General Terms of Business to be used in the EU

Edition 09/2018

1. Scope and form

These General Terms of Business (“GTB”) shall apply to all business transactions between DILO Armaturen und Anlagen GmbH (“DILO”) and their customers (counterparties). The GTB only apply where the counterparty is an entrepreneur (in the meaning of Article 14 of the German Civil Code [BGB]), a public law body corporate or a special fund under public law.
The GTB shall apply in particular to contracts of sale and/or delivery of movables (“Goods”) and services by DILO or by a third party on behalf of DILO, notwithstanding whether the concerned Goods are manufactured independently by DILO or purchased from suppliers (Articles 433, 651 of the BGB).
These GTB shall find exclusive application. Any deviating, conflicting or supplementary general business terms of the counterparty may only form an integral part of the contract insofar as DILO explicitly approve their applicability. This approval requirement shall also apply to all situations where, for example, DILO deliver or have delivered the Goods to the counterparty without any reservations and with acknowledgement of the counterparty's general business terms.
Individual arrangements made with the counterparty on a case-by-case basis (including supplementary agreements, addenda and amendments) shall prevail over these GBT in any case. A written contract or a written approval by DILO shall be decisive in respect to the contents of such arrangements in the absence of any evidence to the contrary.
The counterparty’s clarifications and notices concerning the contract (for example, deadlines, notices of defects, withdrawal or reduction) shall be given in writing (for example, by post, email, fax).

2. Contract conclusion

Offers are non-binding and conditional. This rule also applies where DILO give the counterparty catalogues, technical documentation (such as drawings, plans, calculations, references to DIN standards), other product specifications or documents (also made available in electronic form) to which DILO have reserved intellectual rights and copyright.
A purchase order placed by the counterparty for any goods/services is a binding offer of a contract.
The purchase order may be accepted either in writing (for example, through an order confirmation) or by means of delivering the goods or the services to the counterparty.
The contract acceptance shall be subject to non-existence of any obstacles thereto under national and/or international laws and in particular under the US re-export/export control regulations and embargoes or other national or international restrictions on exports.
The counterparty shall comply with the applicable national or international export control laws and regulations (and in particular with the US re-export/export control regulations), if feasible for the counterparty, in case of resale or transfer of any DILO products (“DILO Products”) to a third party. In any case, the counterparty shall take into account and comply with the re-export control regulations of the Federal Republic of Germany, of the European Union and of the United Stated of America, if feasible for the counterparty, when reselling DILO Products to a third party.
The counterparty shall be under an obligation to DILO in particular to verify and to ensure by means of appropriate measures in case of resale or transfer of DILO products to a third party:

a. compliance with the provisions, terms and conditions of the currently applicable sanction lists of the European Union and of the United States of America, if feasible for the counterparty, regarding transactions with the listed companies, persons or organisations;

b. the counterparty’s non-infringement against the embargo imposed by the European Union, the United Stated of America, if feasible for the counterparty, and/or the United Nations when selling or transferring DILO Products or delivering any services to a third party with regard to these products - also with account of possible restrictions on transactions inside Germany and possible circumvention bans; and

c. in particular, non-provision of DILO Products to a third party for any military or explicitly prohibited purposes or for any purposes subject to an approval and relating to armaments, nuclear technology or weapons - other than where the required approvals are in place and do not infringe against any other currently applicable international sanction regulations.
In case of an export control inspection in DILO or an external request from authorities, the counterparty shall provide, without undue delay and on request of DILO, all information and/or documents available to the counterparty regarding:

a. the end recipient,
b. the end destination and
c. the intended use

of DILO Products delivered to a third party by the counterparty or of the services provided by the counterparty in this respect as well as regarding the applicable export control restrictions.
The counterparty shall defend and hold DILO harmless without delay and to the fullest extent possible from any claims given to DILO by authorities or other third parties because of non-compliance with or infringement against the above-mentioned export control obligations, and indemnify DILO for the latter’s entire damages and expenses caused by such claims (attorney fees, etc.). DILO is entitled to request advance payments.
If the counterparty requests direct delivery from DILO to a third party (counterparty’s customer), the counterparty shall make available to DILO in particular the audit results as per Clauses 6 and 7 as well as information regarding the end user, the end destination and the intended use before such delivery. If the delivery infringes against the applicable national and international (particularly the US re-export/export control regulations, DILO shall become entitled to withdraw from the contract with the counterparty and to claim damages from the counterparty for an infringement against the export control obligations as mentioned before in point (8).

3. Delivery terms and delay

The delivery terms will be agreed on a case-by-case basis or made known by DILO upon acceptance of the order (order confirmation).
If DILO is not able to meet a binding delivery deadline for reasons not attributable to DILO (service non-availability), DILO shall notify the counterparty thereof without delay and set a new estimated delivery deadline, if possible. If the service is not available, DILO shall become entitled to withdraw from the contract in part or in full; DILO shall return all payments already made by the counterparty to the latter without delay. For the purposes hereof, a service is deemed to be not available in particular where a supplier of DILO fails to make a timely delivery to DILO in a situation where DILO entered into a matching cover transaction, or where the failure is caused through no fault of DILO or its suppliers, or where DILO is under no obligation to make the delivery.
The applicable law shall be decisive for determination as to whether DILO is in delay with the delivery. In any case, the counterparty shall give [DILO] a reminder notice.

4. Delivery, transfer of risks, acceptance, late acceptance

The shipment is FCA Babenhausen (Incoterms 2020), which is also the delivery place or the subsequent delivery place, if applicable. The Goods can be shipped to another destination (sale with shipment to a destination other than the delivery place) on the request and at the expense of the counterparty. Unless explicitly agreed otherwise, DILO may independently choose the shipment form (and in particular the carrier, shipment route, packaging). The packaging is non-returnable.
In case of a shipment made inside the EU to another EU member-state, the counterparty shall provide the required documents (in particular, the confirmation of arrival) without delay (and in any case within 3 months) to enable use of the VAT exemption. Unless such documents are made available to DILO, DILO has to include VAT payable at 19% in the invoice.
The risk of accidental loss and damage is transferred to the counterparty not later than the transfer of the Goods. In a sale with shipment to a destination other than the delivery place, the risk of accidental loss or damage of the goods and the risk of delay is deemed transferred [to the counterparty] when the Goods are delivered to the forwarder, carrier or any other party or agency engaged to ship the Goods. If the parties agree on acceptance of the Goods, acceptance of the Goods shall be decisive for the transfer of risks. If the counterparty fails to accept the Goods/service on time, the risks shall be deemed transferred to the counterparty.
Major emergencies (such as force majeure, labour disputes, civil unrest, war, hostilities or terrorist acts) with unpredictable consequences for the deliveries shall release the counterparties from their respective obligations for the duration of and within the scope affected by such events - even where the counterparties are in delay. This [release] is not associated with automatic termination of the contract. The affected party shall notify the counterparty of such events and the parties shall adjust their obligations to the changed circumstances in good faith.
If the counterparty delays acceptance of the delivery, or fails to cooperate, or the transfer of the delivery from DILO is delayed for other reasons attributable to the counterparty, DILO shall become entitled to claim damages incurred for that reason, including additional costs (e.g. warehousing costs, customs duties and other duties as mentioned in clause 5 (3)).

5. Import licence, importability and export expenses

The counterparty shall obtain the import licence as well as all required approvals, certificates or other documents for the importation of the Goods in the country of destination and their transit through third countries, if applicable. The risk of import restrictions in existence as of the date of the purchase contract is with the counterparty.
The risk of subsequent import restrictions is with the counterparty only insofar as such risk is identifiable upon careful examination as of the date of the purchase contract. In case of a dispute the counterparty has to prove that it has taken all reasonable and required measures to perform such examination.
All expenses, customs duties, taxes, levies, etc. associated with exportation and importation shall be at the counterparty’s expense.

6. Prices and payment terms and conditions

Unless agreed otherwise on a case-by-case basis, DILO prices in effect as of the contract date shall apply solely as EUR prices FCA Babenhausen (Incoterms 2020) plus applicable VAT, if any.
In a sale with shipment to a destination other than the delivery place (Clause 4(1)), the costs of shipment shall be borne FCA Babenhausen (Incoterms 2020) by the counterparty as well as the costs of insurance cover, if such insurance cover is requested, and in this case, it shall be at the counterparty’s expense as well. All customs duties, levies, taxes and other official charges shall be at the expense of the counterparty.
DILO reserves the right to charge the minimum shipment value surcharge in case of orders with the total net value of the Goods below EUR 50,-.
The purchase price shall be payable in accordance with the agreed payment terms and conditions on the basis of the order confirmation given by DILO. However, DILO reserves the right to make their deliveries subject to advance payment in part or in full at any time - also in the course of ongoing business relations. DILO shall make such reservation known not later than with the confirmation of the purchase order.
The counterparty shall be deemed in delay with payment upon expiry of the above-mentioned payment term. Penalty interest shall accrue at 10% on the purchase price for the duration of the delay with its payment. DILO reserves the right to claim further damages caused by the delay.
The counterparty may claim offsetting or retention solely to the extent the counterparty’s claims have been established as legally valid or undisputable. The counterparties rights and in particular the rights arising from Clause 8(6) Sentence 2 hereof shall not be affected in case of a defective delivery.
Should it become apparent after the contract is concluded that the claims of DILO for payment of the purchase price are exposed to the risk of unenforceability because of the counterparty's inability to pay (e.g. because of a petition filed for instituting of insolvency proceedings), DILO shall become entitled to refuse to make deliveries under the contract and to withdraw from the contract upon expiry of the period of notice, if necessary, in accordance with the law (Article 321 of the BGB). DILO shall be entitled to withdraw from the contract with immediate effect in case of contracts for manufacturing of made-to-order Goods (items made to the customer’s specifications).

7. Retention of Title

DILO retains the title of ownership to the sold goods (retention of title) until full settlement of all current and future amounts receivable by DILO and arising from the purchase contract and the on-going business relationship (secured amounts receivable).
The Goods subject to retention of title may not be pledged or transferred as collateral to secure any obligation to a third party until the secured amounts receivable are settled in full. The counterparty shall notify DILO accordingly in writing without delay if a petition is filed for instituting insolvency proceedings or if a third party gains access to the Goods owned by DILO (e.g. by way of seizure of the Goods).
If the counterparty is in breach of the contract and in particular if the counterparty does not pay the outstanding purchase price, DILO shall become entitled to withdraw from the contract in accordance with the statutory provisions and/or to request return of the Goods by virtue of the retention of title. Such request to return the goods shall not be deemed to mean a simultaneous withdrawal notice; on the contrary, DILO shall be entitled to request solely the return of the Goods and to reserve the right to withdraw from the contract. Unless the counterparty pays the outstanding purchase price, DILO may assert these rights – but only after an appropriate term for payment has been set by DILO and this term expires without effect or where law does not require setting such a term.

8. The counterparty’s defect claims

Unless otherwise stated herein below, the rights of the counterparty shall be governed by statutory provisions in case of defects of material and defects of title (including incorrect or incomplete delivery, faulty assembly or inadequate assembly instructions).
The guarantee (Gewährleistung) period is twelve (12) months beginning on the delivery day and not interrupted by subsequent improvements or rectifications, if any.
The basis for the liability of DILO for defects is first of all the agreement concluded in respect of the quality and condition of the goods. All product descriptions which are the subject matter of the contract concerned or have been made public by DILO (in particular in the catalogues or at DILO website www.dilo-gmbh.com) shall be deemed to form an agreement regarding the product quality.
If no agreement has been made regarding the quality and condition of the Goods, statutory provisions shall be decisive for the determination as to whether the Goods are defective. Nevertheless, DILO disclaim any liability for any public statements (e.g. advertising messages) made by the manufacturer or another third party.
The counterparty may give a liability claim for defects solely provided that the counterparty has fulfilled the obligation to inspect the goods and to give a claim notice. If a defect is detected during the delivery or inspection of the Goods or at a later stage, it shall be notified to DILO in writing without delay. In any case, obvious defects shall be notified in writing within five working days of the delivery and defects not detected by the inspection shall be notified in writing within a similar same period of the detection thereof. If the counterparty fails to perform the inspection and/or to notify the defect in due course, DILO shall be exempted in accordance with the statutory provisions from any liability for the defects notified late or with infringements against the notification procedure.
If the delivered Goods are defective, DILO may initially choose to remedy the defect by means of either its elimination (rectification) or delivery of defect-free replacement Goods (replacement). This shall be without prejudice to the right of DILO to refuse rectification in accordance with the statutory requirements.
DILO shall be entitled to make the rectification of defects subject to payment of the outstanding purchase price by the counterparty. However, the counterparty shall be entitled to withhold a portion of the purchase price that is commensurate with the defect, provided that the defect is acknowledged by DILO.
The counterparty shall give DILO the time and opportunity necessary to rectify the defect; in particular the counterparty shall submit the Goods covered by the defect claim to DILO for inspection. In case of replacement, the counterparty shall return the defective Goods to DILO in accordance with the statutory provisions. The rectification shall not be deemed to include dismantling of the defective Goods or reassembly thereof into defect-free Goods, unless DILO was originally obliged to perform the assembly.
The necessary costs associated with the inspection and rectification and in particular the costs of transportation, customs duties and charges, road charges, labour costs and costs of materials shall be at the expense of DILO in accordance with the law, if the defect is actually in place. Otherwise, DILO may request the counterparty to reimburse the costs arising from the unwarranted request for rectification of a defect (in particular inspection and transportation costs).
The counterparty may assert claims for damages or refund of futile expenses only according to Clause 8 hereof – even in case of defects; any such claims are excluded otherwise.

9. Other liability

Unless these GTB including the provisions below say otherwise, DILO may only be held liable for breach of contract and extra-contractual obligations in accordance with the law.
DILO may only be held liable for damages – irrespective of their legal grounds – concerning the liability in torts in case of intent and gross negligence. In case of slight negligence, the liability of DILO shall be governed by legal provisions (e.g. standard of prudence and care in own affairs) – subject to a more lenient standard of liability – and apply only to:

a. damage arising from injury to life, limb and health,
b. damage caused by material breach of a material contractual obligation (i.e. obligation whose fulfilment is a basic condition prerequisite for proper execution of the contract and on whose fulfilment the contractual counterparty generally relies and should rely); in such situations, however, the liability of DILO shall be limited to reimbursement for foreseeable and typical damage.
The liability limitations as per Clause (2) hereof shall also apply to breach of duty by or on behalf of the persons for whose faults DILO is responsible in accordance with the law. These limitations shall not apply if DILO conceal a defect in bad faith or assume warranty obligations for the quality and condition of the Goods; neither shall they apply to claims given by the counterparty under the German Product Liability Act.
The counterparty may withdraw from or terminate the contract due to breach of duty other than a defect only where such breach is attributable to DILO. The counterparty’s unrestricted right to terminate the contract shall be excluded. The statutory requirements and legal consequences shall apply in all other respects.

10. Claim limitation period

The general limitation period for claims concerning defects of material and defects of title is one year beginning on the delivery day. Where acceptance of the Goods is agreed, the limitation period begins on the day of acceptance of the Goods.

11. Governing law and jurisdiction

These GTB and the contractual relationship between DILO and the counterparty are governed by German law to the exclusion of the UN Convention on the International Sale of Goods.
The exclusive place of jurisdiction for all disputes – including international disputes – directly or indirectly arising from the contractual relationship is the competent court for the place of business of DILO in Babenhausen. However, DILO shall be entitled in any case to bring an action claim at the delivery place of the delivery obligation in accordance with to these GTB or an overriding individual arrangement, or at the general place of jurisdiction of the counterparty. The foregoing shall be without prejudice to any overriding statutory provisions, including but not limited to those regarding exclusive competence.

Rules

General Terms of Business to be used in the EU

Edition 09/2018