GENERAL TERMS AND CONDITIONS

GENERAL BUSINESS AND DELIVERY TERMS AND CONDITIONS OF COMPANY United Czech Engineering s.r.o.

(hereinafter the „VODP“)

according to §1751 and the Act no. 89/2012, the Civil Code, as amended

(hereinafter the „Civil Code“ or „OZ“)

I. General Provisions

These general business and delivery terms and conditions (hereinafter the „VODP“) constitute business terms and conditions according to the provisions of § 1751 and subsequent Act no. 89/2012 Coll., the Civil Code. The purpose of the VODP is to specify in detail the rights and obligations of the Contract for Work between the Contractor – engineering company Strojírna Loučná a.s., and the Orderer, while fulfilling the subject of the Contract (hereinafter the work), particularly to provide services related to production, delivery and assembly of the work.
The VODP together with specific terms and conditions of the work, which form the Content of the Contract for Work, similar contracts or a confirmation of an order or an offer (hereinafter „the Contract“), constitute a complete agreement of the parties regarding terms and conditions of the work, and replace all previous ones proposed by the Orderer and prior written or oral provisions. If the Contract contains a differing provision to what has been agreed by the Parties compared to the VODP, the Contract shall be superior to the VODP.
VODP are binding for the Parties from a day of concluding the Contract, if the relevant Contract contains a written link to the VODP, and VODP shall be attached to the Contract or the Orderer confirms he is aware of its content in the Contract or otherwise.
Changes and amendments to the VODP as well as any changes, addendums and amendments to the Contract may be done only in writing, after a prior agreement of both Parties to the Contract.
Legal action in writing is also considered to be actions made in electronic form or one using another form of technical means that allow to record a content and a specification or a person, provided the content is specific and understandable enough and the legal action is done by a person described in the Contract. The provisions do not apply to legal actions according to art. 4 of the VODP article.
All data included in the Contract as well as information, documents and other materials provided by the Contractor to the Orderer concerning the Contract, which are usually not accessible, remain a business secret of the Contractor (hereinafter also „confidential information“). The Orderer undertakes not to use the confidential information to satisfy his need that contradicts the Contract without a prior agreement of the Contractor, nor he shall provide them or make it accessible to any third parties.
If the Orderer does not comply with any of his contractual obligations or legal commitments, the Contractor may request they are fulfilled or he may withdraw from the Contract. In both cases, the Contractor is entitled to a compensation of the property damage that occurred to him.

II. Packing

If the Parties do not agree on a specific way of packing the work or its individual parts based on the Orderer´s request, the Contractor is obliged to apply packing according to a standard for that specific work, suitable for sending and transportation, applying a form of packing to store and protect the work.
If no agreement is reached, packages are considered to be non-returnable, they are available to the Orderer except for those where the Parties agree on conditions for their returning back to the Contractor. If an agreement is reached regarding returnable packages, the Contractor remains their owner, and the Orderer is responsible for their protection or respective damage for the whole time period the packages are available to the Orderer.

III. Price and payment terms and conditions

An agreement about a price for work, respectively about a form of defining the price, is an essential prerequisite of the Contract.
The Contract specifies a price for work as a price without value added tax (hereinafter „VAT“). The Orderer is obliged to pay a price of goods after it is increased by a valid VAT rate. That does not apply, if fulfilment is done is a regime of transferred tax obligation and a duty to declare VAT goes to the Orderer.
The Contractor has a right to increase the price of the work, if anytime during the time period the price was agreed for, including the time period following the Contract proposal by the Contractor, until the work is delivered, there is a significant increase in costs of crucial production expenses essential to produce the work. The Contractor shall inform the Orderer about a new price of the work without delay and in writing.
If the price for the work is agreed according to a number of tangible items (hereinafter goods), an essential information about the goods sent is specified in a relevant shipping document, specifically a delivery note.
The Contractor has a right to charge the price for the work, resp. its part, (the price for work) based on an invoice issued on a date of carried-out chargeable action, that is on a date when his duty to deliver the work is fulfilled according to the Contract, if not stated otherwise therein.
The Orderer is obliged to pay the price for the work to the account of the Contractor specified in a tax document, payable within 30 days from a day of issuing the invoice, if not agreed otherwise in the Contract. Legitimate obligations concerning a content of a tax document shall be filed by the Orderer within 5 working days from its delivery at the latest.
A date of payment means a day when an invoiced amount corresponding to a full price for work/ net and effective/, respectively another financial debt of the Orderer is credited to a bank account of the Contractor.
If the Orderer is late with payment of any of his financial obligations or their part, the Contractor is entitled to request a late payment interest in the amount of 0,05% of the amount owed for each day of delay.
The Contractor has a right to request a deposit (-s) to pay the price of work, a base to pay the deposit is a pro-forma invoice, payable within 30 days from a date of issuing the pro-forma invoice, unless the Parties agree on a different due date in the Contract. According to the Contract, the Contractor is also entitled to request the Orderer to adequately secure any debt with his property (documentary accreditive, bank warranty, guarantee of another subject, issuing his own bill of exchange or a blank cheque, establishment of the pledges, securing transfer right, transferring the obligation or another suitable provision). If the Orderer does not comply with the request by a deadline, the Contractor has a right to suspend the work / sending the work, or he is entitled to withdraw from the Contract.
The Contractor is not obliged to deliver the work, respectively, he is entitled to suspend his work on it or to withdraw from the Contract or exercise other rights according to the VODP, if the Orderer fails to keep the payment terms and conditions of any financial debts towards the Contractor, if the Orderer does not provide adequate securing of his debts to the Contractor, or if he fails to fulfil any other terms and obligations according to this VODP article. No such action of the Contractor is considered as breaching the Contract or a delay in delivering the work by the Contractor.
The Orderer is not entitled to transfer any of his obligations based on the Contract with the Contractor or in relation to it to another subject, nor to establish the pledges to the obligations to secure his debts or debts of any third parties, without a prior written agreement of the Contractor. If the obligation of the Orderer is breached, there is a contractual fine of 20% of a nominal value of the unlawfully transferred or pledged receivable. The Orderer is also not entitled to a one-sided inclusion of receivables of his debts towards the Contractor.

IV. Delivery terms and conditions

The Contractor delivers the work within the due date agreed in the Contract. The Contractor has a right to deliver the work before deadline, if the Orderer does not refuse such delivery after being informed by the Contractor that the work is ready for delivery or sending. The Orderer is not entitled to request any earlier delivery of the work.
Fulfilment time period may be extended by the Contractor by a time required to remove any obstacles that make it impossible/harder for the Contractor to fulfil. The Contractor shall inform the Orderer about the facts without delay and shall produce maximum effort to remove the obstacles as quick as possible.
The Contractor has a right to extend the fulfilment time period by the time the Orderer is in delay concerning his settlement of financial debts towards the Contractor, including other contract, too.
If the Contractor has no obligation towards the Orderer to enter into a shipping contract, the Orderer is obliged to secure taking over of the work, which is within 5 days from when the Contractor notifies him the work is ready to be shipped.
The Contractor is entitled to carry out partial delivery of the work, and the Orderer is obliged to take over any such delivery.
An essential condition for the work to be sent by the Contractor is a due settlement of all payable financial claims by the Orderer concerning all contractual relationships.
If the work is delivered to the Orderer – a subject registered to the value added tax (VAT) in the EU state, its delivery complies with the prerequisites prescribed by the law of a regime of transferred tax obligation to the Orderer. A delivery document within the EU states includes relevant shipping documents, particularly a waybill MR, CIM B/L etc. If the work is shipped according to a shipping clause, according to which the Contractor has no obligation to enter into a shipping contract with the Orderer, the Orderer undertakes to provide the Contractor an adequate proof of taking over the work without delay, respectively to take over a shipping document provided by the Contractor proving the delivery.
The Orderer undertakes to inform the Contractor immediately in writing about any changes concerning his tax identification (VAT number), respectively any change of regime in his VAT registration (payer – non-payer). If the Orderer breaches the obligation, the Contractor has a right to request a compensation of the whole property damage that occurs to him due to a payment of VAT or sanctions or another fulfilment to a tax administrator.
The Orderer undertakes to inform the Contractor without delay after taking over the work from a transporter about its damage or defects that occurred during transportation and state his complaints into a relevant shipping document.

V. Property rights to the work and disposal rights limitation

The work remains in the property of the Contractor until it is fully paid for including VAT (the so-called „property right saving clause“).
The Orderer is not entitled to sell the work or purloin, burden, damage, devalue, destroy it in any way or carry out any changes, alternations, repairs or modify the work in another way, e.g., to transport it from a place of fulfilment to another place or handle it, particularly to set up the pledges onto the work or provide another form of insurance to a benefit of any third party; except for the right of the Orderer to use the work for the purpose of the Contract and during business-production activities.. Until the Orderer takes over the work, it has to be labelled on a visible place with information about the Contractor still being an owner of the work.
If the Orderer is late with payment of the price for the work, the Contractor has a right to ask the Orderer to return to work immediately, having a title of exclusive property right, and come to a place of fulfilment or a place the work is situated at to take over the work. The Orderer is obliged to allow the Contractor to take over the work and cooperate with him, as needed. Any costs related to applying the property right qualification are paid by the Orderer.

VI. Force Majeure

If, during a time period of a contractual relationship, any extraordinary, unforeseen or insuperable obstacle occurs independently on the will of any Party to the Contract, which would temporarily or permanently prevent the Party from fulfilling its obligations according to the Contract, the Parties undertake to inform about such obstacles without hesitation, as well as about an expected duration time period, and they shall discuss further actions. The „obstacles“ are understood as any force majeure events, such as strike, war, other similar disputes, business, currency, political or other arrangements of authorities, natural disasters, such as fire, flood, earthquake, lightning strike, arctic freeze preventing or limiting a transportation of the work., and delay in delivery of goods, material or components not caused by the Contractor, traffic closures or delays, theft of the work or goods that form its parts during transportation, breakdown of production equipment or its parts and similar force majeure events including a decision or instruction of a relevant public authority which would limit or make it impossible to fulfil obligations according to the Contract. The Party the force majeure circumstances occurred to shall not be responsible for failing to fulfil the obligations according to the Contract, nor for any delay.
If any force majeure obstacle last for up to 30 calendar days, the Parties are obliged to fulfil their obligations according to the Contract after the effects of force majeure disappear, while delivery dates and all other terms shall be extended by the relevant time of force majeure. If the force majeure obstacle lasts longer than 30 calendar days, each contractual party may withdraw from the Contract.

VII. Defective performance right – complaints

The Contractor is obliged to deliver the work in agreed quality, amount, weight and specification according to technical specification in the Contract, technical terms and conditions or a different document agreed by the Parties. It is not a fulfilling defect and the work is considered duly delivered, if the volume (weight) or quality of the goods delivered corresponds to an acceptable tolerance deviation according to the Contract, VODP, technical terms and conditions, valid norms of other generally binding regulations.
The Orderer is obliged to check the work and confirm its characteristics and amount immediately after the work is delivered.
The Contractor provides a 12-month guarantee to the Orderer for the quality of work starting on a delivery date provided there is not a different guarantee period specified in the Contract.
Apparent defects of the work, which could be detected while checking the work, have to be reported to the Contractor without hesitation, within 5 days from delivering the work at the latest. The Orderer is obliged to report any other defects to the Contractor immediately after he finds them out, however, by the end of the warranty time period at the latest.
All complaints about any defects of the work have to be in writing and have to contain identification details of the delivery complaint (contract number, delivery date, shipping document number, invoice number etc.), description of defects detected together with a proof of them. The Orderer is obliged to allow the Contractor to access the complained work to assess if the complaint is legitimate.
If technically possible, The Orderer is obliged to ensure separate storing of the work complained, resp. to prevent access of any third parties until the complained is settled. Free handling with the work that would make a complaint procedure harder or impossible is not possible without prior agreement of the Contractor. If the Orderer breaches his duties and does not make it possible for the Contractor to examine the defect (-s), or he does not allow him to access the place the work is located or to the work as such, he does not provide the Contractor any samples occurred during wok upon request, or he does not provide, within time period specified by the Contractor in his statement to the complaint, adequate documentation for the Contractor to calculate a proportionate discount from the price; those may constitute the reasons for declining the complaint and may cause the Orderer loses rights related to defects of the work.
The Contractor is obliged to commence the investigation concerning the complaint immediately after he receives it from the Orderer, so that the Contractor is able to file his stance to the complaint within 30 days from receiving it. If the complaint is legitimate, the Contractor is obliged to either provide a discount from the price of the work or provide a new fulfilment without defects under the originally agreed conditions or remove the defects within agreed time period. The Contractor informs the Orderer of a claim selection while submitting his stand to the complaint.
A complaint concerning defects does not give a right to the Orderer to suspend (withhold) payment of the price for work, nor to refuse to accept other deliveries of the work. Any claims of the Orderer related to defects cease to exist, if the Orderer does not report the defects within the agreed time limits and in agreed way.
The Contractor is not held responsible for any defects to the work caused by a normal wear and tear or by any use of the work that contradicts its purpose according to the Contract or its documentation.
If the Orderer suffers damage as a result of breaching any obligations of the Contractor according to the Contract (e.g. also due to defective delivery of the work), without any consideration of force majeure circumstances excluding responsibility of the Contractor, the Contractor shall be bound to pay only real, provable damage to property calculated by the Orderer, but he does not pay for any lost profit, maximally up to the amount of 100% (one hundred percent) of the price for work. For the cases of damage related to breaching various obligations of the Contractor towards the Orderer, that is overall responsibility of the Contractor for damage to the Orderer, it shall not exceed 100% (one hundred percent) of the total price for work.

VIII. Final provisions

All disputes that could occur concerning the Contract and in relation to it shall be solved in a peaceful manner and by mutual agreement by the Parties. If the Parties do not agree on a peaceful solution of the dispute, its final decision shall be made by a relevant Arbitration court of the Economic Chamber of the Czech Republic and the Agricultural Chamber in Prague in accordance with its code, by a sole arbitrator appointed according to the code. The Parties undertake to fulfil all his obligations specified by the arbitral finding within deadlines specified in them. The arbitration award served to both Parties to the Contract can be executed by an execution title.
The Orderer has accepted the risk the circumstances may change after entering into the Contract, and therefore he is not entitled to call for rights defined in the provisions of § 1765 par. 1 of the Act no. 89/2012 Coll., the Civil Code, as amended.
Legal relationships according to the Contract or in relation to it, as well as any matters unsolved in the VODP, shall comply with Czech substantive rights, particularly the provisions of the Act no. 89/2012 Coll., the Civil Code, as amended.

The general business and delivery terms and conditions come into force on 1.4.2020.