1.1 These standard conditions of purchase alone shall apply to any purchase of goods by Mcogroup Global Development (Hong Kong) Limited (MCO) from Supplier; any countervailing or different conditions shall have no validity unless MCO has given its written assent tosaid conditions on an exceptional basis. Any different or additional terms and conditions in any order confirmation or otherSupplier document are hereby expressly rejected.
1.2 Any and all collateral agreements are, as a general rule, to be made in writing. Verbal agreements shall be binding only ifconfirmed in writing by at least one party without delay, but within 48 hours at latest. If a written agreement is modified retrospectively, the written confirmation is to make explicit reference there to.
2.1 For the entire period during which the ordered goods are sold to the final customer, the Supplier is prohibited from supplying directly or indirectly to third parties any of the articles in the same form or a similar form or design that may cause confusion. Brand name articles that have not been specially produced for MCO shall be excepted.
2.2 All information made available to the Supplier by MCO shall be treated confidentially as a trade secret by the Supplier and its officers, directors and / or employees. This includes drawings, samples and any other information regarding the characteristics of theordered goods. Such information shall not be divulged in any manner to any third party without the written consent of MCO, except to the extent that the divulgence of such information shall become necessary for the Supplier to perform its obligations under this agreement or in any litigations concerning the provisions of this agreement.
3.1 The articles ordered by MCO must be supplied in a condition that fully corresponds to the samples, i.e. they must correspondto the description as well as those samples previously submitted and approved by MCO in terms of their technical features,form, workmanship and design and they must exhibit the qualities as guaranteed. Furthermore those articles ordered by MCO must be supplied in a condition that fully corresponds to the released material composition submitted and approved by MCO interms of their material / accessories composition. All the technical characteristics, workmanship and appearance of the samples and material composition approved and released by MCO shall be construed as guarantees of workmanship.
3.2 The Supplier is under obligation to perform a final inspection prior to delivery to MCO. Any deviations from the samples approved by MCO must be approved in writing by MCO prior to delivery.
3.3 Any claim by MCO against the Supplier for breach of warranty becomes time-barred within three years after theexpiration of the year in which MCO became aware or without gross negligence would have become aware of the identity ofthe obligor and the circumstances which constitutes the claim. Longer statutory limitation periods shall not be affected.
The stipulated prices are deemed to include the packaging required by MCO or for shipping. The prices agreed in the order shallbe binding for the entire period during which the ordered goods are sold by MCO. This shall also apply to any follow-on orders.
The labeling, packaging and shipping of the merchandise must comply in every way with the packaging and shipping instructions provided by MCO. In the absence of specific instructions, the labeling, packaging and shipping of the merchandise shall be effected as required for shipment and with the due care and diligence of a prudent businessperson.
6.1 All of our delivery dates are binding. The Supplier shall be obliged immediately to notify MCO in writing should circumstances change or become apparent to him as a consequence of which the agreed delivery deadline is no longer tenable.
6.2 (a) Should the supplier be in default, MCO shall be entitled to the statutory remedies. In particular, MCO shall be entitled todemand compensation in lieu of performance and withdraw from the cont ract af ter having first given reasonablenotice, to no avail. In such event, MCO specifically has the right to make covering purchases and to charge the additional cost to the Supplier.
(b) In addition to the statutory remedies MCO may demand from its Supplier the following penalties for late delivery as mutuallyagreed in the order:
6.3 MCO may accept merchandise delivered late by submitting a written declaration to such effect to the Supplier. Moreover, in this case, the rights to claim damages caused by delayed performance and due to defective or incomplete goods are reserved.
6.4 The Supplier is not entitled to make performance of an initial order prior to the stipulated time.
6.5 Payment obligations of the Supplier in conjunction with orders placed by MCO are always due immediately.
If not agreed otherwise the Supplier is under obligation to deliver the merchandise which has been ordered at its own costand its own risk to the warehouse designated by MCO. However, should it be provided in the order or in a supplemental provision in the forwarding instructions or routing order that the merchandise is to be collected from the Supplier by MCO authorized shipper at its own cost, then the risk shall pass at the proper delivery of the merchandise to its authorized shipper in accordance with the packaging and forwarding instructions.
The Supplier shall submit its invoices in quadruplicate. The address of the recipient of the shipments must be designated in theinvoice. In the event that the shipment has been delivered to several different recipients, individual invoices are to be issued.Original invoices must not accompany the shipments. Each invoice must show articles from only one purchasing division.The invoices must contain the following information: supplier identification code (LKZ), order number, order date, a descriptionof the goods, type of shipment, number of units (packages), delivery note number, MCO article number(s), design, color, size andquantity, gross and net weight, Supplier’s invoice and tax number, and any registration number required by law in the countryof destination as specified in the relevant purchase order.
Supplier may not delegate or assign any of its rights or obligations hereunder or relating to the subject matter here of or any
goods furnished to MCO.
10.1 As a general rule, payment is to be effected in accordance with the terms cited in the order and, in every case, only after the receipt of the goods or, if cash against documents has been agreed, once the documents have been submitted to MCO.
10.2 The dispatch of means of payment or the submission of the payment order to the bank shall be relevant for determiningcompliance with the time limit for payment. Payment and discount periods shall not commence until both the merchandise hasbeen received in the agreed warehouse and the invoice has been received by MCO in its supplier trading division.
10.3 For acceptance of goods under initial orders determination of the deadlines pursuant to Clause
10.2 shall commence onthe agreed delivery date.
10.4 In the event of late delivery the number of days late shall be added on to the start of the deadlines under Clause 10.2.
10.5 MCO has the right, but is under no obligation to offset claims against the Supplier with claims of the Supplier against MCO.
10.6 MCO is entitled to pay invoices from Suppliers in the Federal Republic of Germany by means of a three-month bill of exchange that is free of expenses for the Supplier. This shall not affect the terms of payment.
10.7 The payment of invoices shall be effected without prejudice to the subsequent exercise of rights. Specifically, thepayment does not constitute the acknowledgement of an obligation to pay or of having ordered the merchandise, or confirmationthat the merchandise is complete or free from defects.
In the event that MCO does not have offset table claims in an amount corresponding to the Suppliers counterclaims, MCO has the right to offset against claims of other companies belonging to the Mcogroup Global Development Limited (especially Mcogroup Holding Limited) and any other affiliates of MCO. Similarly, the above cited companies and any other affiliates of MCO are also entitled to offset claims of MCO against the Supplier’s claims.
The Supplier is not permitted to offset claims or to delay or refuse performance on any grounds.
13.1 Independent of the final inspection to be performed by the Supplier pursuant to No. 3.2 herein, MCO will conduct regular inspections of the goods in accordance with ISO 2859-1 (AQL sampling system). As regards the check to be performed by MCO, the Supplier shall agree that only obvious defects are to be reported immediately; moreover, the notice of defect shall have been served within the correct period, if MCO serves such notice within 14 days after discovering the defect.
13.2 The Supplier is expressly notified of the requirement to obtain the assent of his liability insurer to the above contractual provision in order to maintain in force without restriction the existing insurance cover (German suppliers cf § 4 I1 AHB).
13.3 The Supplier shall, after consultation, grant MCO access to his production plants for the articles on order as well as to those of his subcontractors, permit audits and disclose its subcontractors´ names and addresses when so requested.
14.1 The Supplier shall comply with all applicable laws and regulations in the country of manufacture and the country of
destination as specified in the relevant purchase order, including, without limitation, all laws and regulations regarding product
safety, The Supplier hereby represents, warrants, and covenants that the sale and marketing of goods supplied to MCO does not
violate any laws or regulations in the country of sale. The supplier shall also abide by all applicable standards and obtain
all applicable certifications (e.g., DIN, EN, ISO, UL, CSA), unless agreed otherwise.
14.2 The Supplier shall also comply with all laws, regulations, ordinances, directives and standards applicable to future
deliveries of articles without this requiring any specific mention.
14.3 The Supplier shall ensure that laws, regulations, directives and ordinances are taken into consideration in good time
before they come into force in order to ensure that his supplies of goods may be used or sold to MCO without infringing laws,
directives and ordinances that come into force only at a later date.
14.4 At MCO`s request, the Supplier shall furnish evidence that all applicable requirements have been met prior to delivery of
the goods.
14.5 Where the Supplier is aware that the goods are intended for delivery to another country, the supplier shall also be
required to comply with this country`s regulations in accordance with t he provisions of paragraph 2 and paragraph 3.
14.6 The Supplier shall also undertake to adhere to the MCO Code of Conduct in its latest version.
14.7 In addition to the above the Supplier shall be in compliance with customer specifications as MCO will introduce to the
Supplier in a separate letter.
15.1 The Supplier is liable for defects in quality or title, i.e. if the delivered goods do not conform with the sample, the quality
requirements, the packaging and forwarding instructions, the material labeling provisions, or the care symbols, in case of
non-compliances with the obligations pursuant to no.14 herein, missing article inserts, missing article labels and all those
effects which are listed in 3.1.
The Supplier shall also be responsible to MCO in the event that any published declarations/claims made in the
advertising or on the labels prove to be incomplete or incorrect. This shall also apply to any missing, incorrect or incomplete
directions for assembly.
15.2 MCO's receipt of, or failure to reject, the goods shall not be construed as acc eptance of the supplier’s performance. In the
event of any breach of warranty or any other failure by Supplier to comply with all requirements pursuant here to or
meet any obligations pursuant hereto or pursuant to applicable law, MCO shall be entitled to all rights and remedies available
hereunder and under applicable law and in equity. Without limiting the generality of the foregoing, MCO may, in its
discretion, demand the supply of goods free of defects, rectification (by the supplier), have the defect remedied by a third
party or by MCO at the supplier’s expense, cancel the applicable purchase order, reduce the purchase price, seek cover, and
recover damages.
15.3 If the post-performance fails, MCO shall be entitled, without any further serving of notice, to further reaching rights/claims to
repudiation and compensation for damages caused in lieu of performance.
15.4 The statute of limitation for warranty claims shall be 3 years from the date of delivery to MCO. Longer statutory limitation
periods shall not be affected.
15.5 The statute of limitations will start again from the beginning for redeliveries of components or delivery of reworked
components unless the Supplier has clearly acted on a goodwill basis.
15.6 The return of defective goods to the Supplier shall not be construed as a request to supply replacements goods. The
Supplier shall be obliged to accept all returns of defective goods and immediately reimburse the full invoice value plus MCO's
disbursements in particular any wasted inbound freight costs.
15.7 In the event the Supplier should refuse to accept the goods, MCO shall be free to use the goods after having served
reasonable notice. After deduction of the costs so incurred, MCO shall be obliged to turn the proceeds over to the Supplier.
15.8 MCO shall be further entitled to charge the supplier for the cost of all inspections of defective goods.
15.9 Any costs incurred by MCO as a result of a defective delivery, in particular transport, travel, labour or material costs or costs
of a receiving inspection and any other consequential or incidental harm shall be borne by the Supplier and without limiting any
other rights and remedies of MCO under applicable law or in equity.
If MCO – on whatever legal grounds – is entitled to claim compensation, instead of performance and to implement a covering
purchase in order to assert a claim for the damages thus incurred, MCO is entitled to make use of, and Supplier hereby grants
MCO a license to use and permit its affiliates and its and their alternative suppliers to use, any intellectual and industrial property rights
of Supplier (such as copyright, patents, utility patents or registered designs, trademarks, licenses, claims based on
competition law etc.) in connection with the design, manufacture and sale of cover goods. To this extent the Supplier waives
any right to prohibit that he may be entitled to assert. MCO expressly points out that this right is granted as part of the damage
limitation obligation that the Supplier is required to observe. To the extent that any third party rights are violated by the
exercise of such rights by MCO, the Supplier (cf. No. 18 herein) is obliged to indemnify MCO, its affiliates and its and their
respective alternative suppliers from any and all third party claims.
18.1 The Supplier explicitly warrants that selling and marketing the merchandise does not violate any third-party rights
(copyrights, patents, utility patents or registered designs, trademarks, licenses, claims based on competition law etc.) and
does not contravene any regulations issued by statutory or administrative bodies. No duty of compensation shall exist if the
Supplier is able to prove that he is not responsible for the legal violation.
18.2 The Supplier is under obligation to hold MCO and the companies associated with it harmless from any claims of third parties
and to reimburse any damages beyond such claims, along with lost profits. The same shall apply in the event that the articles
are offered and sold outside the country of destination unless the Supplier has drawn attention in the order confirmation to
the fact that the goods he is offering are not to be sold in third countries.
18.3 A claim by MCO against the Supplier for breach of warranty becomes time-barred within three years after the expiration
of the year in which MCO became aware or without gross negligence would have become aware of the identity of the obligor
and the circumstances which constitute the claim. Besides claims because of the defect of title shall be subject of limitation
pursuant to section 15.4. and 15.5.
18.4 Rights to drawings, samples and models that are given to the Supplier shall remain with MCO and shall be treated confidentially.
Such documentation is to be returned to MCO with the final delivery. This shall also apply if a model has not been accepted.
18.5 The Supplier is liable for any abuse of patents. During and subsequent to the term of the supply contract, the Supplier is
prohibited from supplying articles bearing trademarks belonging to MCO or its licensors to third parties without the prior written
consent of MCO.
18.6 For each infringement of one of the supplier obligations listed in 18.1 and 18.4, MCO shall be entitled to demand
damages of EUR 10,000. The right to other more far reaching claims and entitlements shall remain in force.
18.7 Longer statutory limitation periods shall not be affected by the above rules. Any claims against the Supplier shall be
asserted by MCO, where applicable also on behalf of affiliated companies.
MCO is entitled to supply the merchandise to associated companies. This shall not affect the liability of the Supplier in its
relations with MCO. MCO shall also be entitled to supply consumers abroad and accordingly to advertise the goods abroad, for
example by means of catalogues, mail shots, brochures, CD-ROMS, floppy disks, video, film, DVD, internet, TV on
demand, SMS or other forms of telecommunication and non-physical transmission of images and text. The supplier’s liability
toward MCO shall remain unaffected.
The Supplier warrants that he shall not have any business or other contacts with terrorists, terrorist organizations or other
criminal or anti-constitutional organizations. In particular the Supplier shall put in place organizational measures to ensure that
EU Directive Nos. 2580/2001 and 881/2002 are implemented as part of his business operation.
This agreement shall be governed by and construed in accordance with Hong Kong law. The UN Sales Convention (UNCITRAL,
CISG) shall not apply.
