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4. The seller shall not be liable for any delay in manufacture or delivery due to fires, strikes, disputes with workmen, war, civil commotion, epidemics, floods, accidents, delays in transportation, shortage of cars, shortage of fuel or other material, shortage of labor, acts, demands or requirements of the Goyernment of the United States or of any other State or government, or to any other causes beyond the reasonable control of the seller, or of the manufacturer, notwithstanding such causes of delay are operative at the time of making the contract, and the existence of such causes of delay shall justify the suspension of manufacture and shall extend the time of performance on the part of the seller to such extent as may be necessary to enable it to make delivery in the exercise of reasonable diligence after the causes of delay have been removed. If the performance of the contract by the seller be delayed by reason of any of the causes above mentioned, the purchaser may, subject to previously obtaining the consent of the seller, cancel the purchase of such portion of the goods, for which details and shipping instructions have been duly furnished in accordance with the contract, as may have been subjected to such delay, provided such portion of the goods bas not been manufactured nor is in process of manufacture at the time the purchase's request for such cancela. tion arrives at the manufacturer's works. The provisions of this paragraph shall not be limited nor waived by any other terms of the contract, whether printed or written.
5. The seller may ship any portion of the goods as soon as completed at the manufacturer's works, and payment for any portion of the goods as shipped shall become due in accordance with the terms of payment. Insistence by the purchaser on suspension of manufacture or of any shipment, if not acquiesced in by the seller, may be treated by the seller as a wrongful termination of the contract on the part of the purchaser, and the purchaser shall thereupon be liable for all damages arising out of such termination.
DETAILS AND SHIPPING INSTRUCTIONS (SPECIFICATIONS) 6. If the purchaser fails to furnish details and shipping instructions to enable the seller to perform this contract in accordance with its terms, the seller shall be entitled, at its option, and in addition to all other rights, to cancel such portion of the contract as may remain unexecuted, or to make shipment in accordance with the details and shipping instructions which the purchaser may have furnished for previous shipments on account of the same or a previous contract. The purchaser shall not, however, be entitled to change or modify, except with the consent of the seller, any specification, details, or instructions comprised in the contract itself.
INSPECTION 7. Inspection of the goods, if agreed to, must be made at the manufacturer's works, and such inspection and acceptance shall be final. Reasonable facilities will be afforded to inspectors, representing the purchaser, to make such inspection and to apply, previous to shipment from the manufacturer's works, tests in accordance with the specifications to which the seller has previously agreed.
8. The seller shall not be liable for any claims unless they are made promptly after receipt of the goods and due opportunity has been given for investigation by the seller's own representatives. The seller shall not be liable for any claims for labor nor for consequential damages. Goods must not be returned except by permission of the seller.
DAMAGE IN TRANSIT
9. The seller agrees that the goods shall leave the manufacturer's works in good condition, and the purchaser assumes all risks of rust and other damage and loss during transportation.
GENERAL 10a. The goods are to be exported to the destination stated by the purchaser at the time the inquiry is made, and the purchaser guarantees that the goods
will be shipped to that destination, and agrees to furnish, if required by the seller, a landing certificate duly signed by the customs authorities at the port of destination, certifying that the goods have been landed and entered at that port.
10b. The seller reserves the right, even after partial payment on account of any contract with the purchaser, to require from the purchaser satisfactory security for the due performance of any and all of his obligations, and refusal to furnish such satisfactory security or the failure of the purchaser to perform any of his obligations under this or any other existing contract will entitle the seller, upon notice to the purchaser, to suspend shipments or to cancel the contract, or so much of it as may remain unexecuted, without prejudice to any claim for damages the seller may be entitled to make.
10c. All drawbacks of duties paid on materials entering into the manufacture of the goods shall accrue to the seller, and the purchaser agrees to furnish the seller with all documents necessary to obtain payment of such drawbacks and to cooperate with the seller in obtaining such payment.
TERMS OF PAYMENT
11. Unless otherwise agreed in writing, the terms of payment are net cash in exchange for the documents hereinabove mentioned, to be tendered to bankers approved by the seller, with whom credit in favor of the seller, for the full amount of the contract or sale, is to be established concurrently with the making of the contract, this credit to be confirmed to the seller by the bankers and to remain in full force and effect until the order or contract shall have been completely performed. Delay by the purchaser in establishing such credit, or in establishing such other credit as may be agreed upon in writing, shall extend the time for the performance of the contract by the seller to such extent as may be necessary to enable it to make delivery in the exercise of reasonable diligence after such credit has been established, or, at the seller's option, may be treated by the seller as a wrongful termination of the contract on the part of the purchaser and the purchaser shall thereupon be liable for all damages arising out of such termination.
12. Every quotation is based on the understanding that, if accepted and the seller so elect, a formal contract, satisfactory to the seller, will be signed by the purchaser.
GENERAL CONDITIONS OF SALE F. A. S. VESSEL
The seller referred to in these Conditions of Sale is the
Co. la. It is understood and agreed that f. a. s. vessel means delivery by the carrier alongside the vessel or at the wharf, pier, or other customary place of receiving goods destined for shipment by the vessel. The seller may, at its option, tender to the purchaser or his agent the usual ship's receipt or a prepaid inland bill of lading from the works to the port of shipment, providing for free delivery by the carrier within the usual lighterage or railroad delivery limits of the port. Tender of such ship's receipt or inland bill of lading shall constitute full and final delivery. In every case, the purchaser agrees to furnish the seller, promptly after the sailing of the vessel, a customhouse bill of lading properly signed, checked, and endorsed, as evidence of exportation.
1b. In case the seller elects to tender to the purchaser the usual ship's receipt, the purchaser agrees to furnish the seller, on demand, the name of the vessel by which shipment is desired, and such other shipping instructions as may be necessary; and the seller undertakes to place the goods alongside the vessel, if sufficient time be allowed for delivery by the carrier and the vessel in question will receive the goods, but the seller shall not be liable for expenses arising from failure of the carrier to make delivery within the specified time.
1c. In case the purchaser does not furnish the seller, on demand, the name of the vessel and such other shipping instructions as may be necessary, or, in case the purchaser designates a vessel of which the date of sailing is such that the goods become subject to charges, (1) any demurrage or other charges made by the carrier for detention of cars, unloading, storage, etc., and any damage to the goods consequent upon such detention or unloading will be for the purchaser's account and risk, and (2) the seller may, at its option, tender to the purchaser or his agent an order on the carrier to deliver the goods to the purchaser at the place of delivery designated by the carrier, and the tender of such delivery order shall constitute full and final delivery.
1d. Delivery as hereinabove provided, namely, by tender to the purchaser or his agent of such ship's receipt, inland bill of lading or delivery order shall entitle the seller to immediate payment in full for the goods covered by such documents, without prejudice to the subsequent adjustment of just claims on the part of the purchaser.
le. The seller shall not be responsible for the arrival of the goods f. a. s. vessel nor for loss or damage in transit from the manufacturer's works, and in case of such loss or damage shall be under no obligation to replace goods so lost or damaged.
[NOTE.—The remainder of this statement of "General Conditions of Sale F. A. S. Vessel” is precisely the same as in the "General Conditions of Sale, C. I. F. and C. & F. Sales” (above), beginning with the heading "Excusable delays.” This remaining portion, therefore, is not reproduced here.]
GENERAL CONDITIONS OF SALE F. O. B. MILL
The seller referred to in these Conditions of Sale is the
Co. 1. It is understood and agreed that f. o. b. mill means delivery free on board cars at the manufacturer's works, and any allowance or prepayment by the seller of freight charges, whether included in the sales price or paid for the purchaser's account, shall not extend the obligations of the seller with respect to delivery, nor shall the seller be under any obligation to replace goods lost or damaged in transit. Unless otherwise agreed in writing, any prepayment of freight charges by the seller shall be for account of the purchaser, and shall be added to the amount of the invoice and repaid by the purchaser on presentation thereof.
ROUTING 2. If the sales price be inclusive of freight from the manufacturer's works to an agreed destination, the seller shall be entitled to select the carrier and routing. If the freight charges are not included in the sales price, the purchaser shall be entitled to se any routing officially authorized and published by the transportation companies, provided he advises the seller of such routing at the time of placing the order. The seller, however, reserves the right to change to any available route if inability to secure cars promptly, or other reasons, would involve delay in forwarding goods over the route selected by the purchaser.
3. If the sales price be inclusive of freight to an agreed destination, it is understood and agreed that such price is based upon the lowest official freight rate in effect at the date of the sale, and any difference between such rate and the rate actually paid when the goods are forwarded from the manufacturer's works, whether such difference results from change in rate or change in route, shall be for the purchaser's account, that is to say, any increase shall be added to the price and any decrease shall be deducted therefrom.
4. It is understood and agreed that in no case does the sales price, even although inclusive of freight, cover the cost of any insurance, but if the route selected as above provided involves movement of the goods by water, or by rail and water, for which the freight rate does not include insurance, the purchaser will repay to the seller the cost of such marine insurance as the seller may effect.
[NOTE.—The remainder of this statement of “General Conditions of Sale F. 0. B. Mill” is precisely the same as in the “General Conditions of Sale, C. I. F. and C. & F. Sales” (above), beginning with the heading “Excusable delays.” This remaining portion, therefore, is not reproduced here.]
C. EXAMPLE OF AGREEMENT BETWEEN AMERICAN
EXPORTER AND FOREIGN DISTRIBUTOR
Following is the text of the standard agreement made between a prominent American exporting company and the foreign distributor who engages to handle the line of goods in a given territory:
DISTRIBUTOR AGREEMENT THIS AGREEMENT made this.--.
Co., a Delaware Corporation (hereinafter referred to as the company), and
(hereinafter referred to as the distributor). WITNESSETH : In consideration of the mutual covenants hereinafter contained and for the purpose of exploiting the sale within.
(hereinafter referred to as the territory), of_
(hereinafter referred to as the material), as listed in the price sheets and catalogs issued by the company, it is agreed :
SECTION 1. The company will, during the term of this agreement, sell to the distributor and the distributor will purchase from the company material to be resold by the distributor in the territory. The distributor shall devote its best efforts for the adequate exploitation and sale of the material within the territory and shall maintain an organization sufficient therefor.
SEC. 2. The distributor shall not buy, sell, or negotiate for the sale of (1) material for use outside of the territory, nor (2) material of other manufacture that may in any way compete with that of the company without first obtaining the telegraphic or written consent of the company.
SEC. 3. The sale of incandescent electric lamps, electric household appliances, refrigerators, merchandising material and apparatus not specifically enumerated above is not included within the provisions of this agreement.
SEC. 4. The company shall sell the material to the distributor at the prices listed on the price sheets and catalogs currently distributed by the company from time to time, less the discounts authorized thereon. Any material not included in said price sheets or catalogs shall be the subject of special written or telegraphic quotation by the company, on request.
SEC. 5. The distributor shall promptly advise the company whenever special prices, shipping promises, terms, or other conditions are required to enable the distributor to secure business not otherwise obtainable. In such cases all elements relating thereto shall be agreed to in writing, or by telegraph, by the company and the distributor before the final closing of the order and shall not be used to establish a precedent.
SEC. 6. Unless otherwise authorized by the company all prices to the distributor shall include the usual export boxing, and shall be f. o. b. cars at point of shipment. Special packing may be charged for extra, at cost.
SEC. 7. The company may change or withdraw any prices or discounts at any time by telegraph or written notice. If, prior to the receipt of notice of any such change or withdrawal, the distributor shall have made any tenders based on special quotations furnished by the company or upon price lists, then the company will accept orders from the distributor in fulfillment of such tenders, provided such orders are received by the company at New York in the United States of America within 60 days (a) after the date of such special quotations, or (6) after the date of any notice of a change or withdrawal of any such listed prices or discounts; except that the company reserves the right to make special quota
tions binding for a less period than 60 days but in such event will so advise the distributor at the time of making said special quotations.
Sec. 8. The company guarantees the material to have the capacity and performance stated in the price lists or catalogs or submitted in its special written quotations, but the distributor shall assume all responsibility with regard to the sufficiency and suitability of said material for actual requirements in each instance. The company assumes no contingent liability for failure of material to meet the guarantee. All the material shall be carefully inspected and tested during or upon completion of manufacture, but any special tests required by the distributor may be charged for by the company, extra, at cost.
Sec. 9. The company will refer to the distributor for negotiation all inquiries for material received from or for the territory, unless other procedure appears advisable, but the company reserves the right, at its option, to negotiate and sell direct to others in the territory. On any such direct sales by the company the distributor will be compensated by such a commission, if any, as in the judgment of the company may be warranted by the assistance rendered by the distributor and may be justified by the price obtained.
Sec. 10. Unless otherwise mutually agreed, all orders shall be payable net cash in currency of the U. S. A. upon presentation of shipping documents in New York.
Søc. 11. The company may take such steps as it considers desirable to promote the sale of the material in the territory, including the right at its option to send one or more representatives to spend the whole or a part of his or their time in the territory.
SEC. 12. The company shall not be responsible or liable for any loss, damage, detention, or delay caused by fire, strike, civil or military authority, insurrection or riot, railroad embargoes, lockout, tempest, accident, breakdown of machinery, faulty castings or forgings, delay in delivery of material by other parties or by any other cause which is unavoidable or beyond its reasonable control; nor in any event for consequential damages.
SEC. 13. If the distributor delays the shipment of any order which the company has completed for or on its behalf, payment shall be made therefor by the distributor as though shipment had bee made, whereupon the material will be marked as the property of the distributor who shall pay to the company from time to time all storage and insurance charges thereon while such material is in the company's possession.
Sbo. 14. The distributor shall not act as the agent for the company under this agreement, nor shall the distributor have any right or power hereunder to act for or to bind the company in any respect or to pledge its credit.
SEC. 15. No licenses are granted or implied by this agreement under any patents owned or controlled by the company or under which the company has any rights, except the right to sell and use material furnished by the company. No rights to manufacture are granted by this agreement.
Sea 16. Unless cancellation shall be otherwise effected by mutual consent of the parties hereto, this agreement shall be and remain in force from and after the day of
19----, until either party gives to the other written notice of its intention to terminate the same on a day to be specified 3 months after the date when said notice is given, whereupon this agreement shall accordingly be terminated; except that if either party shall become insolvent, or if any petition in bankruptcy shall be filed by or against it, or if a receiver or trustee shall be appointed for any part or all of its property then this agreement may be terminated by the other party upon written notice of its intention to terminate the same on a day to be specified not less than 5 days after the date when said notice is given.
SEC. 17. The rights conferred on the distributor by this agreement are not assignable or transferable without the written consent of the company.
Sec. 18. In the event of any dispute between the parties hereto in any way arising or growing out of this agreement the same shall be referred to three arbitrators, one to be appointed by the distributor, one to be appointed by the company, and a third to be mutually agreed upon by the two arbitrators so appointed. The decision of a majority of the three arbitrators, including the apportionment of the expenses of the arbitration, shall be final and binding upon the parties hereto. The meetings of such arbitrators shall be held in the city of New York unless it shall be mutually agreed to hold such meetings elsewhere.
SEC. 19. This agreement shall be construed as having been made in and under the laws of the State of New York in the United States of America and shall be subject to the construction placed upon it by the courts of such State.