing", i.e. for the production and delivery of customer-specific samples, prototypes and pre-serial products as well as for the delivery of functional modules (semi-finished products) to the Customer (hereinafter jointly referred to as "Deliveries").

2. Any of our deliveries are subject to the following GTC exclusively. We do not accept conflicting, differing and/or terms and conditions of the Customer not contained in our GTC unless expressly agreed upon in writing. This also applies in case we unreservedly perform Deliveries with knowledge of conflicting, differing conditions or conditions not contained in our GTC.

3. Our GTC shall only apply to entrepreneurs as defined in § 14 German Civil Code (here-inafter referred to as "BGB").

4. Our sales personnel are not authorized to make oral additional agreements.

5. Unless otherwise expressly agreed upon, our offers and quotations are not binding. The order and/or the offer resp. the quotation does not become binding for us until we confirm it in writing or tacitly accept it by performance or issuance of an invoice.

6. All contracts concluded with you are under the condition precedent that the necessary export licenses will be granted resp. there are not conflicting any obstacles due to our position as exporter resp. there are not conflicting any export regulations which must be observed by our suppliers.

7. Illustrations, drawings, calculations and other product-, application- or project-related documents which contain valuable know-how or valuable information remain our sole property and are subject to our copyright even if handed over to the Customer; they may not be reproduced or made available to third parties without our prior written consent.

II. Delivery – Date of Delivery – Extension of the Delivery Period – Partial Delivery

1. Unless otherwise expressly agreed upon, the agreed dates for Deliveries are not fixed deadlines (§ 323 Para. 2 No. 2 BGB, § 376 German Commercial Code (hereinafter re-ferred to as "HGB").

2. The delivery period does not commence until all details are clarified and both parties have agreed on all the conditions of business. The prerequisites for adherence to delivery periods are particularly:

  • All documents which are to be provided by the Customer have reached us on time;
  • All approvals and releases which are to be provided by the Customer have been issued on time;
  • The Customer meets all contractual obligations particularly the payment obligations on time and in full.

3. Unless otherwise expressly agreed upon, the delivery period is considered to have been met if the Delivery has left our plant within the agreed delivery period.

4. The delivery period shall be reasonably extended if

  • the failure to comply with the delivery period is due to force majeure, i.e. an unforeseeable event on which we have no influence and which we are not responsible for (e.g. official actions and orders (irrespective if they are valid or invalid), fires, floods, storms, explosions or other natural disasters, disturbances of operation, labour dis-putes, strikes, lockouts). This shall also apply if force majeure occurs during an undue delay in delivery and if a supplier of us is affected by force majeure;
  • necessary approvals or documentation from third parties which are to be provided by the Customer are not presented in time;
  • the necessary specifications are not made known by the Customer in time.

5. Deliveries may be made in instalments insofar as the Customer can be reasonably ex-pected to accept this. In such a case we are also entitled to invoice such instalments separately.

6. In case the Delivery is delayed at the request of the Customer or due to circumstances for which the Customer is responsible, we are upon demonstration of readiness to ship entitled to charge the Customer the costs resulting from storage but not less than 0.5 % of the invoice amount for each week commenced, but in maximum 10 % of the invoice amount. Both parties may prove that greater, lower or no storage costs have resulted. The statutory rights to withdraw from the contract and to claim damages remain unaffected thereby.

III. Force Majeure – Cancellation – Failure of Supplier

1. If it is impossible for us to perform the Delivery within an appropriate period of time due to force majeure (cf. Section II.4), both parties are entitled to withdraw in full or in part from the contract. The same applies to subsequent impossibility of performance of contract which we are not responsible for. No damages may be claimed for such a withdrawal. If one party intends to withdraw from the contract due to the aforementioned reasons it must inform the other party without delay.

2. We are released from our Delivery obligation if we ourselves are not supplied in time with the correct goods needed to fulfil the contract without any fault on our part.

IV. Retention of Title

1. We reserve title to all the objects of Delivery until complete payment of all claims to us which result from the business connection. This also applies in case the payment for cer-tain Deliveries indicated by the Customer has been made. If the retention of title is linked to special prerequisites or forms in the country of the Customer the Customer is required to notify us accordingly and to ensure fulfilment at its expense.

2. Linkage, blending or processing of the objects of Delivery shall take place on behalf of us as the manufacturer, but without any obligation for us. If (joint) title is terminated due to linkage, blending or processing, it is already now agreed that we shall acquire joint title to the new item in proportion to the value of the Delivery supplied by us compared with the other goods at the time of linkage, blending or processing. The Customer has to store the items of which we have (joint) title for us at no charge to ourselves.

3. Resellers are permitted resale of the objects of Delivery in the course of ordinary business unless revoked. We may revoke this right of resale if (a) the Customer stops payment, (b) the Customer is in delay of payment, or (c) if there are indications for deterioration of property or other facts after conclusion of contract are given that corroborate the belief that our claim is endangered due to a lack of performance by the Customer. For goods in which we have (joint) title, the Customer hereby assigns to us by way of security all claims arising from resale of the objects of Delivery to third parties or from any other cause in law in the sum of the invoice value of the object of Delivery. On demand the Customer is obliged to provide us with written declarations of assignment. The Customer is revocable authorized to collect the assigned claims against the third party in the course of ordinary business in his name. This collection authorization may be revoked by the same reasons as the right of resale.

4. Pledges and transfers by way of security are not permitted. The Customer must inform us without delay of any attachment of property, distraint or any other disposals or interferences by third parties.

5. We undertake at our discretion to release the collateral that we hold upon the request of the Customer insofar as the value thereof exceeds the claim to be secured by more than 20 %.

V. Passing of Risk – Incoterms – Transport Insurance

1. Unless otherwise expressly agreed upon, the Delivery will take place "ex works" (Incoterms 2010) regarding that place indicated in our offer or in our acceptance or if in our offer or our acceptance no place is indicated "ex works" Neuhausen a.d.F., Germany.

2. Unless otherwise expressly agreed upon, the risk of accidental destruction or accidental deterioration of the objects of Delivery passes on to the Customer as soon as the objects of Delivery have been handed over to the person executing the transport, at the latest when the objects of Delivery leave our distribution centre. This also applies if we have to handle with the delivery. If shipment is delayed for reasons the Customer is responsible for, the risk of accidental destruction or accidental deterioration of the objects of Delivery shall pass on to the Customer when they are ready for delivery and the Customer was informed upon.

3. If internationally customary shipping and risk bearing clauses are used in the contract, these are to be interpreted according to the international Rules for Interpretation of Trade Terms (Incoterms 2010).

4. We will provide transport insurance only upon agreement and at the expense of the Customer.

VI. Quality – Suitability

The quality and suitability are regulated exclusively and exhaustively in the technical data sheet or in the instruction manual referring to the respective product, in our order confirmation, in these GTC and in the product informations. Any additional quality and suitability demands are generally excluded.

2. The respective confirmation order does specify the release tests not yet occurred.

3. If the objects of Delivery are customer-specific samples, prototypes and pre-serial products - considering this characteristic - the following shall apply:

  • The technical configuration of the products and the enclosed documentation - if avail-able - are preliminary.
  • The technical data are subject to marginal changes.
  • We are not responsible for the production and the supply of identical products or products identical in construction.
  • The release tests are not yet completed.
  • The product has not yet been released for series production high volume lots.
  • The operation must be conducted with special diligence.
  • Safety guidelines must be observed strictly.
  • In case of problems regarding a product the Customer shall contact without delay the address mentioned in the order confirmation.
  • The products must only be used in a way that in case of failure or breakdown a risk for life and limb, for machines or for other goods of value is excluded.
  • In case of safety-related use there must be made additional arrangements for safety and loss prevention.

4. If the objects of Delivery are functional modules - considering this characteristic - the following shall apply:

  • The operation must be conducted with special diligence.
  • All guidelines, demands and indications contained in the instruction manual and in the technical data sheet must be observed strictly.
  • Safety guidelines must be observed strictly.
  • In case of problems regarding a product the Customer shall contact without delay the address mentioned in the order confirmation.
  • The products must only be used in a way that in case of failure or breakdown a risk for life and limb, for machines or for other goods of value is excluded.
  • In case of safety-related use there must be made additional arrangements for safety and loss prevention.

VII. Warranty Claims – Complaint Obligations

1. We are in agreement that in case of a claim for supplementary performance (subsequent improvement or additional delivery) the most cost-effective alternative shall be chosen, provided that this alternative is not to the detriment of the Customer.

2. Complaints due to incomplete or incorrect Delivery must be made to us in written form immediately but not later than within one week following Delivery (apparent defects) or discovery of the defect by the Customer. Otherwise the assertion of warranty claims is excluded.

3. We do not agree with any restriction of the statutory requirements to the Customer regarding inspection and complaint of goods receivable (including without limitation according to § 377 HGB).

4. Warranty claims are subject to a limitation period of 24 months following transfer of risk. This shall not apply to warranty claims pertaining to products subject to wear (e.g. photoelectric sensors, mechanical sensors, micropulse transducers, magnetically coded position and rotary encoder systems, inductive couplers and accessories which is classified as accessory by us (e.g. cable, connectors, angle brackets etc.), etc.); these warranty claims are subject to a limitation period of 12 months following transfer of risk. The aforementioned provisions shall not apply in cases where §§ 438 Para 1 No. 2, 438 Para 3, 479 Para 1 and 634a Para 1 No. 2 BGB prescribe longer limitation periods and in cases of a liability for damage from injury to life, body or health as well as in cases of a liability for damage arising from an intentional or grossly negligent breach of duty.

5. If a certain number of operations or switching cycles is agreed for a product this agreement is only valid until the limitation periods described in Section VII.4 above are expired. If the agreed number of operations or switching cycles of a product is reached prior to the expiration of the limitation periods described in Section VII.4 above all claims resulting from such an agreement cease with immediate effect. The agreement of a certain number of operations or switching cycles is only valid if the product is used under the environmental conditions described in the appropriate technical data sheet or in the appropriate instruction manual.

6. Warranty claims are excluded among other things in cases of:

  • failure of inspection and complaint of goods receivable as described in Section VII.2 and VII.3 above;
  • non-observance and/or wrong and/or incomplete implementation of the guidelines, demands and indications contained in the instruction manual and in the technical data sheet;
  • defects which occur due to normal wear;
  • subsequent, unauthorized modification to the object of Delivery unless there is evi-dence that the defect was not a result of such a modification.
  • improper usage of the object of Delivery;
  • improper storage of the object of Delivery;
  • improper installation and/or improper composition of the object of Delivery;
  • problems and/or damages which occur due to incorrect or careless handling;
  • problems and/or damages which occur due to abuse or improper equipment;
  • problems and/or damages which occur due to linkage, blending and/or processing of the functional modules with unsuitable, incorrect and/or defective components by the Customer and/or by a third party and/or due to incorrect operation and/or application; and
  • problems and/or damages which occur due to special external influences not presup-posed by the contract.

7. Compensation for damages may only be required in accordance with Section X.

VIII. Defects of Title

1. Unless otherwise expressly agreed upon, we are obliged to perform the Deliveries free of Industrial Property Rights of third parties only in the countries where the products are produced or where Deliveries are made. "Industrial Property Rights" in terms of these GTC are patents, utility models, design patents, trademarks, including their applications, as well as copyrights. Insofar as a third party raises any justified claims against the Cus-tomer due to infringement of Industrial Property Rights through Deliveries supplied by us and used in conformity with the contract, we shall be liable to the Customer as follows:

2. We will at our discretion and at our expense (a) either acquire the rights of use for the Deliveries in question, (b) alter them in such a manner that Industrial Property Rights are not infringed, or (c) exchange them. Should this not be possible for us at suitable condi-tions, the Customer is entitled to withdraw from the contract or obtain a reduction in the price as provided for by law. Compensation for damages may only be required in ac-cordance with Section X.

3. The above-mentioned obligations exist only insofar as the Customer informs us in writing immediately concerning the third party claims asserted, do not recognize any infringement and all defensive measures and settlement proceedings remain reserved to us. Should the Customer cease to use the Deliveries in order to reduce damages or for other important reasons, the Customer shall point out to the third party that cessation of use cannot be construed as an acknowledgement of an infringement of Industrial Property Rights.

4. The claims of the Customer are excluded insofar as the Customer is solely responsible for the infringement of the Industrial Property Rights.

5. The claims of the Customer are also excluded insofar as the infringement of Industrial Property Rights (a) is due to special instructions of the Customer or (b) is due to linkage, blending and/or processing by the Customer and/or by a third party (c) is due to any use not to be foreseen by us or (d) has been caused by the Deliveries being altered by the Customer without authorization.

6. Claims against us or our vicarious agents due to deficiencies in title over and above or other than those governed in this Section VIII are excluded.

IX. Industrial Property Rights

1. Existing Industrial Property Rights shall remain with the respective party. Any transfer of Industrial Property Rights requires an express written agreement between the parties.

2. We are solely entitled to all work results, know-how and Industrial Property Rights achieved by us in connection with the Deliveries and/or the cooperation between us and the Customer unless we have made an express differing written agreement with the Customer. The Customer is only insofar and to the extent entitled to use the Deliveries as this is absolutely necessary for the use of the Deliveries within the limits of the contract.

3. Granting of a right of use for a Industrial Property Right pursuant to sections IX.1 and IX.2 in favour of the Customer requires an express written agreement between the Customer and us.

X. Liability

1. We are only liable against the Customer for any damage claims and reimbursement of needless expenditures - in accordance with § 284 BGB - (hereinafter referred to as "Damages") caused by deficiencies of Delivery or caused by violation of other contractu-al or non-contractual obligations, in particular caused by tort, due to wilful intent or gross negligence. Excluded from this limitation shall be those Damages that are based on injury to life, limb or health, on the assumption of a guarantee (according to § 443 BGB) or of a procurement risk, the violation of material contractual obligations as well as on liability according to the Produkthaftungsgesetz (German Product Liability Law).

2. Damages caused by the violation of material contractual obligations are limited to such Damages that must have been foreseeable by us at the time of conclusion of contract as typical damages (hereinafter referred to as " Typical Damages") provided that the liability is not due to wilful intent or gross negligence and not based on injury to life, limb or health, on the assumption of a guarantee or of a procurement risk as well as on liability according to the Produkthaftungsgesetz (German Product Liability Law).

3. Typical Damages in the meaning of Section X.2 are:

  • in each case: in maximum Damages in the amount of the net purchase price of the contract affected
  • per calendar year: in maximum Damages in the amount of the net turnover the Customer has purchased products from us in the preceding calendar year. In the first contract year in maximum Damages in the amount of the net turnover the Customer has purchased products from us until the occurrence of the event of the damage.

In any case Typical Damages are not any indirect Damages (e.g. recovery for loss of profit, Damages resulting from interruption of business).

4. Irrespective of Section X.3 the amount of Damages to be paid by us to the Customer shall be determined by having, adequately in favour of us, due regard to our economic situation, nature, scope, and duration of the business relationship, possible causative or responsible contributions by you according to § 254 BGB and a particularly disadvantageous situation of installation of the part supplied. Especially Damages, cost and expenditures which shall be paid by us to the Customer have to be in an appropriate relationship to the value of the Deliveries.

5. All limitations of liability shall apply to the same extent to vicarious agents.

6. A change in the burden of proof to the disadvantage of the Customer is not associated with the provisions in this Section X.

7. Material contractual obligations pursuant to Section X.1 and X.2 are all obligations whose fulfilment the proper performance of the contract makes possible in the first place and on whose compliance the Customer regularly may trust.

XI. Prices – Price Increases

Our prices are net prices. They are "ex works" (Incoterms 2010). Packing, shipping and insurance shall be billed separately unless otherwise expressly agreed.

XII. Payment Terms – Set-off – Securities – Assignment

1. Unless otherwise expressly agreed, payment terms are 30 days net as of the invoice date – but not before the goods are received.

2. The Customer may only set off his claims to the extent that these claims are admitted by us, are undisputed or have been finally legally determined. The Customer may exercise a right for retention only if its counterclaim is based on the same contractual relationship.

3. If there are actual facts that the financial situation of the Customer deteriorates after conclusion of the contract or if we become aware of other facts after conclusion of the contract resp. other facts are given after conclusion of the contract which justify the pre-sumption that our claim against the Customer is jeopardised by the inability to perform by you, we may demand corresponding adequate securities for our Deliveries and/or revoke any payment terms granted, even for other obligations. If the Customer does not present the adequate securities requested by us within a reasonable time, we may withdraw from the contract. Already existing claims from Deliveries provided or due to default remain unaffected as well as our rights resulting from § 321 BGB.

4. The assignment of claims from this contractual relationship is permitted only with our prior written consent. There exists no claim for granting of such approval. § 354a HGB remains unaffected.

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1. In case of a resale of the objects of delivery you are obliged to observe the regulations of (a) the German Außenwirtschaftsgesetz (AWG), (b) the German Außenwirtschaftsver-ordnung (AWV), (c) the EU-Dual-Use-Directive (Directive (EU) Nr. 428/2009) and of (d) the US Export Administration Regulations (EAR) - in their current valid version - and to obligate your customers accordingly.

2. You shall reimburse us for all damages and costs which result of the non-compliance of the regulations of this Section XIII and you shall indemnify us from any third party claims raised against us in connection therewith.

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XIV. Place of Fulfilment – Place of Jurisdiction – Applicable Law

1. Place of fulfilment for all duties resulting from the contractual relationship is Neuhausen a.d.F., Germany.

2. It is agreed that (a) place of jurisdiction for legal actions falling within the jurisdiction as regards the subject matter of the Amtsgerichte (local courts) shall be the Amtsgericht Stuttgart, Germany and (b) place of jurisdiction for legal actions falling within the jurisdiction as regards the subject matter of the Landgerichte (regional courts) shall be the Landgericht Stuttgart, Germany. We are also entitled to start a legal action at the domicile of the Customer.

3. German law shall apply exclusively without giving effect to its conflict of laws principles.

Contact

Balluff GmbH
Schurwaldstraße 9
73765 Neuhausen a.d.F.
Deutschland
Tel. +49 7158 173-0
Fax +49 7158 5010
balluff@balluff.de
www.balluff.com