ABB DRIVE GENERAL TERMS AND CONDITIONS FOR PRODUCTS SALES

ABB DRIVE GENERAL TERMS AND CONDITIONS

FOR PRODUCTS SALES

General Terms

The General Terms & Conditions of Sale (GTC) shall apply to the specific Sales Contract signs between Seller and Buyer and shall come into effect upon agreed in written. When the Terms & Conditions apply to a specific order, modifications of or deviations from them must be agreed in written form under individual Sales Contract as specific Terms & Conditions.

1 Scope of Supply

1.1 The Seller agrees to supply, and the Buyer agrees to buy from the Seller the goods specified in individual Sales Contract (“Goods”). The obligations of the Seller to supply the Goods shall be expressly limited to scope in the individual Sales Contract and relevant technical specifications set out in Appendix.

1.2 Any changes to the Scope of Supplies shall be subject to mutual agreement in writing by both Parties.

2 Contract Price

2.1 The total Contract price for supply of the Goods is stated in the Sales Contract.The above-mentioned Contract Price is firm and fixed. During the entire period of performance, it is fixed, unless otherwise specified or scope of supply and specification of Goods need to be changed.

2.2 Notwithstanding the price listed hereunder when the PO effective, during the term of PO if any Force Majeure event of Article 14 happens, which include but not limited to the outbreak of a Coronavirus (commonly known as COVID-19) or any mutation of such virus, and/or the situation related to the tensions international situation other than Force Majeure, and/or general shortage of commodity supplies in the market (hereinafter refer to as “Affected Events”), which are or may impact normal business and execution of the Sales Contract and/or PO. The Parties agree that ABB is entitled to notice the Buyer according to this GTC of Affected Events, and ABB is also entitled of the adjustment of price, and/or time extension, and/or any other reasonably required contract adjustments, if any consequences resulting out of, or in connection with said events, lead to delays in delivery of Goods or provision of Services or otherwise affect ABB’s contractual obligations or duties. The adjustment shall be agreed by both Parties in written.

3 Tax

All taxes in connection with the execution of the Sales Contract levied by the Buyer shall be borne by the Buyer; all taxes in connection with the execution of this the Sales Contract levied by the Seller shall be borne by the Seller.

4 Terms of Delivery and Passing of Risk

4.1 Unless otherwise specified in the Sales Contract, the delivery shall be Ex woks (EXW).

4.2 Unless otherwise specified in the Sales Contract, the Buyer will pick up Goods at the Seller’s premises, and arranges detailed issues of transportation at its own risk and expense.

4.3 No matter whether the Buyer picks up Goods on confirmed delivery date or not, risk of damages of the Goods shall be transferred to the Buyer at the end of the business hours of delivery date agreed in the Sales Contract. The Buyer agrees and confirm that the ownership of Goods shall remain with the Seller until the Buyer has paid the full contract price. In the event of late pickup caused by the Buyer, the Seller reserves the right of lodgment, and the Buyer shall undertake all expenses and risks thus incurred.

5 Liquidated damages

5.1 Should the Seller fails to deliver Goods on time for its own reason other than the Buyer’s breach or any of the circumstances referred to in Clause 11, the Buyer shall agree to postpone the delivery time, and be entitled to request the Seller pay liquidated damages for delayed delivery, but the BUYER must send notice for breach in writing to the Seller immediately. The liquidated damages shall be charged at rate of 0.5% of the amount of the delayed Goods for every seven days, however, the liquidated damages shall not exceed Five percent (5%) of the total value of the Goods involved in the part of late delivery.

In the event the Seller fails to make delivery within Ten (10) weeks after delivery time stipulated in Contract or the longer time agreed by the Buyer, and the liquidated damages that are entitled to be requested by the Buyer shall be aggregated up to the maximum, the Buyer shall send written notice to clarify the grace period not less than Seven (7) days as final period, requesting the Seller make delivery within the final time limit. In the event the Seller still fails to make delivery within final period, then the Buyer shall be entitled to terminate all or part of Contract in written notice. Both parties shall sign a supplementary agreement to terminate the contract to clarify relevant matters.

The aforesaid liquidated damages for delay shall be the Buyer’s exclusive remedy for delayed delivery of Goods due to breach of obligation relating to delivery.

5.2 Shall the Buyer postpone the delivery date due to the Buyer’s responsibility or failed to accept goods on time according to “shipping notice” which arranged by the Seller, Buyer may require for the extension of Sales Contract, or Seller shall have the right to arrange storage and custody of Goods on behalf of the Buyer at the Buyer’s expenses and risk of the goods. The Buyer agrees to pay liquidated damages to the Seller for the late collection according to below clause. The rate of the liquidated damages is 0.5% of Contract price of the delayed goods per week and shall no exceed 10% of Contract price of the delayed goods. The Seller reserves the right to terminate the Sales Contract and dispose of the goods at its own discretion and to claim the Buyer for the cost loss if the Buyer delays delivery by more than 40 weeks. This liquidated damages with exception of force majeure causes specified in Clause 14 of this GTC.

6 Packing and Acceptance

6.1 Unless other method of shipment agreed in individual Sales Contract, the Goods shall subject to the Seller’s standard packing.

6.2 Within five(5) days after arrival of the Goods at place of destination, the Buyer shall forthwith inform the Seller in writing and conduct open-package inspection when representatives assigned by the Seller are present on site, and issue certificate of inspection proving that the Goods are in conformity with stipulations of the Contract in good conditions after inspection. Should any non-conformity in quality, type, specification, etc. with the Contract be found during open-package inspection and for the reason attributable to the Seller after confirmation by both parties, both parties shall countersign written file stating the above-mentioned inconsistency as evidence to request repair, replacement, or supplement of the Goods. In the event that the Buyer on its own conducts open-package inspection or dismantle package when representatives assigned by the Seller are not present on site, the Seller shall then be relieved of all warranty obligations. In the event that Buyer fails to inform the Seller of the inconformity of Goods within five (5) days after the delivery, the Goods shall be deemed as qualified for Acceptance.

7 Payment Terms

7.1 The payment terms and time of payment is stated in the individual Sales Contract. If no payment method is specifically agreed in Sales Contract, payment should be via telegraphic transfer (T/T).

7.2 Should the Buyer delay payment to the Seller not due to the fault of the Seller, the Buyer shall pay the Seller overdue interest on the delayed payment at the rate of 1.5% (one point five percent) per month.

7.3 If the Buyer fails to make any payment on time or make any full contracted payment on time, the Seller has the right to suspend its obligations stated in the Sales Contract after written notice to the Buyer, till the Seller receives full payment from the Buyer. If the Buyer still fails to make any payment in sixty (60) days from the due date, the Seller has the right to terminate the Contract by written notice to the Buyer and claim against Buyer compensation for the loss hereby incurred. The compensation shall not exceed the Contracted price. No matter if the Contract is terminated or not, the Seller has the right to pursue arrearage and interests and claim the compensation.

8 Warranty

8.1 Seller warrants that defects on quality occurred due to design, materials or manufacture shall be remedied pursuant to provisions of this Clause. Seller’s liability of warranty shall be limited to defects which happened within warranty period.

8.2 Unless otherwise agreed in individual Sales Contract, for products, the warranty period shall be twelve (12) months from date of commissioning, or eighteen (18) months from date of readiness for shipment, whichever is earlier. For spare parts, the warranty period shall be twelve (12) months from date of readiness for shipment, excluding fuse & switch purchased individually.

8.3 Should any defects be found during the warranty period due to faulty design, materials or manufacture, the Buyer shall forthwith inform the Seller in writing and specify quality issues in detail. After receipt of notice from the Buyer, the Seller shall promptly replace or repair defective Goods in free of charge. If the Buyer fails to inform the Seller any defects occurred during warranty period within two (2) weeks after the expiry of warranty period, the Buyer agree and confirm to waive its right to require Seller for remedy.

8.4 Under practical & feasible condition, repair shall be carried out by the Seller at the place where the Goods are installed. If it’s not practical and feasible hereof, the defective Goods shall be returned to the Seller for repair or replacement according to the Warranty Clause. In case there is only a part of the Goods needs to be repaired or replaced, the Seller is obliged to dismantle and reassemble the Goods if special knowledge is required. If such special knowledge is not required, the Seller has fulfilled his obligations in respect of the defect when a duly repaired or a new part in replacement of the defective part delivered to the Buyer. The Buyer agrees and confirms that whether special knowledge is required for dismantle and reassemble of the components involved shall be determined by the Seller according to the technical standards of the Goods.

8.5 The Buyer agrees and confirms that the replacement of spare parts within warranty period does not change the warranty period of the original Goods, but if the remaining warranty period of the original Goods is less than six (6) months, the new replacement of spare parts will still enjoy the warranty period of six (6) months. The Buyer agrees and confirms that the ownership rights of the Goods or parts with defective quality after replacement belongs to the Seller, and if the Seller is not responsible for the dismantle and assembly, the Buyer shall return the removed Goods or parts to the Seller at its own cost.

8.6 If the Buyer has given such notice as mentioned in Clause 8.3, and it turns out that the Seller is not liable for the defects, the Seller shall be entitled to require compensation from the Buyer for all costs incurred as a result of the notice.

8.7 The Seller’s liability of warranty shall be limited to the defects found under the normal conditions of operation provided in the Sales Contract and under proper use of the Goods.

The Seller’s warranty obligations do not apply for:

Damages or defects resulting from improper maintenance or use by the Buyer and/or 3rd parties;
Damages or defects resulting from repair, alteration or refit by the Buyer and/or 3rd parties without prior written consent of the Seller in writing;
Ordinary wear and tear of Goods;
Damages or defects resulting from improper operation, maintenance or service according to operation manuals and/or any other relevant instruction or statement or operation environment provided by the Seller due to causes attributable to the Buyer and/or third parties.

8.8 Seller’s liability for repair or replacement specified in Clause 8 is the exclusive remedy for defects of Goods for the Buyer due to breach of obligation relating to warranty attributable to Seller.

9 Service

9.1 The Seller shall render qualified technical engineers to the contractual site to provide site service for commissioning and instruction of installation or technical trainings according to individual Sales Contract. Service time shall be in accordance with the Contract and it is not a continuous work time, no more than eight hours a normal working day. At the request of the Buyer and the Seller consent, Service time could be prolonged, the Buyer should pay the extra expenses according to the Seller’s charging standard.

9.2 The Buyer should send the Seller written notice in seven (7) working days prior to the start time of Service. The Seller should complete on-site Service within the time limit stated in Contract. If the Seller fails to complete this Service due to own reason, the Seller shall extend the Service period until completion of the Service for free of charge. Service period extension is required for none Seller’s reason, the extra expenses will be charged according to the Seller’s annual Service charging standard. After the completion of the Service, the Seller does not undertake responsibility if the equipment cannot run normally that not due to the Seller’s causes.

9.3 The Seller is entitled to inspect the maintenance documents and other relevant running data, including recorder files, before providing Service. If the Buyer can’t provide support documents for daily maintenance or failure to meet the installation conditions, the Seller can refuse to provide Service, and the Buyer shall bear all the expenses (Including the above inspection expenses).

10 Effectiveness of the Sales Contract

10.1 The conditions of effectiveness shall subject to individual Sales Contract. After effectiveness of the Sales Contract, any alterations or amendments related to the Contract must be consent through negotiation, and come into force after agreement of amendment shall be concluded in writing by both parties.

10.2 Any party may refuse to consider any proposal from the other party to amend the Sales Contract if such proposed amendment would adversely affect the benefits that it expects to obtain under the Sales Contract unless the proposing party promises in writing to give full compensation to the other party.

11 Suspension and Termination of the Sales Contract

11.1 The Buyer may request suspension of the Contract by written notice to the Seller, stating the reason for such suspension and the expected date to resume the performance of the Contract. On condition that the Buyer agrees to bear the additional expenses incurred by the Seller due to such suspension, the Seller may at its sole discretion decide to agree to the suspension. If the suspension request was refused by the Seller, the Buyer shall continue to perform its obligations as specified in the Contract; otherwise, the Buyer shall be regarded as in breach of the Contract.

11.2 The Seller may suspend the delivery and other Contract obligations, if Seller does not receive the Advance payment from the Buyer as stipulated in the Contract. If the Contract is suspended in accordance with this clause, Buyer shall be liable for all costs and expenses borne by Seller as a result of such suspension.

11.3 The Seller may suspend the delivery and other Contract obligations, if any other payment specified in the Contract is not received within the time specified herein. If the Contract is suspended in accordance with this clause, Seller is entitled to retain the Advance payment as a remedy for the costs and expenses as a result of such suspension. If the losses and damages incurred to the Seller are not covered by the Advance payment, the Buyer shall further compensate the Seller for all the other losses and damages incurred as a result of the suspension.

11.4 If the Buyer is reasonably presumed from its activity that it will not perform its obligations hereunder on schedule, the Seller shall have the right to suspend performance of its obligations and the Buyer shall bear all the expenses and losses incurred as a result of such suspension.

11.5 In addition to the termination stated in Article 14, upon the occurrence of any one of the following events, either party may at any time by written notice to the other party terminate this Contract and/or specific order under this Contract：

Any party of the Sales Contract commits a material breach and such breach, if remediable, is not remedied within 30 (thirty) days after receipt by the party in breach of a written notice;
Any party of this agreement becomes bankrupt or insolvent or ceases to carry on business or becomes unable to pay its debts;
If it becomes illegal for any party to perform this agreement and/or specific Sales Contract under this agreement.

11.6 In case the Sales Contract is terminated under the above Article 11.5, the defaulting party shall pay to the other party any losses incurred in connection with the termination of the Contract.

11.7 If the Sales Contract needs to be cancelled by the Buyer, the Seller has the right to claim from the Buyer as below:

Termination or Cancellation is required within thirty (30) days after the Sales Contract become effective, the Buyer should compensate the Seller 25% of the total canceled value of the Sales Contract;
Termination or Cancellation is required thirty (30) days after the Sales Contract become effective and within sixty (60) days, the Buyer should compensate the Seller 50% of the total canceled value of the Sales Contract;
Termination or Cancellation is required within sixty(60) days before the Contact’s shipment readiness, the Buyer should compensate the Seller 75% of the total canceled value of the Contract.

If the losses and damages incurred to the Seller are not covered by the above cancellation charges, the Buyer shall further compensate the Seller for all the other losses and damages incurred as a result of the cancellation.

12 The Seller’s Limitation of Liability

12.1 Notwithstanding anything contained in the Sales Contract or PO to the contrary, the Seller shall not be liable for loss of profit or expected profit, or any expenses related to any party’s business or other matter, any investment, rent or any other type of commitment, or any kind of indirect, special, collateral and/or consequential damage or loss of any nature whatsoever (collectively refer to as “Consequential Damages”). The Seller shall in no event undertake any kind of Consequential Damages towards the Buyer for the termination of this Agreement or any other causes, and the Buyer hereby waive any and all rights related to the Consequential Damages.

12.2 Notwithstanding anything contained in the Sales Contract or PO to the contrary, the liability of the Seller with respect to any and all claims arising out of the performance or non-performance or non-performance of obligations under the agreement shall not exceed in the total value of the individual Purchase Order price.

13 End-Use Statement and Export Compliance

13.1 The Buyer acknowledges that the supplies of the Goods under the Contract may be subject to statutory regulations regarding export compliance in the Seller’s country and, without export authorizations from the competent authorities, may not be sold, transferred or used for a purpose other than that agreed upon. Any such export compliance or restrictions which substantively impede the Seller from performing its obligations under the Contract shall release the Seller from the obligations of supplying the Goods herein.

In case that the products purchased by signed Buyer through Seller shall be exported to third country finally, while export declaration for products with ABB logo shall be conducted by third Party instead of ABB, in accordance with “Regulations of the People’s Republic of China on Customs Protection of Intellectual Property Rights”, Customs shall be entitled to conduct random sample on the aforesaid goods. The Buyer has obligation to provide ABB the information of end-use situations and Country/Area of destination, etc. before signing Contract with ABB, as well as complete & accurate information of related export & final application which are necessary for declaration before such export declaration, so that ABB shall follow corresponding export formalities of record in advance for ABB authorized products, which are purchased through ABB formal channel. In the event of changes to be made for the aforesaid information of final application & export, the Buyer shall inform ABB without delay.

The Buyer undertakes and warrants that it shall not do any export business with respect to any products, components, spare parts and Service of ABB directly or indirectly in the following countries: Belarus, Cuba, Iran, North Korea, Russia, Syria and the Crimea, and Donetsk, Luhansk, Kherson and Zaporizhzhia regions of Ukraine.

The Buyer acknowledges that such statutory regulations regarding Safety and Trade Compliance may change from time to time and are applicable to the order under Sales Contract according to the wording valid at the time.

13.2 The Buyer further represents and warrants that the Goods provided under this Agreement and the Sales Contract shall not be installed, used, or applied in or in connection with:

the design, production, use or storage of chemical, biological or nuclear weapons or their delivery systems; or
any military applications; or
the operation of any nuclear facilities including, but not limited to, nuclear power plants, nuclear fuel manufacturing plants, uranium enrichment plants, spent nuclear fuel stores and research reactors, without the prior written consent of the Seller.

14 Force Majeure

14.1 “Force Majeure” means the occurrence of an event or circumstance (“Force Majeure Event”) that prevents or impedes a party from performing one or more of its contractual obligations under the Contract, if and to the extent that the party affected by the impediment (“the Affected Party”): a) that such impediment is beyond its reasonable control; and b) that it could not reasonably have been foreseen at the time of the conclusion of the Agreement; and c) that the effects of the impediment could not reasonably have been avoided or overcome by the Affected Party. The Force Majeure Event include but not limited to Natural disasters, wars, regional conflicts, terrorist acts, riots, earthquakes, typhoons, floods, fires, plagues, epidemics, pandemics include COVID-19, government actions, trade compliance, etc. and other event caused by the major change of applicable laws and regulations.

14.2 In the event of the occurrence of above-mentioned Force Majeure Event which cause the Affected Party unable to perform its obligations under the Sales Contract, the Affected Party shall notify the other party without delay, the notice shall in written form and shall clearly state the actual impact of the Force Majeure Event. Both Parties will negotiate based on the actual impact to mutually decide whether and how to extend certain part of the Sales Contract and other reasonable measures to prevent the expand of loss.

14.3 Any delay or failure in performance caused by the Force Majeure Event to the Affected Party shall not be recognized as breach of Sales Contract and shall not cause the Affected Party to undertake any compensation liability of damages, losses or fines in any kind. Under this circumstance, both Parties are still obliged to take reasonable and applicable measures to continue the performance of the Sales Contract and PO. In the event that the suspension of Sales Contract or PO more than six months and both Parties fail to reach any fair solution to continue the performance, then any Party is entitled to notify the other Party to terminate the Sales Contract and the affected PO.

15 Intellectual Property Right

15.1 Except for the explicit exceptions given in the Sales Contract, all intellectual property rights (including, but not limited to, patent, patent application, know-how, business secret, confidential information, design right, copy right, whether registered or not) of the Seller, the Seller’s suppliers, or the Buyer existing before the signing of this Contract shall remain with the original owner. The Seller shall have the ownership to any intellectual property rights arising from the Seller’s design during the fulfillment of this Contract. There is no license, express or implied, and no transfer of intellectual property right, by virtue of this Contract.

15.2 The Seller agrees to indemnify the Buyer with respect to any suit, claim, or proceeding brought against the Buyer alleging that the Buyer’s use of the Equipment constitutes an infringement of any intellectual property rights existing at the time of delivery (“Infringement Claim”). The Seller’s indemnity obligations under this Article are subject to the following conditions:

The Buyer shall promptly advise Seller of any Infringement Claim;
The Buyer shall provide full cooperation to the Seller in connection with the Infringement Claim;
The Buyer shall permit the Seller to have sole control of the defense or settlement of any Infringement Claim; and
The Buyer shall not settle any Infringement Claim itself without the Seller’s written consent.

15.3 The Seller’s indemnity obligations under this Article 15.2 shall not apply to Infringement Claims if the Seller’s Equipment is :

manufactured, designed or supplied by the Seller in accordance with any design or special instructions provided by the Buyer;
used by the Buyer in a manner or for a purpose not contemplated by the Seller and/or by this Contract;
modified by the Buyer where such modification is not authorized by the Seller; or
used by the Buyer in combination with other products not provided by the Seller where the infringement arises from such combination.

15.4 If an Infringement Claim occurs and the conditions under this Article 15.2 and 15.3 are fulfilled, the Seller shall, within a reasonable time, at his option for any one of the following measures which will substitute the monetary compensation to the Buyer:

provide for the Buyer the right to continue to use the Equipment,
change the Equipment so that the infringement ceases, or
Replace the Equipment with other product with an equivalent function, the use of which does not result in an infringement.
Remove the equipment and refund the purchase price all in lieu of the monetary damages payable to the Buyer.

16 Confidentiality

16.1 “Confidential Information” means any trade secret as defined in the Anti-unfair Competition Law of the People’s Republic of China, and any other knowledge and/or information of a Party (as “Discloser”) which is disclosed or made available to the other Party (as “Recipient”) in oral, written or any other form.

16.2 Recipient acknowledges the proprietary and confidential nature of Confidential Information and agrees that all rights to and concerning Confidential Information remain vested in Discloser, in particular with regard to Intellectual Property Rights.

16.3 Recipient shall be released from the obligations of strict confidentiality if Confidential Information:

is at the time of disclosure to Recipient, or which thereafter becomes, in the public domain without breach of any confidentiality obligation by Recipient or any third party;
was known to Recipient prior to its disclosure by Discloser and is subject to no confidentiality obligation to any third party; and
is made available to Recipient free of confidentiality obligation by a third party without breach of any confidentiality obligation.

In such exceptional cases Recipient may also make unrestricted use of such Confidential Information unless the latter otherwise enjoys legal protection. The burden of proof rests with the Recipient.

16.4 Unless otherwise specified in writing, all documents and materials containing any Confidential Information shall remain the property of Discloser. Upon request by Discloser, Recipient agrees to return all Confidential Information in its physically fixed form without retaining any reproduction. As far as Confidential Information is stored in data processing machines or on the data carriers thereof, such Confidential Information must be deleted at Discloser’s demand in an unrecoverable way and Recipient must confirm such deletion by writing.

16.5 Neither of the parties shall be allowed to disclose the content of the Contract and any confidential information including technical & commercial data it obtains from the other Party during the conclusion & performance of this Contract to third Party or use the aforesaid information for purposes other than performing this Contract without the prior written consent from the other Party.

17 Compliance and Integrity

The Buyer hereby warrants that it will comply with the provisions and requirement of Appendix I: ABB Integrity Provisions, Commercial Ethics and Commitment Letter, and confirm that by signing the Sales Contract and this GTC the Buyer has duly signed the Commitment Letter in Appendix I. In the event that any violation of Appendix I by the Buyer, the Seller is entitled to ask the Buyer to rectify and reform within reasonable period, if the Buyer is unable to fulfill the requirement of Appendix I, then the Seller is entitled to terminate the Sales Contracts and the PO with immediate effect of its own discretion.

18 Applicable Law & Settlement of Dispute

18.1 Conclusion, effectiveness, explanation & implementation in connection with this Contract and all disputes incurred in the Contract shall be governed by Law of the People’s Republic of China.

18.2 All disputes in connection with the Contract due to implementation & explanation shall be settled between the both parties through friendly negotiation in first of all.

18.3 Should no settlement be reached through friendly negotiation within sixty (60) days after disputes happened, either party shall have the right to submit such dispute to arbitration by the China International Economic and Trade Arbitration Commission, in accordance with the arbitration rules of the Commission as at present in force in Beijing. The arbitration result is final and binding upon both parties. The arbitration expenses shall be borne by the losing party unless otherwise awarded by the Commission.

19 Miscellaneous

19.1 The heading contained in the Contract are for reference only and shall not affect the meaning or interpretation hereof.

19.2 This Contract constitutes the entire agreement relating to topics of the Contract, and shall supersede all discussions, negotiations & agreements made for the purpose of topics of the Contract before the conclusion of the Contract.

19.3 The provisions contained in this Contract comprise the whole of the agreement between the parties with respect to the supply of Goods specified herein and no other terms or conditions shall be included or implied unless agreed upon in writing and signed by the authorized representatives of both parties.

19.4 This Contract is signed for the benefit of, and binding upon both parties and its lawful successors and assigns.

19.5 Without prior consent from the Seller, the Buyer shall not be allowed to assign any of its right and/or obligation to a third party under this Contract in whole or in part.

19.6 Unexercised or delay to exercise any power, rights or remedy under the Sales Contract by one Party shall not be deemed as the waiver of such power, rights or remedy; singly or partly exercise any power, rights or remedy shall not exempt the Party from further exercise the said power, rights or remedy, nor shall it affect the exercise of the Party for any other power, rights or remedy.