contract for equipment sales and technology licensing
contract no. ____________________
this contract (hereinafter referred to as the “contract”) is made and entered into as of ________ (the date of signature ) in ________ (the place of signature) through friendly negotiation by and between _____________, a company incorporated and existing under the laws of ____________ with its registered address at _________________________________, and with its principal place of business at _________________________________ (hereinafter referred to as the “buyer”), and ____________________, a company incorporated and existing under the laws of the people’s republic of china with its registered address at _________________________________, and with its principal place of business at _________________________________(hereinafter referred to as the “seller”).
whereas, the buyer desires to engage the seller to provide the equipment, related design, technical documentation, technical service and technical training and to obtain from the seller a license of patent and/or know-how in relation to the erection, test run, commissioning, performance test，operation and maintenance for the equipment, as well as manufacture of the contract products. now it is hereby mutually agreed as follows:
article 1 definitions
1.1 “acceptance ”means the buyer accepted the equipment in accordance with article 11.5.
1.2 “commissioning” means the operation of the equipment in accordance with article 11.4 for the purpose of carrying out performance test.
1.3 “contract” means this contract signed by and between the buyer and the seller, including appendices attached which shall form an integral part of this contract.
1.4 “contract products” refers to all types of the products manufactured with patent and/or know-how under the contract, details of which are specified in appendix 1.
1.5 “destination airport” refers to _____________airport.
1.6 “effective date of the contract” means the date when the contract enters into force upon fulfillment of all the conditions stated in article 18.1.
1.7 “equipment” means the equipment, machinery, instruments, spare parts and materials supplied by the seller as listed in appendix 3.
1.8 “erection” means placing the equipment to the positions according to the design drawings, and connecting it with relevant equipment and utilities.
1.9 “improvement” refers to new findings and/or modifications made in the validity period of the contract by either party on patent and/or know-how in the form of new designs, formulas, recipes, ingredients, indices, parameters, calculations, or any other indicators.
1.10 “job site” means the site where the equipment shall be located and/or erected, namely ____.
1.11 “know-how” refers to any valuable technical knowledge, data, indices, drawings, designs and other technical information, concerning the erection, test run, commissioning, performance test，operation and maintenance for the equipment as well as manufacture of the contract products, developed and owned or legally acquired and possessed by the seller and disclosed to the buyer by the seller, which is unknown to either public or the buyer before the date of effectiveness of this contract, and for which appropriate protection measures have been taken by the seller for keeping know-how in secrecy. the specific description of know-how is set forth in appendix 3.
1.12 “last shipment” means the shipment with which the accumulated invoice value of shipped goods has reached ____ ( ) percent of the total equipment price.
1.13 “patent” refers to any and all of the effective patent rights possessed by the seller and licensed to the buyer under the contract in connection with the erection, test run, commissioning, performance test,operation and maintenance for the equipment, as well as manufacture of the contract products, the no. and list of which are set forth in appendix 3.
1.14 “performance test” means the tests for examining whether the equipment is able to meet guarantee figures specified in appendix 1.
1.15 “technical documentation” means the technical indices and data, specifications, drawings, processes, technical and quality standards, and other documents carrying the descriptions and explanations of patent, know-how and other technical information, in connection with the erection, test run, commissioning, performance test，operation and maintenance for the equipment, as well as manufacture of the contract products, to be provided by the seller as listed in appendix 4.
1.16 “technical service” means the technical instruction, assistance and guidance rendered by the seller as per appendix 6.
1.17 “technical training ” means the training rendered by the seller as per appendix 7.
1.18 “test run” means the initial run of a single machine or the whole system of the equipment without materials.
1.19 “warranty period” means the period of the warranty given by the seller as specified in article 12.2, during which the seller is responsible for the defects of the equipment as per article 12.
article 2 scope of the contract
2.1 the seller’s obligation
2.1.1 the seller shall supply the equipment, provide the design, technical documentation, and conduct the technical service and technical training, and grant the buyer a right to use the patent and/or know-how as set forth in the contract.
2.1.2 the seller shall supply the equipment which is listed in appendix 3, the specification is detailed in appendix 1.
2.1.3 the seller shall provide design in accordance with appendix 5, and submit to the buyer the technical documentation listed in appendix 4.
2.1.4 the seller shall conduct the technical services at the job site as per appendix 6.
2.1.5 the seller shall conduct the technical training as per appendix 7.
2.2 the buyer’s obligation
2.2.1 the buyer shall at his own costs and expenses, provide the seller with all information and data concerning the design as per appendix 2. the buyer shall ensure the completeness, correctness and accuracy of all such information and data.
2.2.2 the buyer shall at his own costs and expenses, obtain all necessary import permits, undertake customs clearance, take delivery of the equipment to be supplied by the seller and transport them to the job site in time.
2.2.3 the buyer shall at his own costs and expenses, perform all the civil works, construction, erection, test run， commissioning and performance test in accordance with the technical documentation under the technical services rendered by the seller as per appendix 6.
2.2.4 the buyer shall at his own costs and expenses, supply all the equipments, spare parts and facilities required, except for the equipment supplied by the seller as per appendix 3.
2.2.5 the buyer shall at his own costs and expenses, provide the qualified and appropriate technical personnel, labor, tools, utilities and the job site in time for erection, test run, commissioning, and performance test as specified in appendix 2.
2.2.6 the buyer shall at his own costs and expenses, perform necessary administration and security guard at the job site.
article 3 grant of license
3.1 the seller agrees to grant to the buyer and the buyer agrees to obtain from the seller a license to manufacture the contract products as well as to conduct erection, test run, commissioning, performance test, operation and maintenance for the equipment with patent and/or know-how as well as to use and sell the contract products. the name, model, specification, and technical data of the contract products are detailed in appendix 1. the buyer shall not make use of patent and/or know-how for any purposes other than those stipulated in the contract without prior written approval from the seller. the annual output of the contract products manufactured by the buyer shall in no case exceed _______________.
3.2 (option 1) the license granted under the contract shall be an exclusive license. the seller shall not retain its right to grant the licenses to any third parties, or to explore patent and/or know-how as well as to sell the contract products by itself within the territory specified in article 3.4.
(option 2) the license granted under the contract shall be a non-exclusive license. the seller shall retain its right to grant the licenses to any third parties, and to explore patent and/or know-how as well as to sell the contract products by itself within the territory specified in article 3.4.
3.3 the license granted under the contract shall be a non-transferable and non-sublicensing license, under which the buyer shall neither be entitled to transfer nor grant sub-license to any third party without prior written approval from the seller.
3.4 territory
3.4.1 the seller agrees to grant the license to the buyer only within the territory of _________________ (country or region). the buyer shall not explore patent and/or know-how in any place other than the job site without previous written consent of the seller.
3.4.2 the seller agrees to grant a license to the buyer to use and sell the contract products only within the territory of ________________________ (country or region). in case the buyer fails to perform its obligations under this clause, all the actual losses and damages thus incurred to the seller shall be borne by the buyer, and the seller shall have the right to terminate the contract without prejudice to any remedies specified in the contract.
article 4 price
4.1 the buyer agrees to pay the total contract price, technical training and technical service fee to the seller.
4.2 the total contract price, including price of the equipment, design, technical documentation and a license fee in a fixed amount, shall be __________(say _______________________ only).
the breakdown price is as follows:
the price for equipment is __________(say _______________________ only).
fee for design is __________(say _______________________ only).
fee for technical documentations is __________(say _______________________ only).
license fee is __________________(say: _________________ only)
4.2.1 the total contract price for the equipment is for delivery cif_____ port, and the technical documentations is for delivery cip (by air) ______ airport. cif and cip term shall be interpreted in accordance with incoterms XX, issued by the international chamber of commerce (icc).
4.2.2 the total contract price includes the price for spare parts listed in appendix 3. however, the total contract price does not cover the supply of any other spare parts. at the buyer’s request, the seller may provide with any other spare parts. a separate agreement shall be signed between the parties.
4.2.3 the above price is fixed and firm.
4.3 the total contract price does not cover the technical service fee and technical training fee specified in appendix 6,7.
4.4 the total contract price as well as the technical training and technical service fee shall not be regarded or in any way be explained or interpreted as covering any of the custom duties, taxes, or charges, fees, and expenses unless expressly listed in the contract.
article 5 payment
5.1 down payment
within ____ ( ) days after signing the contract, the buyer shall pay ____ ( ) percent of the total contract price amounting ____ by t/t to the seller.
5.2 [option one: payment by sight l/c]
the balance of the total contract price amounting ___ ( says ___ only ) shall be paid by an irrevocable letter of credit at sight, issued within ___ ( ) days after signing the contract by a reputable bank in ___ acceptable to the seller in favor of the seller. the letter of credit shall be available upon the presentation of the following documents till ______(specific expiration date or a specific circumstance for the expiration of the letter of credit).
5.2.1 ____ ( ) percent of the total contract price amounting ____ (say ___ only) shall be paid by the buyer to the seller within _______ days after the following documents have been submitted by the seller:
(a) bill of lading in one (1) original and ___ ( ) copies;
(b) commercial invoice in one (1) original and ___ ( ) copies;
(c) packing list in one (1) original and ___ ( ) copies;
(d) certificate of origin in one (1) original and ___ ( ) copies;
(e) insurance policy in one (1) original and ___ ( ) copies;
5.2.2 ____ ( ) percent of the total contract price amounting ____ (say ___ only) shall be paid by the buyer to the seller within _______ days after the following documents have been submitted by the seller:
(a) one (1) copy of the acceptance certificate signed by the buyer as per article 11.5, or the seller’s written statement specifying the lapse of more than seven (7) days after the seller’s notice requesting the buyer to issue the acceptance certificate in accordance with article 11.5;
(b)one ( 1 ) copy of commercial invoice.
5.2.3 ____ ( ) percent of the total contract price amounting ____ (say ___ only) shall be paid by the buyer to the seller within _______ days after the following documents have been submitted by the seller:
a) one (1) original letter of retention guarantee in the form of appendix 10;
b) one (1) copy of commercial invoice.
5.2 [option two: payment under a l/g]
the balance of the total contract price amounting ___ (say ___ only ), plus interest for deferred payment in the amount of ___ (say ___ only ), totaling ___ (say ___ only ) as detailed in appendix 12 shall be paid by the buyer by installments as specified in appendix 12 and backed by an irrevocable letter of guarantee in favor of the seller as per the appendix 11, issued within ___ ( ) days after signing the contract by the reputable bank in ____ acceptable to the seller.
5.3 all the banking charges incurred in the seller’s bank shall be borne by the seller while those incurred outside the seller’s bank shall be borne by the buyer.
article 6 delivery of equipment and technical documentation
6.1 the delivery of the equipment
6.1.1 the delivery of the equipment listed in appendix 3 shall be completed within ____ ( ) months from the effective date of the contract.
6.1.2 within ____ ( ) months after the effective date of the contract, the seller shall send to the buyer a preliminary delivery schedule by fax.
not later than ____ ( ) days before the first shipment, the seller shall submit to the buyer the final delivery schedule in three (3) copies indicating contract number, dispatch number, name of the equipment, quantity, approximate dimensions, volume of each package and time of each shipment.
6.1.3 the port of shipment is ____, while the port of destination is ____.
6.1.4 advance shipment, partial shipment and transshipment are allowed, however, the seller shall inform the buyer thirty (30) days before such shipment.
6.1.5 the date of bill of lading for each shipment shall be considered as the actual delivery date.
6.1.6 the seller shall notify the buyer by fax of the following within five (5) working days after each shipment is effected:
(a) contract number
(b) name of the vessel and loading port
(c) name of the equipment shipped
(d) number and date of bill of lading
(e) total volume
(f) total gross and net weight
(g) total number of packages/cases
6.1.7 the seller shall airmail the following documents in duplicate to the buyer:
(a) bill of lading
(b) commercial invoice
(c) packing list
(d) certificate of origin
(e) insurance policy.
6.2 the late delivery of the equipment
6.2.1 if the seller fails to deliver the equipment in accordance with the final delivery schedule, the seller shall pay to the buyer liquidated damages for such delay at the following rates:
(a) from the first week to the fourth week, the liquidated damages shall be
____ ( ) percent of the value of the delayed portion of the equipment per
week
(b) from the fifth week to the eighth week, the liquidated damages shall be
____ ( ) percent of the value of the delayed portion of the equipment per week
(c) from the ninth week, the liquidated damages shall be ____ ( ) percent of
the value of the delayed portion of the equipment per week
6.2.2 the fractions of four days or more shall be counted as one week and fractions of less than four days shall be omitted. the total aggregate amount of the liquidated damages shall not exceed ____ ( ) percent of the value of the delayed portion equipment.
6.2.3 the seller shall be released from the liability to the buyer whatsoever in respect of the late delivery after his payment of liquidated damages in accordance with article 6.2. notwithstanding the seller’s payment of the liquidated damages for the late delivery equipment, the seller shall not be released from his obligation to deliver the equipment.
6.3 the delivery of the technical documentation
6.3.1 the technical documentation listed in appendix 4 shall be delivered cip ____airport by air within ____ ( ) months after the effective date of the contract.
6.3.2 the date of airway bill shall be regarded as the actual delivery date of the technical documentation.
6.3.3 within ____ ( ) working days after sending each lot of the technical documentation, the seller shall inform the buyer of the contract number, item number, number and date of airway bill and the flight.
6.3.4 in case of shortage, loss of or damage to the technical documentation due to the seller’s reason, the seller shall make supplement to the buyer within ____ ( ) days after receiving the buyer’s written notification without any further charge.
article 7 packing and marking
7.1 the equipment shall be packed to withstand long distance transportation, multiple handling.
7.2 the seller shall mark the following on two opposite sides of each package with indelible painted english words:
(a) destination
(b) consignee
(c) contract number
(d) shipping mark
(e) gross/net weight (kg)
(f) case/ bale number
(g) dimensions: l x w x h (cm)
7.3 each package shall contain one (1) copy of packing list.
7.4 the seller shall mark on the package, if necessary, “handle with care", “right side up", “fragile" or other indicative marks according to the characteristics and feature of the goods as well as different requirement for transportation, loading and unloading of the goods.
7.5 if the goods weigh three (3) or more than three (3) metric tons, gravity, hoisting position and illustrative marks shall be marked so as to facilitate loading, unloading and handing.
7.6 all technical documentation provided by the seller shall be properly packed to withstand long distance transportation and multiple handling. the surface of each package shall be marked with the following words:
(a) destination
(b) consignee
(c) contract number
(d) gross/net weight (kg)
(e) item number
(f) dimensions: l x w x h (cm)
article 8 technical service and technical training
8.1 the seller shall dispatch technical personnel to job site to render technical service in accordance with contract according to a time schedule agreed upon between both parties. the number, specialty, rank, treatment of the personnel, and payment as well as the contents, and requirements of technical service are specified in appendix 6.
8.2 the buyer shall have the right to send its technical personnel to the relevant factory selected by the seller for training. the number, speciality, treatment of the personnel, and payment as well as the contents, time schedule, and requirement of training, are specified in appendix 7.
8.3 either party shall provide assistance to the other party’s technical personnel in their application for visa, working permit, and/or other necessary formalities for rendering technical service or training under the contract in the other party’s factory.
8.4 either party’s technical personnel shall abide by the laws of the other party’s country and the regulations of the other party during their stay in the other party’s country.
article 9 standards and inspection
9.1 the seller shall carry out the design, manufacture, inspection and test of the equipment according to the existing standards of the people’s republic of china, namely gb.
9.2 the seller or the manufacturer shall, at his own costs and expenses, inspect the equipment and issue the ex-work quality certificate.
9.3 the open-case inspection of the equipment shall be performed by the buyer in the presence of the seller’s representatives on the job site in days after the arrival of the equipment at the job site. the open-case inspection fee shall be borne by the buyer.
the buyer shall inform the seller of the date one (1) month before the date of open case inspection and shall also render assistance to the seller’s representatives in their inspection work.
9.4 during the joint open-case inspection, a detailed inspection record shall be made and signed by the representatives of both parties.
in case the seller is responsible for any defect or shortage of the equipment, the inspection record shall be taken as an effective evidence for the buyer to claim repair, replacement or supplement to the seller. any of such claims shall be lodged by the buyer within month(s) after the arrival of the equipment at the job site.
9.5 if any shortage, defect of or damage to the equipment is found in open-case inspection not attributable to the seller’s responsibility, the seller shall make repair, replacement or supplement at the buyer’s expenses in accordance with the separate agreement signed by both parties.
9.6 the buyer is not entitled to open the case, assemble and/or disassemble the equipment without the seller’s prior written consent.
if there is no joint open case inspection due to the reasons not attributable to the seller, the quantity and apparent quality of the equipment shall be deemed correct and in perfect condition.
article 10 design and design liaison
10.1 the buyer shall provide to the seller within ____ ( ) days after the effective date of the contract, all the design data which shall be taken as the design basis. the seller shall not be liable to the buyer for, and the buyer shall indemnify the seller and hold the seller harmless from any damages or failure caused by the incompleteness, incorrectness and/or inaccuracy of any such information and data.
10.2 a design liaison meeting shall be held in the ____ ( ) month after receiving above mentioned design data, the seller will dispatch his technical personnel to the job site to participate in the meeting. during the meeting period, the seller will discuss with the buyer the relevant design details. both parties shall sign an agreement outlining the design details.
10.3 during the design liaison meeting, the seller and the buyer shall provide assistance to the other’s dispatched personnel in arranging entry visas to the respective countries. the expense incurred on the dispatched personnel shall be borne by the party respectively.
article 11 erection, test run, commissioning, performance test and acceptance
11.1 the erection, test run, commissioning, performance test shall be conducted by the buyer.
11.2 chief representatives
11.2.1 each party shall nominate one (1) chief representative to deal with the technical matters during the period from the start of the erection to acceptance of the equipment.
11.2.2 detailed arrangements shall be made through friendly discussions by the chief representatives of both parties. the chief representatives of both parties shall fully cooperate to carry out their duties stipulated in the contract, however they have no right to revise, alter or amend the contract without the written authorization of both parties.
11.2.3 the chief representatives of both parties shall communicate through linking sheet for the matters relative to opinions, suggestions and information. the linking sheet shall be countersigned by the other party.
11.3 erection and test run
11.3.1 the erection shall be completed by the buyer in ____ ( ) days from the effective date of the contract. the seller’s chief representative shall arrive at the job site ____ ( ) days prior to the beginning of the erection.
11.3.2 when erection is completed and in full conformity with requirements of the technical documentation, a certificate of completion for erection of the equipment shall be signed by the chief representatives of both parties in two (2) originals, one for each party, within three (3) days. the date of signing said certificate shall be deemed as the date of completion of erection.
11.3.3 as soon as the completion of erection, test run for single machine and the whole system of the equipment shall be started.
11.3.4 when test run has been successfully performed, a certificate of completion for test run of the equipment shall be signed by the chief representatives of both parties in two (2) originals, one for each party, within three (3) days. the date of signing the said certificates shall be deemed as the date of completion of test run of the equipment.
11.4 commissioning and performance test
11.4.1 within ____ ( ) days after the completion of the test run, the buyer shall make available qualified operation and maintenance personnel, raw materials, spare parts, utilities and other matters required for the commissioning. detailed procedures such as instrument calibrating, items of recording, sampling methods and analyzing methods, which are necessary for the commissioning shall be discussed and agreed upon by the chief representatives of both parties.
if in the opinion of both parties, the equipment is ready for the commissioning, both parties shall confirm the readiness for the commissioning in writing.
11.4.2 the commissioning of the equipment shall be started immediately after the confirmation of the readiness for the commissioning. the commissioning period shall ____ ( ) days after commencement of the commissioning.
11.4.3 when the seller and the buyer consider that stable operation of the equipment has been achieved, the date of performance test shall be fixed by chief representatives of both parties.
11.4.4 the seller shall have the right to access to the laboratory and testing facilities in order to take samples and make analytical tests. the sample taking and analytical test during the commissioning period will be done in the presence of the chief representatives of both parties.
11.4.5 during the period of commissioning until acceptance of the equipment, the seller may use the buyer’s stored spare parts. should the buyer’s stored spare parts be used by the seller due to the seller’s responsibility, the seller shall replenish the stores with the same in time at job site; otherwise the seller shall provide the same at the buyer’s costs upon the buyer’s timely request.
11.4.6 if the result of performance test has reached the guarantee figures as per appendix 1, the acceptance certificate of the equipment shall be signed by the chief representatives of both parties in two (2) originals, one for each party, within three (3) days.
11.4.7 if the performance test cannot meet guarantee figures specified in appendix 1, both parties shall jointly make investigations so as to find out the reason for clarifying the responsibility.
11.4.8 if the guarantee figures are not met due to the seller’s reason, the buyer shall agree to give an extension of ____ ( ) months so that the seller can make improvement or adjustment to the equipment and conduct further performance test. all the costs and expenses for making improvement or adjustment to the equipment shall be borne by the seller.
11.4.9 during the extension period, if the guarantee figures are still not met due to the seller’s reason, the seller shall pay the liquidated damages as per appendix 1 to the buyer against the acceptance certificate signed by both parties.
the seller’s aggregate liability to pay liquidated damages for failure to attain the performance guarantees shall not exceed ____ ( ) percent of the equipment price. the seller shall have no further liability whatsoever to the buyer in respect of such failure after payment of the liquidated damages.
11.4.10 if the non-achievement of the guarantee figures is due to the reasons not attributable to the seller, the seller shall agree to give an extension of ____ ( ) months. during the extension period all costs thereto incurred for the adjustment of the equipment, as well as the costs and expenses for the seller’s technical personnel shall be borne by the buyer. in case the guarantee figures still can not be achieved due to the reasons not attributable to the seller in the extension period, the equipment shall be accepted by the buyer. both parties shall sign the acceptance certificate.
11.5 acceptance
11.5.1 acceptance shall occur in respect of the equipment when :
(a) performance test has been successfully completed as per the article 11.4.6.; or
(b) the performance test has not been completed due to the reasons not attributable to the seller such as delayed civil construction, lack of and/or any other inconformity of raw materials, spare parts of the buyer’s scope of supply under appendix 2, and utilities with the requirements of the contract in the ____ ( ) months from the date of bill of lading of the last shipment; or
(c) the seller has paid the liquidated damages as per article 11.4.9; or
(d) the guarantee figures still can not be reached due to reasons not attributable to the seller’s reason in the extension period as specified in article 11.4.10; or
(e) the buyer takes the single machine and the whole system of the equipment into use without the seller’s approval.
11.5.2 at any time after any of the events set out in article 11.5.1 has occurred, the seller may give a notice to the buyer requesting the issuance of the acceptance certificate.
11.5.3 the buyer shall within seven (7) days after receipt of the seller’s notice, issue such acceptance certificate.
11.5.4 if within seven (7) days after receipt of the seller’s notice, the buyer fails to issue the acceptance certificate or fails to inform the seller in writing, with convincing evidence, of the reason why the buyer has not issued the acceptance certificate, the equipment shall be deemed having been accepted on the seventh day of the seller’s said notice.
11.5.5 after the acceptance, the seller’s responsibilities and obligations under the contract shall be deemed having been fulfilled except those as stipulated in article 12 and 14.
article 12 guarantee and warranty
12.1 the seller guarantees that:
(a) the equipment supplied by the seller shall be new and made of adequate materials, and in conformity with the technical requirements of the contract;
(b) the technical documentation shall be complete, clear and correct.
12.2 the period of warranty given by the seller under article 12.1 shall be ____ ( ) months from the date of acceptance or ____ ( ) months from the date of last shipment, whichever comes earlier.
12.3 defect of the equipment
12.3.1 during the warranty period, should any defect due to inferior materials or bad workmanship of the equipment be found under normal operation, the buyer shall give the seller a notice stating the details, together with all available evidence.
the seller shall take immediate action to eliminate the defect at the seller’s expenses within the period agreed by both parties.
12.3.2 if certain defect can not be eliminated despite of several attempts, the seller shall replace the defective parts with non-defective parts at the seller’s costs and expenses.
12.3.3 if the defect is eliminated by the buyer himself, subject to the seller’s prior written consent, all the direct costs and expenses thus incurred shall be borne by the seller.
12.3.4 the seller may reduce the price of the defective equipment according to the degree of inferiority or extent of damage as agreed by both parties. after the reduction the seller shall be released from its obligations and liabilities.
12.3.5 during the warranty period, should any defect due to the buyer’s improper operation or maintenance be found, the seller will provide technical assistance to eliminate the defect or replace the defected parts upon buyer’s requests. all the costs and expenses thus occurred shall be borne by the buyer.
12.3.6 subject to article 12.3.1, the seller shall not be responsible for any defect or damage to the equipment arising out of any circumstances including but not limited to the following causes:
(a) combination of the equipment with any machinery, and/or component other than those supplied by the seller; or
(b) alteration, modification or repair without the seller’s prior written consent; or
(c) failure of the buyer to follow the technical documentation and instructions of the seller, including the buyer’s improper operation and maintenance; or
(d) normal wear and tear.
12.4 during the warranty period, should the technical documentation supplied by the seller be found incomplete, unclear or incorrect due to the seller’s reason, the seller shall be liable to supplement, replace or correct the technical documentation free of charge.
12.5 the seller shall in no respect be understood or interpreted as liable for the commercial development of the contract products. the buyer shall undertake the risk of the commercial development of the contract products.
12.6 in no circumstances, whether as a result of breach of contract, warranty, indemnity, tort (including negligence), strict liability, or otherwise, shall the seller or its subcontractors or suppliers be liable for loss of profit or revenues, loss of production, loss of use, loss of information or data, cost of capital, cost of substitute equipment, facilities, services or replacement power, downtime costs, claims of the buyer’s customers for such damages, or for any special, consequential, incidental, indirect or exemplary damages.
12.7 notwithstanding anything to the contrary provided in the contract, the aggregate liability of the seller to the buyer , on all claims of any kind, whether in contract, warranty, indemnity, tort (including negligence), strict liability, or otherwise, arising out of the performance or breach of the contract or use of any equipment or exploration of the patent and/or know-how shall not exceed ____ ( ) percent of the total contract price.
12.8 all contractual obligations of the seller shall be deemed as having been fulfilled upon the expiry date of the warranty period.
article 13 intellectual property right
13.1 the seller represents that it is entitled or authorized to grant the license to the buyer to use the patent and/or know-how for the purpose as specified in article 3.
13.2 the buyer shall not use such patent and/or know-how received from the seller for any purpose other than that as specified in this contract.
13.3 any intellectual property right or other technical information granted by the seller to the buyer shall remain the property of the seller. in no circumstances shall any terms and conditions in this contract be construed, deemed, or interpreted as transfer of title to the buyer of any information which may be delivered to or accessed by the buyer.
13.4 registration of the contract and maintenance of patent
13.4.1 the buyer shall, after the contract is signed between both parties, make sure that the contract is registered with or filed to the competent authorities in the buyer’s country if it is required by law.
13.4.2 the seller shall, during the validity period of the contract, make all reasonable efforts to maintain patent in force in the territory as stipulated in article 3.4.1 and bear the costs thus incurred. the buyer shall not make any action or inaction which may lead to invalidation or compulsory licensing of the patent.
13.5 improvement and grant-back
13.5.1 should any improvement be made by the seller on patent and/or know-how within the validity period of the contract, which shall be the exclusive property of the seller, the seller shall grant the buyer a non-exclusive license to exploit such improvement at latest __________months from its improving, provided that the license fee is agreed upon between both parties.
13.5.2 the buyer shall be entitled to make improvement on patent and/or know-how within the validity period of the contract. the seller shall have the right to obtain and make use of the improvement. the license fee shall be discussed between both parties in due time.
13.5.3 both parties shall keep improvement confidential. neither party shall be entitled to grant any third party a sub-license on improvement made and provided by the other party without previous written consent of the other party.
article 14 confidentiality
14.1 after signing of the contract, both parties shall keep secret all the contents, terms, conditions of the contract.
14.2 the buyer shall take proper measures to keep strictly confidential of know-how, technical documentation, improvement and any other secret information obtained or accessible to from the seller. the buyer shall not disclose any of them to any third party, and shall not make use of them without prior written consent of the seller except otherwise stipulated in the contract.
14.3 the buyer may disclose the secret information as described in article 14.2 to the personnel of its own, or of any related parties engaged in the performance of the contract subject to article 14.2, strictly to the extent as essential for the implementation of the contract, provided that the individuals and/or parties accessing or may access such secret information are engaged to undertake in written form the same confidential liability of the buyer to the seller. any breach of confidentiality obligations by any personnel from the buyer or the buyer’s related parties shall be deemed as breach of the contract by the buyer.
14.4 notwithstanding this article 14, the seller may furnish to its sub-contractor such documents, data, and other information received from the buyer to the extent required for performing the contract, in which event the seller shall obtain from such sub-contractor an undertaking of confidentiality similar to that imposed on the seller under the article 14.
14.5 this article 14 shall survive the expiration or termination of the contract.
14.6 the confidential obligation shall not apply to the information which:
a. now or hereafter enters the public domain; or
b. can be proved to have been in the possession of the party at the time of disclosure and which was not previously obtained, directly or indirectly, from the other party hereto; or
c. otherwise lawfully becomes available to either party from a third party under no obligation of confidentiality.
article 15 taxes and duties
15.1 all taxes and duties in connection with the signing and performance of the contract, levied by governments of the people’s republic of china, including but not limited to customs duties, income tax, sales tax, value-added tax etc., shall be borne and paid by the seller.
15.2. all taxes and duties in connection with the signing and performance of the contract levied on the buyer and seller by the buyer’s governments, including but not limited to customs duties, income tax, sales tax, value-added tax etc., shall be borne and paid by the buyer. the buyer shall pay in due time and full amount and hold the seller harmless from any taxes and duties in case incurred to the seller in the signing and performance of the contract.
15.3 all import taxes and duties for tools and/or instruments, which the seller or the seller’s personnel may bring to the buyer’s country for the execution of the contract, shall be borne and paid by the buyer.
15.4 any and all taxes and duties in connection with the signing and performance of the contract levied in any place except the cases as specified in article 15.1 are not included in the contract price. should the seller make the relevant payment directly as the case may be, both parties agree to amend the contract price to fully compensate the seller for the payment, and the buyer shall fully refund the seller for the relevant amount within_______( ) days from the seller’s payment.
article 16 force majeure
16.1 if either of the contract parties is prevented from executing the contract due to the event of force majeure such as war, riot, coup, embargo, flood, typhoon, tornado, snowstorm, earthquake and other events which could not be foreseen, avoided and overcome, the affected party shall notify the other party by fax within the shortest possible time of occurrences of the force majeure and send a certificate issued by competent authorities or agency certifying the event of the force majeure by registered or express mail within fourteen (14) days following its occurrence.
16.2 the affected party shall not be liable for any delay or failure in performing any of its obligations due to the event of force majeure. however the affected party shall inform the other party by fax the termination or elimination of the event of force majeure as soon as possible.
16.3 both parties shall proceed with their obligations immediately upon the cease of the event of force majeure or the removal of the effects and the term of the contract shall be extended correspondingly. should the effect of the event of force majeure last for more than one hundred and twenty (120) days, either party shall have the right to terminate the contract by a written notice.
article 17 applicable law and settlement of disputes
17.1 the applicable law of the contract shall be the laws of the people’s republic of china.
17.2 all disputes arising from or in connection with the contract shall be settled through friendly consultation between both parties. in case no agreement can be reached, the dispute shall be submitted for arbitration.
17.3 the arbitration shall be conducted by china international economic and trade arbitration commission (cietac) in beijing in accordance with arbitration rules of the commission in effect at the time of applying for arbitration. the tribunal shall be composed of three arbitrators.
17.4 the arbitral award shall be final and binding upon both parties.
17.5 during proceedings of arbitration, the undisputed part of the contract shall be performed continuously by both parties regardless of such arbitration proceedings.
article 18 effectiveness, term and termination of the contract
18.1 the contract shall enter into force on the date when all of the following conditions have been fulfilled, whichever occurs later:
(a) the seller and the buyer sign the contract;
(b) the contract shall be approved by the competent authorities and/or banks of both parties (if applicable);
(c) the seller receives the down payment;
(d) the seller duly receives the l/c (or l/g ) issued by the buyer's bank.
18.2 each party shall use its best efforts to fulfill the above conditions for which it is responsible as soon as practicable.
18.3 if the contract has not become effective pursuant to article 18.1 within ____ ( ) months after the date of signing this contract, the seller has the right to make an equitable adjustment to the total contract price and the time for delivery and/or other relevant conditions of the contract. should no agreement is reached for the above mentioned adjustment within ____ ( ) days from the seller’s request of adjustment, the seller shall be entitled to cancel the contract.
18.4 the contract shall be valid and remain in force for_____ (_____) years from the date of effectiveness, during which period the buyer shall be entitled to manufacture the contract products with patent and/or know-how and sell the contract products within the licensed territory as specified in article 3.4.
(option 1) the buyer shall not be entitled to manufacture with patent and/or know-how or sell the contract products after the aforesaid period unless the buyer agrees to pay additional license fees in the amount and with the payment schedules and methods as agreed upon between both parties in due time.
(option 2) the buyer shall be entitled to manufacture with patent and/or know-how or sell the contract products after expiration of the contract term specified above, provided that the buyer shall not be released from its confidential obligations under the contract.
(option 3) the buyer shall not be entitled to manufacture with patent and/or know-how or sell the contract products after the expiration of the contract term specified above, and shall return to the seller all the technical documentations specified in appendix 4 without remaining any duplicate copies. nevertheless the confidential obligations of the buyer under article 14 shall survive the contract term.
18.5 either party may, without prejudice to any other remedy for the other party’s following breach of the contract, terminate the contract in whole or in part by a written notice send to the other party, if the other party
a. fails to perform its payment obligation under the contract and does not remedy for its failure within a period of ______ (____) days upon receipt of the written notice or a period agreed upon between the parties; or
b. fails to perform its confidentiality obligation under the contract; or
c. fails to perform any other obligations under the contract except minor parts thereof, and does not remedy for its failure within a period of ______ (____) days upon receipt of the written notice or a period agreed upon between the parties; or
d. becomes bankrupt or insolvent, goes into liquidation, has a receiving or administration order made against him, compounds with his creditors, or carries on business under a receiver, trustee or manager for the benefit of his creditors, or dissolves, or ceases to do business, or be ordered to close down / to cease to do business / to dissolve, or has its business license revoked, or if any act is done or event occurs which (under applicable laws) has a similar effect to any of these acts or events.
18.6 either party may, without prejudice to any other remedy, terminate the contract in whole or in part by a written notice send to the other party, if
a. the other party is prevented by the laws, statutes, rules or regulations of either country from performing its obligations under the contract; or
b. the seller is prevented by the relevant authority of the buyer’s country from being paid in accordance with the contract; or
c. the other party is prevented from performing its contractual obligations by any event of force majeure for more than one hundred and twenty (120) days.
18.7 in the event of termination of the contract, without prejudice to any other remedies available according to the contract and/or applicable laws,
the buyer shall cease all its further exploitation of the patent and/or know-how and any acceptance of further orders from third parties for the contract products.
all the delivered literatures, drawings, samples, instruments, equipment, and other documents including the interpretations related to patent and/or know-how shall be returned to the seller as the seller’s requests.
all the contracts on sales of the contract products signed between the buyer and third parties shall be terminated by the buyer, otherwise the seller shall be paid accordingly.
in case the termination is due to the seller’s default, the buyer shall be entitled to complete the performance of the contracts on sales of the contract products already signed between the buyer and third parties before the termination.
the seller shall be paid by the buyer for all the contractual obligations performed by the seller till the date of termination within _______days from receipt of the termination notice.
e. termination of the contract shall not release either party from its confidential obligations under the contract
article 19 miscellaneous
19.1 the contract is signed by the authorized representatives of both parties in ____ ( ) originals. each party shall keep ____ ( ).
19.2 the contract supersedes all communications, negotiations and agreements between the parties prior to the signing date of this contract.
19.3 all amendments, supplements and alternations to terms of the contract shall be made in written form and signed by the authorized representatives of both parties. these amendments, supplements and alternations shall form integral parts of the contract.
if any costs occur or delivery delay due to amendment or explanation of the new law or statute or regulations enacted by the buyer’s country after the effectiveness of the contract，the seller shall have the right to ask for necessary adjustment in relation to the contract price and the delivery schedule.
19.4 no assignment, cession, novation, or transfer of any right or obligation under this contract shall be made by either party to a third party without the prior written consent of the other party.
19.5 all communications between both parties in the course of implementation of the contract should be in english language in written form at the address set forth below. the faxes concerning the important matters shall be confirmed in due time by registered or express mail or letter delivered by hand.
the buyer:
address:
post code:
fax: __________________________
tel.: __________________________
email:__________________________
attention: ______________________
the seller :
address:
post code:
fax: __________________________
tel.: __________________________
email:__________________________
attention: ______________________
in witness whereof, the parties hereto have caused this contract to be duly executed.
the buyer:
the seller:
by:______________________[signature]
name: [printed name]
by:_______________________ [signature]
name: [printed name]
title:
title:
appendices
appendix 1 specifications and guarantee indices (omitted)
学校小卖部承包劳动合同书范本
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