This Agreement (“Agreement”) is made that [•] day of [•], 20[•] by and between [•], with its registered office at [•] (“Buyer”) and [•], with its registered office at [•] (“Seller”) :
WITNESSETH
WHEREAS, the Buyer desires to purchase from the Seller and the Seller desires to sell to the Buyer [•] during a period of [•] years.
NOW, THEREFORE, in consideration of the premises and covenants herein contained, the parties hereto agree as follows:
Article 1. Sale of Goods
1.1 The Buyer shall purchase from the Seller and the Seller shall sell to the Buyer newly manufactured [•] (“Goods”) subject to the terms and conditions herein provided.
Article 2. Quantity, Specification and Quality
2.1 For [•] years commencing [DATE], the Buyer shall purchase from the Seller and the Seller shall sell to the Buyer [•] pieces of the Goods per year to make the total quantities of the sale of the Goods [•] pieces during [•] to [•]
2.2 Specification and Quality
2.2.1 The specification or the Goods shall be prescribed and specified in Specification attached hereto as Exhibit [I]
Article 3. Price
3.1 The agreed unit price of each Goods(“Price”) is [•] United States Dollars ( US$ [•] ) on [•] basis
3.2 The Price is fixed and effective up to shipments performed on or before [•] and thereafter the Price shall be readjusted every [•] months according to Seller’s request
Article 4. Payment
4.1 Except otherwise agreed by the parties, all the payment for the Goods shall be made in United States Dollars by an irrevocable letter of credit in favor of the Seller, [Confirmed by first class international bank designated by the Seller]. The letter of credit shall be established by the Buyer at least [two months] prior to each scheduled shipment date to be stipulated in Exhibit [II] and to be negotiable at sight against draft and to be valid for no less than [•] days after the latest date allowed for the shipment.
The Buyer shall bear all banking expenses associated with the establishing of the letter of credit. Partial shipment, transshipment and partial negotiations of letter of credit shall be permitted and the letter of credit shall be worded accordingly.
4.2 Delay by the Buyer in establishing the letter of credit shall extend the time for performance of this Agreement by the Seller to such extent as may be necessary to enable it to make delivery in the exercise of reasonable diligence after such letter of credit has been established. Should opening the letter of credit be delayed for causes for which the Buyer is liable, Buyer shall pay the Seller amount equal to [•] percent ( [•] %)] of the amount of relevant letter of credit per each full week as liquidated damages net cash or sight draft within [•] days from receipt of relevant bill from the Seller. However, the total amount of liquidated damages shall not be more than [•] percent ( [•] %) ]of the amount of relevant letter of credit. Should opening of letter of credit be delayed by more than [•], the Seller may terminate the Agreement without prejudice to the Seller’s rights under the Agreement, including claim of said liquidated damages.
Article 5. Shipment of the Goods
5.1 The Goods shall be delivered by the Seller to the Buyer at [•] in accordance with the Shipment Schedule attached hereto as Exhibit [II] (“Shipment Schedule”).
5.2 The Seller shall arrange the suitable vessel of any flag, subject to freight being available, to transport the Goods to the destination, [•] or other seaport designated by the Buyer on relevant letter of credit provided that C.I.F. price is not increased. The Seller shall notify by telex or facsimile, the Buyer of necessary information at least [•] days before each shipment so that the Buyer may make arrangement for receipt and inland transportation, if necessary, of the Goods.
Article 6. Late Delivery
6.1 In the event that the Seller delays shipment of the Goods in accordance with the shipment Schedule for reasons solely attributable to the Seller, the Buyer shall grant the Seller [•] days grace, without liquidated damage on each specified delivery. After that [•] grace, the Buyer have the right to claim [•] percent ( [•] %) of the contract price of the Goods of which shipment shall have been delayed.
6.2 If the aforesaid delay of delivery exceeds [•], the Buyer have the right to cancel the Agreement, without prejudice to Buyer’s right under the Agreement, including claim of said liquidated damages.
6.3 In the event of Force Majeure, liquidated damage for late delivery shall not be applied.
Article 7. Packing and Marking
7.1 The Goods shall be packed and marked in the manner customary for exporting. In case special instruction are necessary, Buyer shall furnish Seller with such instructions in time for preparation or shipment of the goods.
Article 8. Insurance
8.1 Seller shall effect marine insurance on all shipments on [ICC (B)] for 110% of the invoice amount.
Article 9. Warranty
9.1 Each goods supplied by the Seller is hereby expressly warranted to be free from defect in material and workmanship under normal use and service.
9.2 This Warranty shall be limited to a period of [•] after delivery thereof to the Buyer under storage in a roofed warehouse.
9.3 The above warranty shall not apply to the Goods, which is used for a purpose for which it was not designed or which has been subject to normal wear and tear, damage caused by accident, misuse, abuse, damage occurring during shipment.
9.4 The Seller’s liability under this warranty shall be In Lieu of all other liabilities of the seller for defect in material or workmanship of the Goods or any other warranties, express or implied, statutory or at common law which the Buyer hereby waives. In no event shall the seller be liable for consequential or indirect damages regarding the Goods.
Article 10. Claim
10.1 Any claim by Buyer of whatever nature arising under this contract shall be made by cable within [•] days after arrival of the goods at the destination specified in the bills of lading. Full particulars of such claim shall be made in writing, and forwarded by registered mail to Seller within [•] days after cabling. Buyer must submit with particulars sworn surveyor’s reports when the quality or quantity of the goods delivered is in dispute.
Article 11. Force Majeure
11.1 Except for the payments due for the Goods delivered by the Seller, any party (“Affected Party”) hereto shall not be responsible to the other party (“Non- Affected Party”) for nonperformance (either in whole or in part) or delay in performance of the terms and conditions of the Agreement, due to war, war-like operation, acts, of Good, riot, strikes, sabotage or other labor disturbances in the manufacturing plant; lockout of the manufacturing plant; epidemics, floods, earthquakes, typhoon; embargoes, laws and regulations of the Buyer’s country or seller’s country; or any other causes beyond the control of the parties. In case of any such event the terms of this Agreement relating to time and performance shall be suspended during the continuance of the event.
11.2 Within [•] days from the date of commencement of the event, the Affected Party shall advise the Non-Affected Party by telex, facsimile or cable of the date when such delay in performance commenced, and the reasons therefor as enumerated in this Agreement; likewise, within [•] days after the delays ends, the Affected Party shall advise Non-Affected Party by telex, cable or facsimile of the date when each delay ended, and shall also specify the redetermined time by which the performance of the obligation hereunder is to be completed.
Article 12. Breach, Indemnity
12.1 In the event either party breaches an obligation under this Agreement or toward a third party delays or interferes with the other party in the performance of this Agreement, it shall be liable to the other party for any reasonable direct damages thereby sustained by the other party. In the event a third party commences any proceeding for which a party hereto intends to claim indemnity, such party shall promptly notify the other party and allow suitable participation in all stages of the proceeding and settlement thereof. Failure to promptly notify or allow equitable participation by the other party shall reduce the right of indemnity by the extent of actual resultant prejudice.
12.2 It is specifically understood and agreed by both parties that the Buyer shall be solely responsible for observance of any restriction against importation of the Goods imposed by any federal or local authority in [Name of the Country] and shall defend and save harmless the Seller from any liabilities and obligations under the restriction or any claim arising out of the infringement of the restriction.
Article 13. Taxes/Duties, Contingent Charges
13.1 Any duties, tariffs for import and export or other taxes or charges which are now assessed or imposed or which may hereafter be assessed or imposed by [Name of the Country] Government or other competent authorities other than [Name of the Country] in connection with the Goods and/or transactions thereof shall be borne and paid by the Buyer.
13.2 Increase in freight, insurance premiums, and/or surcharge due to war, threat of war, warlike conditions, port congestion or other emergency or contingency unforeseen or not existent at the time of concluding the Agreement, shall be for the Buyer’s account.
Article 14. Aftersales Service
14.1 The Seller may, upon request of the Buyer and consent of the Seller, dispatch some experienced technicians to some places in [Name of the Country] for the purpose of rendering effective after-service in connection with the Goods.
Article 15. Infringement
15.1 The Buyer shall be liable for and hold the Seller harmless from and against all losses and damages incurred and suits and claims brought by third party due to possible infringement of trademark, patent, copy-right or other proprietary rights of the third party in connection with the Seller’s manufacture and sale of the Goods according to the Specification attached hereto as Exhibit I.
Article 16. Termination
16.1 The Agreement may be terminated upon occurrence of any of the following events:
i) Agreement in writing of the parties;
ii) By the non-defaulting party, upon default by the other party in the performance
of any of its obligations under the Agreement, if not remedies within [•] days after receipt of written notice from the non-defaulting party;
iii) By the other party, upon either party’s (a) making an assignment for the benefit of creditors, being adjudged bankrupt, or becoming insolvent; (b) having a reasonable petition filed seeking its dissolution or liquidation not stayed or dismissed within [•] days; or (c) ceasing to do business for any reason;
iv) By the Seller, if the Buyer fails to open relevant letter of credit by more than [•] weeks as stipulated in Article 4.2 hereof; v) By either party, if a force majeure condition under Article 11 hereof makes it unreasonable to proceed with the Agreement in the foreseeable future.
16.2 Upon termination of the Agreement, neither party shall be discharged from any antecedent obligations or liabilities to the other party under the Agreement unless otherwise agreed in writing by the parties.
16.3 Nothing in the Agreement shall prevent either party from enforcing the provisions thereof by such remedies as may be available in lieu of termination.
Article 17. Arbitration
17.1 All disputes, controversies, or differences which may arise between the parties, out of or in relation to or in connection with this contract or for the breach thereof, shall be finally settled by arbitration in [Place of Arbitration] in accordance with the Commercial Arbitration Rules of The [Name of the Country] Commercial Arbitration Board and under the Law of [Name of the Country]. The award rendered by the arbitrator(s) shall be final and binding upon both parties concerned.
Article 18. Trade Terms and Governing Law
18.1 The Trade Terms under this agreement shall be governed and interpreted under the provisions of Incoterms, 1990.
18.2 This Agreement shall be governed by and construed in all respects under and by the laws of [Name of the Country].
18.3 In the event of conflict between the laws of Korea and Incoterms, 1990, Incoterms, 1990 shall prevail and govern.
Article 19. Assignment
19.1 Either party shall not assign this Agreement to any other person without the other parties’ prior consent in writing. In the event of assignment with the written consent of the other, the one shall not be relieved from its obligations under this Agreement and shall be held responsible for its performance.
Article 20. Non-Waiver
20.1 No claim or right of either party under this Agreement shall be deemed to be waived or renounced in whole or in part unless the waiver or renunciation of such claim or right is acknowledged and confirmed in writing by such party.
Article 21. Notice
21.1 Unless otherwise agreed by the parties, all notices, invoices and communications under this Agreement shall be sent to the parties at their address set forth in the initial paragraph of the Agreement. All notices shall be sent by registered airmail and where circumstances require, notices may be sent by cable, facsimile or telex which shall be confirmed by registered air mail.
Article 22. Entire Agreement
22.1 This Agreement constitutes the entire agreement between the parties, all prior representations having been merged herein, and may not be modified except by a writing signed by a duly authorized representatives of both parties.
Article 23. Effective Date and Term
23.1 This Agreement shall become effective upon signing of the duly authorized representatives of both parties and remain in full force and effect up to [•] unless terminated earlier pursuant to Article 16.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
[Buyer] [Seller]
By : _____________________________ By : __________________________
Title : [•] Title : [•]
2. SALES AGREEMENT
(PURCHASE ORDER FORM)
MESSRS. Date : [•]
Contract No. : [•]
AAA CORPORATION as Buyer, hereby confirms having purchased from you as Seller, the following goods by contract of purchase made on the above date and on the terms and conditions hereinafter set forth. Seller is hereby requested to sing and return the original and if any discrepancy be found by Seller, Buyer should be informed immediately by FAX to be subsequently confirmed by registered airmail.
NO. COMMODITY & SPECIFICATION QUANTITY UNIT PRICE TOTAL AMOUNT
Time of Shipment : [•]
Origin : [•]
Port of Shipment : [•]
Port of Destination : [•]
Payment : [•]
Insurance : [•]
Packing : [•]
Special Terms & Conditions : [•]
This contract is subject to the general terms and conditions set forth on back hereof :
Accepted by : [AAA CORPORATION]
on
(Seller) (Buyer)
GENERAL TERMS AND CONDITIONS
The purchase specified on the face hereof shall be subject to the following terms and conditions :
Licenses :
Seller, at its own expense, shall obtain any and all necessary permits or licenses to export the Goods from the country of shipment and/or to import, sell, use or otherwise dispose of the Goods, including but not limited to the safety standard, in any countries where such Goods are imported, sold, used, or otherwise disposed of.
Shipment :
Time of shipment is the essence of this Contract. Should Seller delay shipping the Goods for other reasons than those set forth in Clause Force Majeure hereof, Buyer may : (a) cancel this Contract in whole or in part, and/or (b) request to Seller, any Seller shall pay to Buyer, compensation for any and all damages incurred to Buyer and any special premium transportation or other costs required for the Goods to arrive at the destination as if the Goods be shipped as schedules.
Packing :
Seller shall pack the Goods in strong wooden(s) or in carton(s), suitable for long distance ocean/parcel post/air freight transportation and for change of climate, well protected against moisture and shocks. Seller shall be liable for any damage of the Goods and expenses incident thereto on account of improper packing and/or improper protective measures taken by Seller in regard to the packing.
Price :
Seller warrants that the prices sold to Buyer hereunder are no less favorable than the prices Seller currently extends to any other customer of the same Goods or similar goods and/or services in similar quantities. If Seller reduces its prices to others during the term of this Contract for such goods and/or services including but not limited to the Goods, Seller shall reduce the prices to Buyer for such Goods correspondingly.
Extra Expenses :
Should the freight, insurance premium and other expenses. at the time of shipment on this Contract be raised or charged owing to unexpected changes of circumstances after this Contract is executed, such differences and/or additional expenses shall be borne by Seller.
Insurance :
In the event of CIF or CIP Contract, insurance shall be effected by Seller. Such insurance shall be effected at one hundred ten percent (110%) of the invoice amount, and shall be issued by a first class underwriter and cover all risks.
Any insurance not set forth herein shall be arranged by Seller whenever requested by Buyer at the cost of Seller.
Adjustment :
Buyer may at any time and without any notice deduct or set-off Seller's claims for money due or to become due from Buyer against any claims that Buyer has or may have arising out of this or any other transaction between the parties hereto.
Parts :
Seller shall supply to Buyer the parts so long as Buyer continues to purchase the Goods pursuant to the terms and conditions of this Contract and for [•] years after the last shipment of the Goods to Buyer.
Inspection :
Inspection of the Goods shall be carried out at the place or port of unloading at Buyer's expense. Inspection may be done in the presence of Seller if Seller so desired. Provided, however, notwithstanding any inspection or payment made by Buyer, Buyer may without limiting its remedies reject, required corrections or refuse acceptance of the Goods which are not in conformity with the specifications or Seller's express or implied warranty. The Goods not accepted by Buyer shall be returned to Seller at Seller's account and risk or disposed of by Buyer at a time and price which Buyer deems reasonable and Seller shall reimburse Buyer any and all damage incurred to Buyer due to the Goods which are rejected.
Warranty :
Seller represents and warrants that all Goods to e sold by Seller under this Contract shall conform full to the specifications, analysis and other information furnished to Buyer and shall be merchantable, of good material and workmanship and free from any defects for at least [•] months from the date of unloading and further represents and warrants that the Goods shall be fit and sufficient for the purpose intended by Buyer and/or end users and that on delivery Buyer shall receive the title to the Goods, free and clear of all liens and encumbrances. Seller's warranty under this Contract as stated above shall be an essential condition of this Contract and any breach of the said warranty shall give Buyer the right(a) to reject the Goods so affected, without prejudice to any right to damages for such breach or to any other right arising from such breach of this Contract and/or (b) to terminate this Contract in whole or part.
Any and all warranty herein shall be in addition to any warranties express or implied by law or otherwise made by Seller and will survive acceptance and payment by Buyer.
Remedy :
If Seller shall be in default of this Contract or shall fail to ship the Goods at the time scheduled, Buyer may be written notice to Seller exercise any of the following remedies:(a) terminate this Contract: or(b) terminate this contract as to portion of the Goods in default only and purchase an equal quantity of the Goods of same kind and grade and recover from Seller the excess of the price so paid over the purchase price set forth in this Contract, plus any incidental loss or expense: or (c) terminate this Contract as to any unshipped balance and recover from Seller as liquidated damages, a sum of five(5) percent of the price of the balance.
Further, it is agreed that the rights and remedies herein reserved to Buyer shall be cumulative and in addition to any other or further rights and remedies available at law.
Infringement :
Seller shall be responsible for any infringement with regard to patent, utility model, trademark, design or copyright relating to the Goods in any country where the Goods are sold, used or otherwise disposed of. In the event of any dispute with regard to the said intellectual or industrial property right, Buyer may cancel this Contract. Seller shall be responsible
for and shall defend, reimburse, indemnify and hold Buyer harmless from any and all liabilities, claims, expenses, losses and/or damages sustained thereby.
Force Majeure :
In the event of any prohibition of import, refusal to issues an import license, act of Goods, war, blockade. embargo, insurrection, or any other action of governmental authorities, civil commotion, plague or other epidemic, fire, flood, or any other unforeseeable causes beyond the control of a party, the party shall not be liable for any default arising therefrom in performance of this Contract.
Arbitration :
All disputes, controversies, or differences which may arise between the parties hereto, out of or in relation to or in connection with this Contract, shall be finally settled by arbitration in [Name of the Country] in accordance with the Commercial Arbitration Rules of The [Name of the Country] Commercial Arbitration Board.
Trade Terms :
All trade terms provided in this contract shall be interpreted in accordance with the latest Incoterms of the International Chamber of Commerce.