CECOF

European Committee of Industrial Furnace and Heating Equipment Associations

General Conditions of Delivery and Erection of Industrial Furnaces and Heating

Equipment

I. Nature and Object of the Contract

  • The consignment as a whole only includes the materials as defined in the contract of delivery.
  • Except when otherwise agreed, exclusions are:
  • the foundations,
  • the cable routes,
  • all the supply piping, joints and drainage points,
  • all interconnecting wiring and cabling to combustion, electrical and ancillary equipment,
  • the installation of the cabling and supply of materials,
  • covers and grating for gutters and pits,
  • all jigs and fixtures,
  • tools, other materials, fluids and necessary consumable items for erection, commissioning and functioning,
  • the training of personnel in the running of the equipment delivered,
  • the erection and start-up.

II. Price

The prices indicated in the supplier’s offer, the buyer’s order and the supplier’s order acknowledgement do not include charges not specifically mentioned, and notably those relating to the standards, special arrangements, duties or taxes in force in the country of destination.

III. Payments

Payment for the supplies (proportional payments in the case of partial deliveries of items or elements independent from each other) is to be made in the supplier’s country, by the methods and dates advised in the acknowledgement, with exchange risks being assumed by the buyer, whichever payment method is chosen. In the case of settlement by draft or bill of exchange, the discount interest, and corresponding bank charges and commissions, are for the account of the buyer. The interest rate is to be the subject of a separate agreement between the parties. Payment cannot be suspended or delayed by the buyer beyond the dates agreed. Possible reasons for justifying a delayed payment must be the subject of a separate agreement between the supplier and buyer. In the case of delayed payment, the interest premiums calculated on the rates in force in the supplier’s country will be invoiced to the buyer. In the case of nonpayment,

the supplier has the right to postpone the completion of his contractual obligations of delivery and erection vis-à-vis the buyer. The materials remain the property of the supplier until payment has been made. If the “reservation of title” clause is not applicable, but if precedence authorises the supplier to reserve other rights to the materials, then the supplier can exercise these rights.

IV. Delivery and Completion Periods

The time limit begins to run either from the signing of the contract, or the date of the acknowledgement by the supplier. In any case, the starting point of the time limit will be put back to the date the supplier received the deposit agreed on signing the contract, and/or the date on which the buyer provides technical information on the installation, which is not specified in the contract.

Delivery is specified as being ex-works and takes effect from the despatch to the buyer or transport company, even in cases where the price agreed includes transport and also where the supplier organises the transport.

The time limit is calculated on the basis of working days, with a reduction being made for public holidays and annual factory shut-down. This is not fixed and can be extended within reason if the buyer cannot fulfil, within the available time, his contractual obligations, in particular:

  • if payment has not been made according to the terms of the contract,
  • if the buyer does not supply the necessary information in time to ensure satisfactory supply, or
  • if he does not approve, within a reasonable time-scale, the drawings and plans submitted to him for approval,
  • if those materials to be supplied by the buyer are not made available in the required time,
  • in the case of non-fulfilment of obligations concerning assistance and services agreed in the contract.

If the materials made available to the buyer cannot be delivered for reasons beyond the supplier’s control, delivery is then said to be rightfully effected from the moment availability is notified. However, the payment terms are still applicable. In this case, all charges for storage, upkeep, security and insurance are for the account of the buyer. The time limit is automatically extended when:

  • completion is delayed due to reasons beyond the supplier’s control, such as those resulting from social conflict (strikes and lock-outs),

or

  • in the case of failure of the means of transportation, government action, embargo, customs, economic or energy industry action. This also applies when sub-contractors are affected by such action.

V. Transportation and Packaging

In the absence of any specific instructions given by the buyer within a reasonable time-scale, the material is to be despatched either packed or unpacked, as the supplier decides. The packaging is then invoiced to the buyer. The transport and insurance charges, which are also or the account of the buyer, are to be settled directly with the transporter. Even if the terms of delivery are free delivered buyer’s works, all risks are assumed by the latter. The interpretation of the international commercial terms, such as CIF FOB, etc., is that given by the latest version of Incoterms, published by the International Chamber of Commerce.

VI. Technical Characteristics and Drawings

Weights, dimensions, consumption figures, production capacity, and in general all the characteristics as indicated in the catalogues, are to be considered as indicative values only, and are not obligatory.

The supplier reserves the right – and the buyer must agree – to modify at any moment, or to provide any alternative materials, if these can improve the equipment itself or its functioning. The buyer expressly undertakes only to use drawings and technical information provided by the supplier strictly in accordance with the terms of the contract. Under no circumstances is the buyer authourised to allow a third party access to the drawings and technical information relating to the equipment, and/or erection (which remain the supplier’s exclusive property), nor can he reproduce these without the prior written permission from the supplier.

VII. Erection

The buyer is expected to cooperate with the supplier so that the installation can be carried out under the best possible conditions to ensure it functions well and is efficient. If supply includes erection on site, the buyer is expected to ensure that the equipment delivered to him is complete and in good condition, and to transport it at his expense to its destination (unless otherwise agreed), or to store it in a covered and well-sheltered area, so that it is maintained in good condition until its erection.

The security, upkeep, and insurance against fire, accident, theft, etc., are for the buyer’s account. The buyer must, from the time of erection, ensure all materials are returned to the supplier’s personnel in good condition. It is clearly understood that work cannot be carried out in unsanitary or dangerous places, and that the supplier’s personnel are to be provided with suitable accommodation and food, and are to have medical assistance placed at their disposal on site. At the request of the supplier, the buyer will provide, if required, free of charge, materials, means of transport, energy and power sources, and staff, even if this was not stipulated in the contract.

VIII. Acceptance

If the buyer specifically requests it, acceptance trials will take place in the 10 days following notification of completion of erection, or availability for acceptance, depending upon the terms and conditions which were established at the time of signing the contract. If acceptance has not been demanded, or if it cannot take place for reasons beyond the supplier’s control, the installation will be taken as being accepted, without reservation, and will be subject to the guarantee, in line with the terms of the following paragraphs. The costs for technical personnel involved in acceptance are entirely for the buyer’s account, regardless of where acceptance has taken place. The same applies to costs resulting from use of materials during these trials (energy, products, etc.). Acceptance is said to be effected from the time that the agreed production capacity has been proven. For reasons of safety, the buyer must not under any circumstances commission the installation before acceptance has taken place, not even to carry out preliminary trials.

IX. Performance Guarantee

The supplier guarantees that the plant supplied corresponds to the technical conditions and performances indicated in the contract. It is for the supplier to prove during the initial trials that the performance agreed upon can be obtained. If this test is provided, the buyer cannot demand further trials.

X. Product Guarantee

1. The duration of the guarantee will be as follows:

a. 6 months, in the case of continuous use (7 days a week, 24 hours a day).

b. 12 months, in the case of an 8-hour shift, excluding those components subjected to strong thermal applications.

2. Those components subject to wear and tear as indicated in the contract or offer, are excluded from the guarantee. If these have not been itemised in the offer or contract, then they are considered to be parts subject to wear and tear recognised as such in industrial practice. The guarantee does not cover damage to the equipment or parts when due to misuse or negligence, or to uses not foreseen in the contract faulty components should be notified immediately to the supplier in writing, and this must be done

  • not later than 14 days after delivery, in the case of repairable faults,
  • not later than 14 days after the fault being noticed, in the case of unrepairable faults.

The defective parts will be, at the supplier’s discretion, repaired free of charge or replaced, depending on whether it is a defect due to bad workmanship, faulty materials or operational defects. The buyer should allow the supplier a normal time limit for supplying the component and to indicate a time when it would be possible to correct the fault. The buyer has the right to highlight his complaints regarding existing defects up to 6 months after date of notification of the defects, as indicated above, but, at the latest, before the expiry date of the guarantee.

3. When the equipment is delivered but not erected or commissioned, the guarantee starts from the date of despatch of the materials from the supplier’s factory, or where there is a delay in despatch which is not due to the supplier, it will date from the notification of availability of the equipment. In the case of delivery and erection, or attendance at the erection and commissioning, the guarantee starts from the time of receipt or commissioning given by signing a statement of receipt, and finally expires at the latest 18 months after the date of the last delivery of materials or their availability.

4. The guarantee covering replacement or repaired components expires on the same date as that of the main delivery.

5. The guarantee becomes invalid if the buyer or a third party attempts to modify or repair the installation without having been authorized to do so in writing by the supplier, or if the buyer does not take immediate measures to prevent worsening of damage and gives the supplier the possibility of correcting the faults. This does not apply in urgent cases, where the safety of the installation is put at risk, or when it entails the

prevention of serious damage (the supplier having been informed immediately be forehand), or if the supplier is late in correcting the faults – the buyer will have the right to correct the fault himself or with the help of a third party and to demand a refund from the supplier of justified costs for suitable intervention.

XI. Refusal of Responsibility

All other claims of the buyer, irrespective of the legal grounds, for instance a breach of secondary contractual obligations (example: advice, information), instructions for start-up of machinery by incorrect action (example: attack on property, damage to equipment and people, responsibility for products), in particular a claim for repair of damages not having occurred during the delivery) is excluded.

This exclusion of responsibility is not valid in the case of intentional damage or gross negligence, when the guarantee had clearly insured the buyer against damages, nor which are effected during the delivery. If one of the parties is held to interest on damages, these will only be paid for a maximum of damage, which for the party at fault, was foreseeable at the time of the conclusion of the contract.

XII. Arbitration Procedures and Application of Jurisprudence

1. All disputes arising from the existing contract will be resolved by one or more arbitrators by applying the rules of conciliation and arbitration of the International Chamber of Commerce.

2. Unless otherwise specified, the contract is governed by the laws in force in the supplier’s own country,

but the rules from the UN-agreement in Vienna dated 11.04.1980 concerning contracts about international purchase of goods and the measures of The Hague unitary laws on selling do not apply.