The Buyers: SHANGHAI MACHINE TOOL IMP. & EXP. CORP.
ADD: 937 BEIJING ROAD (W) SHANGHAI, CHINA
This Contract is made by and between the Buyers and Sellers, whereby the Buyers agree to buy and the Sellers agree to sell the under-mentioned commodity according to the terms and conditions stipulated below:
(1) COMMODITY AND SPECIFICATIONS:
(3) UNIT PRICE:
(4) TOTAL AMOUNT:
(5) COUNTRY OF ORIGIN AND MANUFACTURERS:
(6) TIME TO SHIPMENT:
(7) PORT OF SHIPMENT:
(8) PORT OF DESTINATION:
(9) INSURANCE: To be covered by the Buyers.
To be packed in new strong wooden case(s)/carton(s) suitable for long distance ocean transportation and well protected against dampness, moisture, shock, rust and rough handling. The Sellers shall be liable for any damage to the goods on account of improper packing and for any rust damage attributable to inadequate or improper protective measures taken by the Sellers, and in such case or any cases, all losses and expenses incurred in consequence thereof shall be borne by the Sellers.
(11) SHIPPING MARK:
On the surface of each package, the package number, measurements, gross weight, net weight, the lifting positions, such cautions as “DO NOT STACK UPSIDE DOWN”. “HANDLE WITH CARE”, “KEEP AWAY FROM MOISTURE” and the following shipping mark shall be stenciled legibly in fadeless paint.
(12) TERMS OF PAYMENT:
a. Payment by L/C: One month before shipment, the Buyers shall establish with Bank of China, Shanghai an irrevocable L/C in favor of the Sellers, to be available against presentation in Shanghai of the shipping documents stipulated in Clause 13 hereof.
b. Payment by Collection: After delivery is made, the Sellers shall send through the Sellers’ bank a draft drawn on the Buyers together with the shipping documents specified in Clause 13 hereof the Buyers through the Buyers’ bank, the Bank of China, Shanghai, for collection.
c. Payment by M/T: Payment to be effected by the Buyers not later than _ days after receipt of the shipping documents specified in Clause 13 hereof.
The Sellers shall present the following documents to the paying bank for negotiation/collection, or to the Buyers in case of payment by M/T:
① Full set of Negotiable Clean on Board Ocean Bills of lading marked “FREIGHT TO COLLECT” and made out to order, bland endorsed, and notifying the China National Foreign Trade Transportation Corporation at the port of destination.
② Parcel Post Receipt, including postage/Air Way Bill.
③ Insurance Policy or Certificate, covering war risk and all risks including TPND, Breakage and leakage irrespective of percentage and indicating “In the event of loss or damage, request for survey upon arrival of the cargo at the port of destination be made to the China Commodity Inspection Bureau of that port”.
④ Invoice on quintuplicate, indicating contract number and shipping mark.
⑤ Packing List in duplicate with indication of both gross and net weights, measurements and quantity of each item packed.
⑥ Certificate of Quality and Quality/Weight and Testing Report, each in duplicate, issued by the manufacturers as specified in Item a of Clause 18 hereof.
⑦ A true copy of telex to advise the Buyers of shipment immediately the goods are loaded on ship as specified in Clause 15 hereof.
Within 10 days after shipment is effected, the Sellers shall prepare three sets, each comprising one copy each of the above mentioned documents with the exception of the telex shipping advice, one set to be air-mailed to the Buyers and the other two sets to the China National Foreign Trade Corporation at the port of destination.
(14) TECHNICAL DOCUMENTS:
a. One complete set of the following technical documents written in English shall be packed and dispatched together with each consignment:
① Foundation drawings;
② Wiring instructions, diagrams of electrical connections and/or pneumatic and/or hydraulic connections;
③ Manufacturing drawings of easily worn parts;
④ Spare parts catalogues;
⑤ Certificate of quality as stipulated in Item a of Clause 18 hereof;
⑥ Erection, operation, service and repair instruction books.
b. _ months before shipment, the Sellers shall airmail to the Buyers two complete sets of the technical documents mentioned in points ①, ②, ③, ④, ⑤ and ⑥ under Item a of this Clause.
(15) TERMS OF SHIPMENT:
a. For each shipment exceeding two metric tons in gross weight, the Sellers shall, 60 days before the date of shipment stipulated in Clause 6 hereof, advise the Buyers by fax/letter of the contract number, name of commodity, quantity, value, number of packages, gross weight and measurements and date of readiness at the port of shipment in order for the Buyers to book shipping space. For each shipment not over two metric tons in gross weight, the Sellers shall get in direct tough with the Buyers’ shipping agent at the loading port.
b. Booking of shipping space for each shipment exceeding two metric tons in gross weight will be attended to by the Buyers, shipping agent, China National Chartering Corporation, Beijing, China with whom the Buyers shall keep in close contact in the matter of shipment. The Sellers shall keep in close contact with ZHONGZU’s shipment agent at the loading port.
c. China National Chartering Corporation, Beijing, China, or their shipping agent at the loading port, will send the Sellers, 10 days before the estimated date of arrival of the carrying vessel at the port of shipment a preliminary notice indicating the name of vessel, estimated date of loading, contract number in order for the Sellers to arrange shipment. In case the carrying vessel previously designated is to be replaced by another vessel or in case the estimated date of arrival of the carrying vessel is to be advanced or postponed, the Buyers or their shipping agent shall advise the Sellers to that effect in time. Should the vessel fail to arrive at the port of loading within 30 days after the arrival date advised by the Buyers or their shipping agent, the Buyers shall bear the storage and fire insurance expenses incurred from the 31st day.
d. The Sellers shall be liable for any dead freight or demurrage consequent upon their failure to have the goods ready for loading after the carrying vessel has arrived at the port of loading in time.
e. The Sellers shall bear all expenses and risks involved in the handing of the goods before they pass over the vessel’s rail and are released from the tackle, whereas all expenses involved in the handing of the goods after they have passed over the vessel’s rail and have been released from the vessel’s tackle shall be for the Buyer’s account.
(16) SHIPPING ADVICE:
Immediately the goods are completely loaded, the Sellers shall telex to notify the Buyers of the contract number, name of commodity, quantity, gross weight, invoiced value, name of the carrying vessel and the date of sailing. If any package is above 9 metric tons in weight, or over 3,400 mm in width, or over 2,350 mm on both sides in height, the Sellers shall advise the Buyers of the weight and measurements of such package. In case the goods are not insured in time owing to the Sellers having failed to give timely advice, any and all consequent losses shall be borne by the Sellers. In the case of dangerous goods, the Sellers shall telex to notify the Buyers and China National Foreign Trade Transportation Corporation at the port of destination of their nature and the method of handing them.
(17) GUARANTEE OF QUALITY:
The Sellers shall guarantee that the goods are made of best materials, with first class workmanship, brand new, unused and correspond in all respects with the quality, specifications and performance as stipulated in this contract. The Sellers shall also guarantee that the goods when correctly mounted and properly operated and maintained, will give satisfactory performance for a period of 12 months starting from the date on which the goods arrive at the port of destination.
(18) INSPECTION AND CLAIMS:
a. The manufacturers shall, before making delivery, make a precise and comprehensive inspection of the goods as regards their quality, specifications, performance and quantity/weight and issue certificates certifying that the goods are in conformity with the stipulations of this contract. The certificates shall form an integral part of the documents to be presented to the paying band for negotiation/collection of payment but shall not be considered as final in respect of quality, specifications, performance and quality/weight. Particulars and results of the test carried out by the manufacturers must be shown in a statement to be attached to the said Quality Certificate.
b. After arrival of the goods at the port of destination, the Buyers shall apply to the China Commodity Inspection Bureau (hereinafter called the Bureau) for a preliminary inspection of the goods in respect of their quality, specifications and quantity/weight. If any discrepancies are found by the Bureau regarding the specifications or the quantity/weight or both, except those for which either the insurance company or the shipping company is responsible, the Buyers shall, within 120 days after discharge of the goods at the port of destination, have the right either to reject the goods or to claim against the Sellers on the strength of the inspection certificate issued by the Bureau.
c. Within the guarantee period stipulated in Clause 17 hereof should the quality and/or the specifications of the goods be found not in conformity with the contracted stipulations, or should the goods prove defective for any reasons, including latent defect or the use of unsuitable materials, the Buyers shall arrange for an inspection to be carried out by the Bureau and have the right to claim against the Sellers on the strength of the inspection certificate issued by the Bureau.
d. Any and all claims shall be regarded as accepted if the Sellers fail to reply within 30 days after receipt of the Buyers’ claim.
(19) SETTLEMENT OF CLAIMS:
In case the Sellers are liable for the discrepancies and a claim is made by the Buyers within the period of claim or quality guarantee period as stipulated in Clauses 17 and 18 of this contract, the Sellers shall settle the claim upon the agreement of the Buyers in the following ways.
a. Agree to the rejection of the goods and refund to the Buyers the value of the goods so rejected in the same currency as contracted herein, and to bear all direct losses and expenses in connection therewith including interest accrued, bank charges, freight, insurance premium, inspection charges, storage, stevedore charge and all other necessary expenses required for the custody and protection of the rejected goods.
b. Devaluate the goods according to the degree of inferiority, extent of damage and amount of losses suffered by the Buyers.
c. Replace the defective goods with new ones that conform to the specifications, quality and performance as stipulated in this contract, and bear all expenses incurred to and direct losses sustained by the Buyers. The Sellers shall, at the same time, guarantee the quality of the replacement goods for a further period of 12 months as specified in Clause 17 of this contract.
(20) FORCE MAJEURE:
The Sellers shall not be held responsible for any delay in delivery or non-delivery of the goods due to Force Majeure. However, the Sellers shall advise the Buyers immediately of such occurrence and within fourteen days thereafter, shall send by airmail to the Buyers for their acceptance a certificate issued by the competent government authorities of the place where the accident occurs as evidence thereof. Under such circumstances the Sellers, however, are still under the obligation to take all necessary measures to hasten the delivery of the goods. In case the accident lasts for more than ten weeks, the Buyers shall have the right to cancel this contract.
(21) LATE DELIVERY AND PENALTY:
In case of delayed delivery, except for force majeure cases, the Sellers shall pay to the Buyers for every week of delay a penalty amounting to 0.5% of the total value of the goods whose delivery has been delayed. Any fractional part of a week is to be considered a full week. The total amount of penalty shall not, however, exceed 5% of the total value of the goods involved in late delivery and is to be deducted from the amount due to the Sellers by the paying bank at the time of negotiation, or by the Buyers direct at the time of payment. In case the period of delay exceeds 10 weeks after the stipulated delivery date the Buyers have the right to terminate this contract, but the Sellers shall not thereby be exempted from the payment of penalty.
All disputes in connection with this contract or the execution thereof shall be settled through friendly negotiations. In case no settlement can be reached through negotiations, the case should then be submitted for arbitration to the Foreign Trade Arbitration Commission of the China Council for the Promotion of International Trade. The arbitration shall take place in Beijing and the decision rendered by the said Commission shall be final and binding upon both parties; neither party shall seek recourse to a law court or other authorities for revising the decision. The arbitration fee shall be borne by the losing part.
This contract is made out in two original copies, one copy to be hold by each party in witness thereof.