This Q&A section aims at providing a quick answer to some of your questions. The answers are based on our knowledge and experience and are intended as guidance.
Please note that the information contained in these answers is not formal legal advice. If you would like to receive such advice, you can contact a legal professional.
If you would like us to address a certain topic in this Q&A, let us know here.
IMO Reference Numbers
Regulation 13 of Annex VI MARPOL applies to all diesel engines with a power output of more than 130 kW which are installed on a ship constructed on or after 1 January 2000 or which have undergone a major conversion on or after 1 January 2000. The Regulation sets limits for NOx emissions and requires each engine to be tested for compliance.
Under the NOx Technical Code, there are three methods to test the engine’s NOx emission levels:
- The on-board Parameter Method (Art. 6.2 of NOx Technical Code) hereinafter the “Parameter Method” or the “Method”.
- The on-board simplified measurement method (Art. 6.3 of NOx Technical Code).
- The on-board direct measurement and monitoring method (Art. 6.4 of NOx Technical Code).
It all starts with a parent engine test on a testbed. The components that affect the NOx emissions are noted and stamped with an IMO reference number by the engine maker. If the engine complies with NOx limits, then it is issued an Engine International Air Pollution Prevention (EIAPP) Certificate. The next step is surveying the engine onboard the ship but before it is put into service. If the engine complies then the surveyor issue an International Air Pollution Prevention (IAPP) Certificate.
The method used, the components, and their IMO numbers are all noted in the Technical File of each engine. When engines from this model are used in operation, the surveyor can then check if the components fitted on the engine match the ones used during the parent engine test. If they do, then it is assumed that the engine is operating within the required NOx limits.
NOx-affecting components are those which can affect the levels of NOx emissions from an engine. Some examples are fuel nozzles, piston rings, piston heads, cylinder head and liner, camshaft, etc.
The Technical File (TF) is a document that accompanies each engine operating under Regulation 13 of MARPOL Annex VI. It contains the engine settings, emission measurement method, NOx-affecting components installed on the engine. In case the engine undergoes a major conversion, the Technical File must be amended to reflect the changes.
The purpose of IMO reference numbers is to allow surveyors to check compliance with NOx emission limits. The surveyor looks at the components fitted on the engine and compares their IMO Reference Numbers with the ones noted in the engine’s Technical File.
The answer is not entirely clear. Some engine makers claim that they are the only ones with the necessary technical knowledge to confirm that the supplied parts correspond to those originally tested on the parent engine. As such, they also claim that only they can stamp parts with IMO reference numbers.
At the same time, the IMO regulations do not specify who can stamp components. Essentially, the IMO reference numbers allow surveyors to confirm that the parts fitted to the engine corresponds to those fitted during the parent engine test.
One of the nine principles of IMO states that legislation should not seek to distort competition in the market. Our interpretation is that unless stated otherwise, the NOx regulation must be interpreted in a way that permits competition i.e. allows parties other than the engine maker to stamp components with the relevant IMO reference numbers.
In practice, however, if you stamp your parts with IMO reference numbers, you might get accused of passing off (read more here). What you could consider is stamping the component with your own number and, in your quotations and order documentation, using the “corresponds to” symbol (≘) to show that the component is essentially the same as the one fitted during the parent engine test, e.g. [your own number] ≘ [IMO reference number].
Yes, provided that you are the manufacturer of the components and they are not reverse-engineered. If you use the symbol then you are also responsible for proving that the parts actually correspond to those originally tested in the parent engine test. Because of the need to prove that they correspond, this strategy may only be practical if the components you are selling come from the original manufacturer of the original components. The original manufacturers often produce components for the engine builder and the aftermarket simultaneously. These components are usually of the same quality, made on the same machinery and according to the same drawings. Thus, the original manufacturer would probably have no difficulty in proving that the parts correspond.
The situation is different with reverse-engineered components
Passing off is generally defined as presenting goods and service in a way that creates confusion in the mind of the customer as to the origin of the goods or services they offer. This also covers unintentional misrepresentation. Read our success case here for more information on a mistake in this regard and how to handle it.
This is particularly important for EMISA members as well as all independent companies that offer spare parts. An example would be stating on your website that you “sell parts for X engine” instead of “parts suitable for X engine”, when in fact you are selling alternative parts. The first phrase might create confusion in the mind of the customer that you are somehow affiliated with the engine maker or are selling original parts. This could potentially lead to you being accused of passing off your parts.
When reverse-engineering components, the issues are usually more practical than legal. Let’s say that you have reverse-engineered an original component and stamped it with the “corresponds to” symbol to show that it corresponds to the component fitted during the parent engine test. The customer then buys it and installs it on their ship. If the surveyor does not accept the component, then usually they will give the shipowner two months to change it or prove that it corresponds. If the shipowner is not able to prove that, then you would have to prove it.
When reverse-engineering components, we suggest you get at least three samples of the original component from three different batches. That way you could get a realistic idea about the tolerances. It might be good to set your own tolerances somewhere between the ones you find in the original components, ideally making them “tighter” than the original ones.
Please note, that in the end classification societies can have a lot of decision-making power and can either accept or decline the component. We are not aware of a guaranteed method to ensure acceptance. Unfortunately, there are no relevant certification procedures for reverse-engineering which makes it more difficult to deal with reverse-engineered parts.
The meaning of the term “OEM” is somewhat disputed. Generally, it signifies a company that manufactures components or other equipment using its own drawings, design, and manufacturing facilities. These components are then sold by other companies under their own brand or as part of their product. These companies are often referred to as Value-added Resellers (VARs), whenever they add features
However, in the marine industry, engine makers have referred to themselves as OEM, which is not always true. In most cases, the production of the parts is outsourced to a specialised manufacturer, which is also sometimes referred to as OEM. In reality, engine manufacturers often only assemble the engines, while the components are produced by the OEM.
Intellectual property (IP) comes from the creation of a mind, e.g. an invention, text, design, photograph, logo, etc. IP grants the owner certain exclusive rights which can be transferred to other persons. IP protects the creative process and promotes progress and innovation. It also acts as an incentive for creators and inventors. Most IP rights only last a limited time to allow for the work to be studied and copied for the benefit of humanity.
Knowledge of intellectual property rules can help avoid any legal trouble when producing, marketing, and selling your parts. It can affect many aspects of your business, e.g. the drawings you use for manufacturing, the photos in your marketing materials, the brand names on your website, etc.
A patent is an exclusive right that is granted for an invention. The invention can be either a product or a process that generally provides a new way of doing something. It can also be a technical solution to a problem. To get patent protection, the inventor must disclose certain details to the public.
When applying for a patent, you should consider some aspects such as:
- Patent protection usually lasts 20 years. After that, your invention will no longer be protected.
- Registering a patent requires you to disclose details about your invention. Оther parties can study and try to achieve the same result without breaching patent protection.
- Applying for a patent can be a costly and time-consuming process and there is no guarantee that you will be granted protection.
With this in mind, you can also consider keeping your invention as a “trade secret”.
You can use our Patent Research Service. Contact us here to learn more.
A trade secret is a design, instrument, pattern, formula, practice, process which is not generally known to the public. It may also not be easily discovered. A business may get an advantage over its competitors if they have trade secrets related to its products or services.
It requires no official registration and its protection is the responsibility of the person who keeps it. Trade secrets are normally protected by non-disclosure agreements, confidentiality clauses and non-competition clauses. Unlike a patent, if the trade secret is leaked then there is no protection for it anymore. However, if it is kept a secret, then it can potentially last for an indefinite period.
A trademark can be a recognisable logo, word, expression, design, image, or other creation. Trademarks are used to identify the origin of the product on which they appear. They can appear on the label, packaging, or on the product itself. Trademarks can be registered which provides more protection in case of misuse. However, if a trademark is not used frequently, then it loses its protection. This is done to avoid people registering trademarks just so no one else can use them.
Generally, you could mention the name as long as it is used in a normal sentence and not in a “trademark-like” manner.
The phrase “suitable for” could allow you to advertise your products while minimising the risk of being accused of passing off by including the phrase before the engine brand and model on your advertorial materials.
For example, you could phrase your advertisement as follows: “We offer spare parts suitable for [engine brand] [engine model].” Phrasing it like this is more likely to not confuse the customer as to the origin of the parts you are selling. If you use “spare parts for [engine brand] [engine model]” then the customer could potentially think that you are somehow affiliated with the engine maker or that you are selling original parts.
In general, it might a good idea to check your marketing materials for any instances where the customer could potentially be confused about the origin of your parts or services.
You should avoid putting any trademarked names in the domain name of your website. For example, if you were to register a website www.wartsila-spares.com, then it is possible that a Court would find it to be creating confusion in the mind of the customer.
Copyright is “the right to copy” when it comes to creative works. It does not cover ideas or information but rather how they are expressed e.g. books, textbooks, scholarly articles, drawings, designs, photos, etc. Single words, names, and short phrases are generally not protected by copyright but they could be trademarked.
Under the Berne Convention, ratified by nearly 180 countries, copyright is created automatically. If you create a work, you do not need to register it and it is not necessary to put the copyright symbol (©) on it. However, the work has to be creative and original and be reduced to a tangible and fixed form. To qualify as a creative work, it must involve some skill, labour, and judgement. The creator of the work retains the copyright unless it is covered by a contract or has been transferred.
As a general rule of thumb, one should never assume that a work is not protected by copyright, even if it is not explicitly stated in the work. With some works, it is very easy to identify whether it is protected as it contains the copyright symbol or some sort of statement on the matter. If the work does not contain any such information, then you can try to research online what is the original source of the work and asking the copyright owner directly.
In most cases, the company holds the copyright for any works created by their employees. However, it is possible to include a clause in the agreement that says otherwise.
You can start off by identifying the owner and contacting them with a request to use their work. When contacting the owner, we suggest you make clear in what way you will be using the work and for how long. This process can take a while so it might be good to plan ahead to avoid delays. Most importantly, it is recommendable to always get permission from the owner in writing. Having written evidence can help make things clear in case of a legal dispute.
In some instances, you can use a copyrighted work if it is “fair use”. This can vary from country to country, but generally, the following might be allowed:
- Using the work for educational or research purposes.
- Critique and review.
- Personal, non-commercial use (e.g. backups of software if it will not be available to others).
- News reportage (excl. the photographs).
- Quoting text if there is proper referencing.
In certain cases, copyright protection also lasts for a limited amount of time. However, you should make sure to always check if a work is copyright protected.
Manuals, codebooks, drawings, etc.
Generally, all manuals and codebooks for engines are copyright protected and the copyright lies with the engine manufacturer. That is why you should consider taking care not to infringe their copyright.
If you want to acquire a manual or codebook, you should consider contacting the owner of the copyright.
If you stumble upon a free manual or codebook online, even saving the file to your computer is considered “copying” and could potentially result in a copyright infringement.
Depends on how you obtained them. If they were obtained with the consent of the holder of the copyright and they have authorised to forward them to your clients, then yes, you could. But if there was no consent, you should consider not forwarding them to anyone.
That depends on some factors, namely:
- How you obtained the drawing.
- If there was consent from the engine maker.
- If the drawing is protected under Intellectual Property.
Generally, any unlawfully obtained document should not be in another company’s possession.
The same rules apply as with manuals. We suggest you to avoid forwarding any documents (especially in the course of trade) initially belonging to another company, especially if you do not have permission to do so.
The General Data Protection Regulation is a legal instrument of the European Union that came into force on 25 May 2018. The Regulation applies to all businesses and governmental bodies operating within the European Union. This includes businesses and governmental bodies from outside the EU which operate within its territory. It covers all personal data collected and used by these parties in any way.
The definition of personal data is very broad. It includes any information that identifies an individual or could be used to do so. This includes, but is not limited to, email, IP address, name, CCTV footage, car registration number, phone number, etc.
Anonymous data, which cannot be used to identify an individual, is not covered by the GDPR. Also, data collected and processed by an individual acting in their personal capacity is not covered either.
Any sort of handling of personal data is considered “processing”. That includes storage, use, copying, archiving, sharing, deleting, among others. The definition is also very broad and includes any processing by automated means.
That depends on some factors, namely:
- How you obtained the drawing.
- If there was consent from the engine maker.
- If the drawing is protected under Intellectual Property.
Generally, any unlawfully obtained document should not be in another company’s possession.
1. To collect and process data, you need legitimate grounds to do so:
- You have consent from the person.
- The processing is necessary for relation to a contract which the individual has entered into or wishes to enter into.
- There is a legal obligation such as payroll, taxes, and so on.
- Processing is necessary to protect the individual's vital interest, for example, following an accident.
- Processing is required as part of the administration of justice (e.g. required for court proceedings).
- Processing is carried out in accordance with the legitimate interests of the business doing the processing (note: this may be overridden by the interests of the individual if the processing is “unwarranted”).
2. Individuals have the right to:
- Receive a copy of any data being held about them, but only about them. This right can be overturned if the cost of disclosing it would be disproportionate.
- Withdraw consent.
- Have inaccurate data about them rectified or destroyed in certain cases.
- Object to processing that is likely to cause or is causing damage or distress to them (the degree of distress must be more than just irritation).
- Stop you from processing their data for direct marketing purposes.
- Object to decisions being taken by automated means.
- Obtain their personal data and transfer it or use it for their own purposes.
- Claim compensation for damages caused by a breach of the Regulation.
3. Data must be handled fairly:
- Unless it is obvious, you have to be open and honest about how you process the data.
- Process the data only in ways which the person would reasonably expect.
- Do not use their data in ways that would have an unjustifiable negative effect on them.
4. Data must be handled legally
- The processing of data should not breach:
- Any law such as Human Rights legislation.
- Any duty of confidentiality, for example, personal banking details or medical information.
- Any contractual obligation.
- Intellectual property rights.
5. Data processing requires consent
Specific consent is always required, unless consent is implied in the way data is collected. If specific consent is required, you should always inform the person about:
- Who the data controller is.
- What the purpose of the data collection is.
- How the data will be processed.
- What the potential security risks might be.
6. Data should be kept to the minimum and where appropriate accurate
Data should only be kept which is relevant. Ask yourself:
- Why is this data needed?
- Can this data be destroyed or deactivated/archived securely?
- How important is it that the data is kept up to date?
- Where accuracy is relevant, do you know the source of the data, the date of the data and when it was last verified?
7. Data must be held securely
The level of security should be appropriate to:
- The kind of data you handle (i.e. how sensitive it is).
- The amount of data held.
the potential harm which could result from improper use, accidental loss, hacking or destruction.
- You should also consider password protection, limited access, encryption, physical security and how to destroy data.
8. Access to data should be minimised
- Check social media privacy settings and choose the most privacy-friendly setting.
- Allow access only to those who need it.
- Limit the extraction of data in bulk to authorised persons.
9. Transfer of data outside the EEA must be strictly controlled
GDPR does not allow you to transfer data outside the European Economic Area (EEA) unless adequate levels of protection exist in the destination country.
- In assessing the adequate level of protection consider the data protection standards in the destination country and the nature of the data being transferred.
- Specific permission should be obtained for transmission outside the EEA, for example, any personal data, photographs, etc. on websites.
- Extra care must be taken in assessing the potential damage if data is to be transferred outside the EEA.
- Consider providing protection by binding contractual clauses and anonymisation/pseudonymisation.
- Limit the amount of data transferred to minimise any risks.
10. Data breaches must be reported
All security breaches must be reported to the relevant authority in your country unless your company falls under the exemptions.
11. What to do in case of a breach:
- Make sure that your company has a containment and recovery plan.
- Assess the risks and consequences for individuals.
- Notify the authorities if the consequences are potentially serious.
- Investigate the cause and take steps to prevent it from happening again.
12. Data Risk Assessment
It is crucial to carry out an audit of all data which you hold and check how you process it. You also need to assess the potential risks for individuals in case the data is lost, damaged, leaked or stolen. Based on this, you can set up your security. This process should be recorded in writing and is an essential part of proving compliance.
Here are 20 steps we recommend:
- Within your company, you can create a group or appoint a person to oversee data protection.
- Ensure that all digital devices with access to personal data have password protection.
- Delete data from old/redundant devices and destroy them.
- Carry out an audit of all data held by your company.
- Analyse the data and categorise it based on the risk of damage to the individual if it is released to the public.
- Sensitive information such as payroll, bank details, medical information, disciplinary information, should have special protection.
- Limit access to the data to only those who need to access it.
- If data needs to be extracted in bulk, limit that to authorised people only.
- All data that is no longer required has to be deleted or secured if it is not possible to delete it.
- Consider digitalising all archive data. This is easier to secure with passwords, encryption, storage in a safe, etc.
- All paper documents which contain personal data must be destroyed properly, e.g. with a shredder. You can also hire a specialised firm which will also send you proof of destruction.
- Train all staff on the importance of data protection.
- Regularly review your data and the steps you have taken to protect it.
- Be especially careful with data that is being transmitted outside the EEA which is covered by special regulations. An example, are data or photos put on your website.
- Get written permission for any data or photos put on your website.
- Even though it is not required, it might be good to get written permission from your staff for processing their data for the purpose of payroll and management reviews.
- You can use personal data such as names and contact details collected from business contacts for mailshots and other marketing activities without the express permission of the contact. There is implied permission, but this implied permission is limited to business activities for which the contact would have expected you to use their data, i.e. if you collected personal contact data as part of your diesel engine business, you can use the data for a mailshot related to diesel engines and associated equipment like separators, but you cannot use that data for, say, a jewellery mailshot without express permission.
- If you use mailshots, you have to make it possible for people to unsubscribe immediately.
- Individuals have various rights to object to you processing their data. Although you do not have to act on this objection in all cases, we recommend that you do. Individual rights must be respected.
- Create a recovery plan in case of a breach. This should include:
- A containment and recovery plan.
- An assessment of the risks to the persons involved.
- Notification to the authorities if the consequences are potentially serious.
- Contacting the individuals if the consequences are potentially serious.
- Investigate the cause of the breach and take remedial steps to prevent reoccurrence.
Yes. Generally, you have to ask for consent clearly and explicitly and state the purpose of collecting the data. One exception to this is data that is necessary to complete a contract or which is necessary under a legal obligation, e.g. personal data needed for employee payroll, taxes, etc. Consent can also be implied. If someone gives you their business card, for example, then they are voluntarily sharing their data with you for the purposes they intended at the time.
Checking the data constantly is not required. However, you should take reasonable care to ensure accuracy whenever it is important (e.g. keeping a record of the data source, the date the data was collected, when it was verified, and so on).
Yes, generally a person has the right to request you to stop processing their data unless it is covered by one of the exceptions in the GDPR. However, if the person asks you to remove their data from your mailing list, then you have to do so immediately.
The first thing you need to do is to check the identity of the person making the request. If it is not the person in question (or their lawyer/representative), you have to check if they are authorised to see the data. You should provide the data if you reasonably can, but you may charge a reasonable fee for the service, and you can insist on payment upfront.
Generally, you are not obliged to show them the data which includes data from third parties. You can do it as long as that third party consents to it.
If they ask you to stop direct marketing, then you have to stop. You do not have to give access to a copy of their data if the costs would be disproportionate, but it is advisable to follow their request as long as it is reasonable. If you breach the rules, then the person might have a right to claim compensation.
In general, no, unless you are under a legal obligation to do so.
This depends on your business and what you need for it. The data that you hold and retain must be relevant for your business. A good example of unnecessary data is the CV of a previous job applicant who you do not intend to hire in the future. If you have data that cannot be destroyed, then you should consider archiving and protecting it.
In this case, you should investigate the facts and correct/delete any inaccurate data. It is also important to keep the person informed that you did so.
From an EU perspective, competition law aims to regulate competition to improve efficiency. That means increasing consumer welfare and helping to allocate resources optimally. Competition law also aims to protect consumers and smaller companies from larger corporations that are either economically powerful or join in groups to act as one unit. The last goal of competition law is to help create a single European market.
Perfect competition is often considered a utopia. That is why we talk about workable competition. It is the most desirable of the ones that are possible to achieve in real life. It is important to note that competition is a dynamic process and can change constantly.
A competitive market is one in which every good is priced at the cost of making it. This gives the producers and sellers just enough profit to maintain investment in the industry. At the same time, every consumer willing to pay the price will be able to buy it.
The two most serious infringements are illegal contracts and agreements (cartels) and the abuse of a dominant position.
Cartels can take many forms and they do not need to be official to be anti-competitive. The most common examples are:
- Price fixing
- Market sharing
- Sharing of confidential information between competitors
- Vertical restrictions which lead to portioning of the market (e.g. import and export bans)
- Agreements to limit production
- Distribution agreements between suppliers and re-sellers where, for example, the price for customers is imposed by the supplier
Under EU law, all agreements and exchanges of information between competitors that reduce their strategic uncertainty in the market can be seen as anti-competitive, including unilaterally via phone, email, or meetings.
When a company has a large enough market share (usually more than 40%), it is seen as holding a dominant position. Examples of abusing this position are:
- Charging unreasonably high prices
- Charging unrealistically low prices, which can drive competitors out of the market
- Discriminating between customers
- Forcing trading conditions in their business partner
The conduct of an undertaking may be abusive when it negatively affects consumers directly or indirectly through its effects on competition. In general, the effects of the conduct are more important than the conduct itself. A dominant undertaking has a special responsibility not to allow its conduct to negatively affect competition.
Their conduct might not be abusive when there is an objective justification behind it (e.g. refusing to supply to a customer because of their poor creditworthiness). However, the dominant undertaking is responsible for showing that their conduct is proportionate.
Under EU law, the main sanctions for the above infringements are:
- Prohibiting the illegal action
- Fine of up to 10% of the offender’s turnover
- Very high fines for serious infringements
- Making the restrictive agreements void
- Paying damages
- Criminal sanctions (in certain countries)
- “Informal” sanctions (e.g. bad press)
- Investigations by other competition authorities
The two most relevant competition rules in the EU are Article 101 and Article 102 of the Treaty for the Functioning of the European Union (TFEU). Click the links to read them. Article 101 TFEU covers cartels and prohibits certain contracts and agreements. Article 102 TFEU prohibits the abuse of a dominant position. These rules are supplemented by other regulations, such as:
- The Merger Regulation that prohibits concentrations that significantly impede effective competition;
- State Aid Rules, that prohibit aid from the Member States to companies that distort competition.
Yes. Article 101(3) TFEU states that the agreement is exempt when:
- It contributes to improving the production or distribution of goods or to promoting technical or economic progress while allowing consumers a fair share of the resulting benefit
- It does not: (i) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives and (ii) affords such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.
Examples of such exemptions are:
- Restrictions necessary to encourage the spread of innovative technology.
- Restrictions based on objective technical criteria.
- Restriction necessary to protect confidential information.
- Block exemptions and Guidelines.
- Block exemptions on horizontal and vertical agreements, technology transfer agreements and the insurance sector and the relevant guidelines.
The assessment of the abuse of a dominant position is a complicated process. In simple terms, two questions need to be answered:
- Is the undertaking dominant?
- If it is, is it abusing its dominance?
To answer them, three aspects must be considered:
- The definition of the market in which the undertaking is alleged to be dominant (the relevant market).
- Whether it is dominant within that market.
- In which territory is the dominant position held?
Terms and Conditions
Terms and Conditions (T&Cs) of sale are the general conditions under which your company sells goods. Their main purpose is to identify the rights and obligations of the parties that enter into a contract.
T&Cs can include general and special conditions. General conditions usually relate to matters such as the applicable law and jurisdiction, conflict resolution, third parties’ right, etc. Special conditions can cover the payment, price, warranties, penalties, etc.
Many agreements nowadays are concluded via email. It would be good to incorporate your T&Cs in the contract. Following the chain of “offer and acceptance” is also crucial if you want to make sure that your T&Cs apply. For example, if you (as the seller) make a quotation for parts and the buyer responds with a variation of the terms, that would be a counteroffer. If you accept it, then the buyer’s T&Cs will apply. If you return an offer after that and the buyer agrees without reservation, then your T&Cs will apply.
The buyer must be aware that your T&Cs apply. You can make sure that the contract explicitly refers to your T&Cs, including a link. It is also good practice to always mention that you conduct business based on your T&Cs. Lastly, including them on your website is recommendable as well.
Some of the most important clauses to consider are:
- Applicable law and jurisdiction
- Arbitration clause
- Force majeure
- Retention of title
- Limitation of liability
- Place of delivery
It is crucial to make a distinction between the two terms. “Applicable law” refers to the laws that govern the agreement, as chosen by the parties. “Jurisdiction” refers to the courts which will rule over any potential disputes.
For example, if you T&Cs only mention that the contract is subject to the laws of France, that does not mean that a dispute will be handled by French courts. If you want to make sure that the dispute will be covered by French courts, you have to include that in the clause as well. The opposite is also true.
The warranty is an undertaking, given by the warrantor (seller) that the goods are up to a certain standard or parameters as advertised. It also ensures that the goods are not defective.
If something is wrong with the goods, the warrantee (buyer) can request the warrantor to repair the faults. Usually, warranties have a limited time scope and also depend on how the warrantee used them. For example, if the warrantee used the goods for a purpose that is not intended and they get damaged, the warranty might not cover the repair costs.
The arbitration clause relates to using arbitration in case of a dispute, instead of national courts. Nowadays, it is quite common for contracts to include Arbitration clauses. The national courts might not always have the necessary expertise to rule over a complicated dispute. Some companies opt for arbitration also because it can be quicker. It is recommendable to check if your country has a good arbitration institute before choosing to include an arbitration clause.
The Force majeure clause covers extraordinary events which can prevent the parties from fulfilling contractual obligations. Such an event generally has to:
- Be external
- Make the performance of obligations impossible
- Be unforeseeable
- Be beyond the control of the party
- Not be for their risk
Common examples of force majeure are natural disasters, power outages, war, work stoppages, etc.
The Retention of title clause deals with the seller’s right to remain the legal owner of the goods until the buyer has paid the price in full. As long as the seller retains the title to the goods, he has the right to reclaim them from the buyer if the price is not paid in full.
All contracts of sale come with some degree of liability risk. This liability may come from a breach of contract, i.e. when the parties do not fulfil their obligations or infringe another party’s rights. The limitation of liability clause covers these situations and defines the parties' liability.
The Place of delivery cause defines where the goods will be delivered exactly. It helps avoid uncertainty in case of a dispute.
If the place of delivery is not defined in the T&Cs or the agreement, it is often assumed that the place of delivery is the seller’s domicile. If the goods need to be shipped, the place of delivery is often assumed to be the place where the goods are delivered to the carrier.