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General Terms of Sale of Merkel Jagd- und Sportwaffen GmbH

I. General
The following terms of sale shall obligatorily and exclusively apply to all contractual relationships of Merkel Jagd- und Sportwaffen GmbH (hereinafter also referred to as “Merkel” for short) vis-à-vis companies per § 14 BGB [German Civil Code] and other persons per § 310 Para. 1 p. 1 BGB. They are acknowledged through the grant or confirmation of contract, but at the latest upon the acceptance of the goods, and also apply to all future contracts. Merkel does not accept conflicting or deviating terms of the buyer unless their validity is agreed upon expressly in writing. These terms of sale shall also apply even if Merkel follows through without reservation with the conclusion of contract with knowledge of conflicting or deviating terms of the buyer or performs the delivery to the buyer without reservation.

All additional agreements require the written confirmation of both parties in order to be valid.

Offers by Merkel are subject to change without notice and not binding. In order to be legally valid, declarations of acceptance and all orders of the buyer require confirmation by Merkel in writing or by telephone. Merkel’s representatives do not have the authority to close deals. However, the copies of orders handed out by representatives of Merkel are considered as confirmation if Merkel does not contradict this within two weeks or does not send out a deviating order confirmation. If an order, a confirmation, or a request of the buyer is to qualify as an offer according to § 145 BGB, Merkel may accept this within two weeks.

The disclosure of information designated as “confidential” or the like to third parties by the buyer requires the express written consent of Merkel.

According to § 28 of the Federal Data Protection Act, in order to carry out the contractual relationship Merkel has the right to store, process and transmit for its own use data on the movement and payment of goods involving the buyers.

If individual provisions of these terms of sale should be or become invalid or impracticable in whole or in part, the remaining provisions shall remain unaffected by this.

II. Delivery/Transfer of Risk

Provided that no deviating written agreement exists, delivery "ex works" per INCOTERMS 2000 is agreed upon. The risk of transport (loss or damage) can be insured by Merkel upon the request of the buyer. The buyer shall bear the costs for this. The beginning of the delivery period is subject to the condition of written form and correct and punctual supply to Merkel. Compliance with Merkel’s obligation to deliver is contingent upon the timely and proper fulfillment of the obligations of the buyer, particularly the making of an agreed-upon advance payment. Merkel reserves the right to object to an unfulfilled contract. The time for delivery has been complied with if readiness for shipment has been communicated by said time or the object of delivery has left the plant. Partial deliveries are permissible.

The risk of an accidental destruction or an accidental deterioration of the object of sale is transferred to the buyer at the latest at the time at which the buyer has become overdue in accepting them ("Annahmeverzug"). For the rest, the danger of an accidental destruction or an accidental deterioration of the object of sale is transferred to the buyer as soon as the object of sale leaves Merkel’s plant or storage facility. Merkel is only liable for damages to the objects of delivery which are caused by Merkel’s employees in connection with the delivery and set-up only in the event of the intent and gross negligence of the employees or if a substantial contractual obligation (cardinal obligation) has been culpably violated. For the rest, the liability is limited to the amount covered by the liability insurance procured by Merkel. Merkel is not obligated to procure given types of insurance or a given sum insured. Merkel can release itself by assigning the coverage claims against the liability insurer to the aggrieved party. In the event that the liability insurer refuses its duty of liability, Merkel's own liability remains unaffected.

Merkel reserves the right to make slight changes to its products. Slight or technically unavoidable deviations in quality, color, weight, dimensions and design cannot be grounds for rejection. This agreement applies particularly in the case of additional deliveries.

Merkel is only liable for all damages including all consequential damages of the buyer due to delay if the underlying sales contract is a transaction where time is of the essence in terms of § 286 Para. 2 No. 4 BGB or § 376 HGB [German Commercial Code], provided that the buyer, as a consequence of an intentional or grossly negligent delay in delivery for which Merkel is responsible, is demonstrably entitled to claim that its interest in the continued fulfillment of contract no longer applies or to the extent that the delay in delivery is due to an intentional or grossly negligent violation of contract or a culpable violation of a cardinal obligation for which Merkel is responsible. For the rest, Merkel assumes no liability, particularly not for consequential damages of any kind. Provided that the delay in delivery is not due to an intentional or grossly negligent violation of contract for which Merkel is responsible, the liability for damages is limited to the foreseeable damages typically occurring. For each complete week of delay, this is generally a lump-sum compensation for delay in the amount of 3% of the delivered value but no more than 10% of the delivered value at most.

Merkel shall not be liable, even in the case of obligatory agreed-upon deadlines and fixed dates, for delays in delivery and service due to acts of God and due to events that make it difficult or impossible in a substantial and not merely temporary manner for Merkel to make the delivery – including, in particular, strike, official orders, fire, theft, lightning strike, storm damages and comparable cases of acts of God, also if they occur at suppliers or their sub-suppliers. Merkel has the right to postpone the delivery or service by the duration of the impediment plus a reasonable adjustment period or to withdraw in whole or in part from the contract due to the as-of-yet unfulfilled portion. If the impediment lasts longer than three months, the buyer is entitled, after the setting of a reasonable grace period, to withdraw from the contract in view of the as-of-yet unfulfilled portion. If the delivery time is extended or if Merkel is released from its obligation to perform, then the buyer may not derive any claims for compensation from this.

If the buyer defaults in acceptance or culpably violates other duties to cooperate, Merkel has the right to demand compensation for the damages incurred as a consequence including any extra expenses. Merkel reserves the right to further claims.

III. Prices/Terms of Payment/Termination of Contract

Provided that nothing else is agreed upon in writing, all price quotations are understood as being in € and the prices are considered “ex works" in terms of INCOTERMS 2000, including packaging, and uninsured.

Upon the request of Merkel, for contracts which contain delivery and service periods of more than four months after conclusion of same, negotiations are to be held regarding price adjustments if the prices for the required material or the labor and non-wage labor costs increase due to legal or agreed-upon changes by more than 5% overall compared to the time at which the agreement was concluded.

The legal value-added tax is not included in the prices. It is shown separately on the invoice in the legal amount on the day of billing.

Discount reduction requires special written agreement.

Provided that nothing else is agreed upon in writing, the purchase price is due net within 30 days from the date of invoice. Billing occurs upon readiness for shipment. The legal rules apply to the consequences of delay in payment, particularly the rights of Merkel to demand interest on arrears and to withdraw from the contract.

Payment is considered to have been made when it has been credited to Merkel’s account.

Banking charges which are not due in the country of Merkel as well as all credit charges, even if they are due in the country of Merkel, shall be borne by the buyer unless agreed upon otherwise. Differences in exchange in the case of payments in foreign currency shall be at the expense of the buyer.

The submission of checks and bills of exchange are only considered as payment after unconditional redemption. Bills of exchange are only accepted per special agreement. Payment by bill of exchange is not considered as cash payment and does not give entitlement to discount deduction. Upon acceptance of bills of exchange, they are utilized in the best way possible for the account of the sender. Discount charges paid in advance by Merkel shall be replaced in cash immediately after posting.

The buyer is only entitled to offsetting rights if its counterclaims have been determined in a legally binding manner or have been acknowledged by Merkel in writing. Moreover, the buyer is authorized to exercise a right of retention insofar as its counterclaim is founded on the same contractual relationship.

Merkel may at any time terminate with immediate effect successive delivery contracts such as installment delivery contracts and multiple delivery contracts in writing provided that substantial grounds for this are given. In particular, such substantial grounds are given if the buyer has committed a grave violation of contract which cannot be made up for or which represents a lasting violation of contract, or which can be made up for but has not been made up for within a reasonable time, or if bankruptcy proceedings have been initiated on the buyer’s assets or such proceedings are demonstrably impending, or if the buyer has been dissolved. All still-outstanding claims of Merkel against the buyer shall then become due immediately and any deferment agreement shall loose their validity.

IV. Warranty/Liability

Complaints due to quantitative deviations in a delivery or externally visible defects in the goods must be submitted in writing within at most 7 days after delivery. The delivery is considered to be approved in the event of untimely complaint. In the case of justified notices of defects, the buyer initially only has the right to supplementary performance. If the supplementary performance is unsuccessful, the buyer is entitled to demand either withdrawal or reduction at its discretion.

Any information and consultations of employees or designees of Merkel occur according to the best of their knowledge and ability, but are without engagement and non-binding.

Merkel is liable according to the statutory provisions provided that the buyer asserts claims to compensation or reimbursement of expenses (hereinafter: compensation claims) which rest upon intention or gross negligence, including intention or gross negligence of Merkel’s representatives or auxiliary persons, or if Merkel has culpably violated a cardinal obligation, or in the case of harm to life, limb or health or insofar as Merkel has assured guarantees. The compensation for the violation of a cardinal obligation is limited to damages occurring in a foreseeable, typical manner provided that there is no intention or gross negligence and insofar as there is no liability for harm to life, limb or health or due to assumed guarantees. For the rest, Merkel’s liability for compensation is excluded regardless of the legal nature of the asserted claim. In this respect, Merkel is particularly not liable for damages which have not occurred to the delivered object itself such as, for example, lost profit and other financial losses of the buyer.

Claims of the buyer for reimbursement of expenses are limited to the amount of the interest which the buyer demonstrably had in the fulfillment of the contract.

To the extent that Merkel’s liability is excluded or limited, this also applies to the personal liability of its employees, representatives and auxiliary persons.

The imperative provisions of the Product Liability Law remain unaffected.

There is no claim from warranty particularly in the event that the instructions for application or use enclosed with the delivery are not heeded unless those are incorrect in their essential point in the event of improper interpretation, loading or handling by the buyer or third parties, in the event of faulty corrective maintenance by the buyer or third parties, if interventions or changes have been performed by a technical shop which is not authorized by Merkel or the weapon has been damaged through the buyer's own repair attempts, and in the event of the delivery of used goods.

Rights of recourse of the buyer against Merkel per § 478 BGB only exist insofar as the buyer has not come to an agreement with its buyer extending beyond the legal warranty claims. If a claim is asserted against the buyer due to a defect, the buyer shall inform Merkel of this immediately. The buyer shall obligate its buyers accordingly provided that they are businessmen. Merkel reserves the right to fulfill claims asserted by third parties vis-à-vis the buyer in Merkel’s own name and to its own benefit. In this case, the fulfillment of the claims of the third party is considered fulfillment of would-be claims of the buyer.

V. Reservation of Proprietary Rights

Merkel reserves the right to ownership of the delivered goods as well as to images, drawings, calculations and other documents until all payments from all present and previous deliveries have been made. The goods may not be pawned or assigned as security as long as the transfer of ownership has not been completed. Until then, the buyer is obligated to treat the goods with care. Particularly, it is obligated to insure them at its own expense sufficiently against fire, water and theft damages at replacement value and to perform any necessary maintenance and inspection work at its own expense and in a timely manner. In the event of pawnage or other interventions of third parties prior to the complete transfer of proprietorship, the buyer must immediately inform Merkel in writing. Insofar as the third party is not able to reimburse Merkel for the judicial and non-judicial costs of a suit due to unlawful pawn age or other interventions, the buyer shall be liable for the resulting financial loss.

The buyer is entitled to resell the goods through ordinary course of business; however, the buyer by now assigns to Merkel all claims that arise for the buyer from the sale against its customers or third parties, independently of whether the goods were sold without or after further processing. The buyer remains authorized to collect on this claim even after the transfer. Merkel’s authorization to collect on the claim itself remains unaffected by this. However, Merkel commits not to collect on the claim provided that the buyer fulfills its payment duties from the collected revenues, does not fall behind in payment and, particularly, no request for the initiation of bankruptcy proceedings has been filed or there is no cessation of payment. If this is the case, however, Merkel may request that the buyer announces the assigned claims and its debtors, provides all information necessary for collection, hands over the respective documents, and informs the customer of the transfer.

If the value of the securities exceeds the secured claims by more than 10%, Merkel shall release securities of its own choice upon request by the buyer.

In the event of behavior contrary to contract by the buyer, particularly of delay in payment, Merkel also has the right to take back the goods. The repossession or exercising of the reservation of proprietary rights requires no withdrawal by Merkel. After the repossession of the delivered object, Merkel is authorized to exploit it. The proceeds of sale are to be credited to the liabilities of the buyer minus reasonable exploitation costs.

If the goods are processed or inseparably mixed with other objects not belonging to Merkel's assets, Merkel acquires the co-proprietorship of the new object in the proportion of the value of the goods (final invoice amount, including VAT) to the other processed or mixed-in objects at the time of processing. Moreover, the same provisions shall apply to the object arising through processing or mixing-in as for goods delivered with reservations. If the processing or mixing-in occurs such that the object of the buyer is to be regarded as a primary object, it is considered agreed upon that the buyer transfers co-proprietorship to Merkel proportionally and stores the thus-arising co-property for Merkel.

VI. Place of Fulfillment/Venue/Applicable Law

Suhl is the place of fulfillment for deliveries and payments. Provided that the buyer is a merchant, Suhl is the exclusive venue for all disputes in connection with the contractual relationship. However, Merkel has the right to sue the buyer at its general venue.

The relationships between Merkel and the buyer are subject exclusively to the laws of the Federal Republic of Germany under the exclusion of the German Private International Law and the UN Conventions Relating to a Uniform Law on the International Sale of Goods.

If one or more provisions of these General Terms of Sale are or become invalid in whole or in part, then the validity of the remaining provisions shall remain unaffected by this.

General Terms of Purchase of Merkel Jagd- und Sportwaffen GmbH

I. General
The following terms of purchase shall apply obligatorily and exclusively to all contractual relationships of Merkel Jagd- und Sportwaffen GmbH (hereinafter also referred to as “Merkel” for short) vis-à-vis businessmen per § 14 BGB [German Civil Code] and other persons per § 310 Para. 1 p. 1 BGB. They are acknowledged through the grant or acceptance of contract but at the latest upon the shipping of the goods, and also apply to all future contracts. Merkel does not accept conflicting or deviating terms of the supplier unless their validity is agreed upon expressly in writing. These terms of purchase shall also apply even if Merkel follows through without reservation with the conclusion of contract with knowledge of conflicting or deviating terms of the supplier or accepts the delivery of the supplier without reservation.
All other contractual arrangements are only valid after the written confirmation of both parties to the contract.
If individual provisions of these terms of purchase are or become invalid or impracticable in whole or in part, the remaining provisions shall remain unaffected by this.

Orders on the initiative of Merkel are subject to change and non-binding unless noted otherwise. Confirmations of the supplier of the orders on the initiative of Merkel require written confirmation by Merkel in order to have the legal effect of the conclusion of a contract.

Merkel’s representatives do not have the authority to close deals. However, the copies of orders handed out by representatives of Merkel are considered as confirmation if Merkel does not contradict to them within two weeks or does not send out a deviating order confirmation.

If an order, a confirmation, or other communication of the supplier is to qualify as an offering according to § 145 BGB, Merkel may accept this within two weeks.

The supplier must accept reasonable offers from Merkel regarding changes to the content of orders after conclusion of contract. Any additional or reduced costs and effects on the agreed-upon delivery/production dates must be considered accordingly.

The supplier is not authorized to pass on an order in whole or in parts to a third party or to have it fulfilled by a third party without previous written consent of Merkel.

Agreed-upon certifications regarding materials tests or confirmations of outbound controls form a substantial component of the delivery/service and must be sent together with the goods or the invoice to Merkel.

The documents, drawings, material specifications, and other information enclosed with orders are also a substantial component of the orders. These must, in addition to all information designated as “confidential” or the like, be kept secret from third parties and may be made accessible to third parties only with previous written consent of Merkel. This obligation to secrecy does not apply to such information that was already previously known to the supplier or has been made known to the supplier through an authorized third party, that is available to the public or is generally known, or which has to be disclosed due to sovereign order. In each of these cases, the supplier must inform Merkel in writing of the disclosure prior to or, at the latest, immediately after the disclosure.

Merkel reserves the proprietary rights and copyrights to all components of the orders as well as to all tools which Merkel leaves to the supplier. They must be used exclusively for order-based production and returned to Merkel in an unsolicited manner after the processing of the order. Merkel’s tools must be adequately insured at the expense of the supplier and maintained appropriately; the supplier must also have the inspection work done. Any deterioration and change in condition as well as all measures of third parties must be reported immediately to Merkel. Pawnages and other measures of third parties are to be fended off at the expense of the supplier; the supplier must reimburse any expenses of Merkel.

The supplier must label the goods such that they are durably recognizable as products of the supplier.

The supplier must constantly execute quality control which is appropriate in type and scope and is commensurate with the state of the art and demonstrate this upon request.

According to § 28 of the Federal Data Protection Act, Merkel has the right to store, process and transmit data for its own use on the movement and payment of goods involving the suppliers in order to carry out the contractual relationship.

II. Prices/Terms of Payment
The prices shown in the order are binding and are fixed prices, subject to other provisions. They are understood as being in € and are applicable in Germany in addition to the respective legal VAT in force. In the absence of a written agreement to another effect, the price includes delivery within Germany “carriage paid” including packaging; for foreign deliveries, “Delivered Duty Paid (DDP)” per INCOTERMS 2000 is regarded as agreed upon. If the prices have not been expressly agreed upon, then the most favorable price at which the supplier sells or offers goods of the same type and quality to a third party is regarded as agreed upon, but this will be at most the price at which the supplier last delivered such goods to Merkel.

Invoices are to be sent in duplicate to the receiver named in the order, indicating the order number and the date of the order. Invoices in which the aforementioned information is missing are regarded as not having been submitted. The payment period is not triggered in this case.

Payments by Merkel are always made with the proviso that the invoice is subject to verification, even if no reference has been made to this fact in an individual case. Provided that nothing else has been arranged, payments are made within 60 days after receipt of a proper, unobjectionable invoice net or within 30 days at a 2% discount, or within 14 days at a 3% discount. The payment period is met with timely instruction to a bank of the invoiced amount by Merkel. With respect to payments made that the supplier must reimburse, the supplier only has authorization for offsetting or a right of retention if supplier has an undisputed or legally binding claim against Merkel.

A transfer of the claims to payment to third parties is only permissible with the prior written consent of Merkel.

Payment has no impact on would-be claims and rights due to defects or rights to rebuke.
Merkel does not reimburse for the costs of project engineering or any of the costs associated with it, costs for travel, and expenses and other outlays.

III. Delivery/Transfer of Risk/Termination of Contract

The delivery/production dates and periods indicated in the order are binding. Provided that no other arrangements have been made, the delivery must occur “carriage paid” domestically and “Delivered Duty Paid (DDP)” abroad per INCOTERMS 2000 to the receiving site predetermined by Merkel. If Merkel, as an exception, has to bear the delivery costs, the goods are to be shipped in the most economical manner if no other instructions are given. Decisive for the meeting of the delivery/production dates is receipt of the goods at the receiving and utilization respectively site named by Merkel or the timeliness of the successful, complete acceptance by Merkel.

The supplier must immediately inform Merkel in writing in the event that an agreed-upon or indicated date and/or a delivery/production deadline cannot be met, and must indicate the foreseeable duration of the delay. The supplier must use all means and possibilities at its disposal in order to keep postponements of the delivery/production dates and deadlines as short as possible. All costs associated with this are borne by the supplier if the seller is responsible for the delays. This applies particularly to increased costs for expedited shipping methods.

The shipment of goods shall be announced in a timely manner, but 2 working days prior to delivery to the receiving site indicated in the order at the latest. Merkel’s order number must be indicated on all shipping notices, shipping papers and delivery slips, packaging, bills of freight and invoices, etc.; if omissions lead to delays, Merkel shall not be responsible for them.

The supplier must provide at its own expense for proper, environmentally friendly packaging and for shipping insurance at least in the amount of the value of the goods.

Merkel is authorized to send the used transport packaging back at the supplier’s expense. When reusable packaging is sent back, 2/3 of the value is to be credited. Merkel is authorized to reduce the invoiced amount by the credit to be expected.

In the event of delay in delivery, the supplier forfeits a contractual penalty in the amount of 1% of the value of the order per week of delay up to a maximum amount of 10% of the total value of the delivery. The paid contractual penalty is credited against to possible additional compensation claims due to delay. The proviso of the enforcement of the contractual penalty may also be declared after acceptance is completed up to the time of final payment. The right to further legal claims remains reserved. Particularly, after expiration of a reasonable period, Merkel is entitled to demand compensation instead of the service and/or to withdraw from the contract. The acceptance of late deliveries by Merkel constitutes no renunciation of these rights. If, also for other reasons, the late delivery is not proper, particularly if it is incomplete or defective, then Merkel is not obligated to grant another extension to delivery.

In the event of delivery earlier than agreed upon, Merkel reserves the right to perform a return shipment at the expense of the supplier.
The risk of the incidental ruin and the incidental deterioration of the goods is transferred to Merkel at the earliest upon delivery of the goods to the receiving site determined by Merkel or upon complete acceptance of the work performance by Merkel. In the event of early delivery, the risk of the incidental ruin and incidental deterioration of the goods is only transferred to Merkel at the time of the agreed-upon delivery date.

In the event of advance payment by Merkel, the proprietorship of the goods is already transferred to Merkel at the moment at which the supplier received the entire purchase price. The supplier must then separate the goods and designate them as the property of Merkel. However, the rules governing the bearing of risk remain unaffected by this.

Merkel may terminate at any time and with immediate effect successive delivery contracts such as installment delivery contracts and multiple delivery contracts in writing provided that substantial grounds for this are given. In particular, such substantial grounds are given if the supplier has committed a grave violation of contract which cannot be made up for or which represents a lasting violation of contract, or which can be made up for but has not been made up for within a reasonable time, or if bankruptcy proceedings have been initiated on the supplier’s assets or such proceedings are demonstrably impending, or if the supplier has been dissolved.

IV. Warranty/Liability
The supplier guarantees that its delivery/its work performance conforms to the acknowledged rules of technology and the legal safety and other regulations and is environmentally friendly, and that, in general, nationally and internationally recognized standards such as DIN, ISO, VDI, VDE, for example, are complied with. Moreover, the supplier guarantees that the delivery has no material or legal defect.
Merkel is unexpurgatedly entitled to the statutory claims and rights in the case of defects; Merkel has the right to first demand remedy of defects or replacement deliveries from the supplier. If the supplier does not meet its obligation to subsequent performance within a reasonable period or if the subsequent performance fails, Merkel is entitled to immediate enforcement of its rights to reduction, withdrawal, compensation instead of the service, or reimbursement of expenses. The subsequent performance is regarded as having failed if one attempt to remedy defects or to supply a replacement delivery does not lead to the faultless delivery on the part of the supplier. Merkel is entitled to remedy slight defects itself in fulfillment of its obligation to reduce damages without previous consultation, with the warranty obligation of the supplier not being affected by this. The supplier bears all expenses required for the purpose of remedying defects or replacing deliveries. In the case of withdrawal, the supplier must also reimburse Merkel’s contractual costs.

Moreover, the supplier is liable to the full extent, in accordance with the statutory provisions, for all damages including any consequential damages which arise as a result of a breach of duty or on other legal grounds. The supplier is liable to the full extent for the possible fault of its bodies and auxiliary persons. To the extent that the supplier is liable for compensation, the supplier shall indemnify Merkel from compensation claims of third parties in external relationships, especially but not definitively even in the case of damage to the object produced and sold by Merkel itself (so-called propagating defect). Provided that the supplier is responsible for product damages, the supplier shall indemnify Merkel from compensation claims of third parties on first demand to the extent that the cause has been placed in the supplier's sphere of control and organizational domain and the supplier is liable in the outside relationship itself. In the context of its liability for product damages, the supplier is also obligated to reimburse any expenses per §§ 683, 670 BGB or per §§ 830, 840, 426 BGB which arise from or in connection with a recall action performed by Merkel. Merkel shall inform the supplier about the content and scope of the recall measures to be performed – as far as possible and reasonable – and give the supplier the opportunity to give its opinion. Other statutory claims shall remain unaffected. The supplier must take out product liability insurance with a coverage amount of € 10 million per instance of bodily injury/property damage – lump sum; if Merkel is entitled to further-reaching compensation claims, then they remain unaffected.

The claim to fulfillment continues in existence until the written or legal assertion of compensation claims in stead of the service. In the event that Merkel withdraws from the contract due to the presence of a defect, the supplier must also reimburse the contractual costs to Merkel.

A notice of defect has been served in time provided that it is received by the supplier immediately in case of apparent defects or within a period of 10 working days after receipt of delivery (whichever event is later) or, if the defect was not visible during a proper inspection, immediately or within a period of 10 working days after discovery (whichever event is later).
The acknowledgement of over-deliveries as being covered by the contract must be expressly stated by Merkel. If, in the presence of a defect, the subsequent performance by the supplier fails, there is no obligation to investigate and object per § 377 HGB for the purpose of the subsequent performance of the services rendered by the supplier.

Claims due to defects become time-barred under the statutory provisions, though, at the earliest 2 months after Merkel has fulfilled any defect claims of customers due to the same defect in the goods. This suspension of the running of a period ends a maximum of 5 years after receipt of delivery of the goods by Merkel. The period of limitation starts anew for changed-out parts. If the supplier assesses the presence of a defect or remedy, then the period of limitation is suspended until the supplier informs Merkel of the result of the assessment, makes a declaration to Merkel that the defect has been remedied, or refuses to continue with the remedy of defect. In particular, an assessment is also constituted even if the supplier initiates the investigation or passes the delivery on to a third party for inspection. The period of limitations is also suspended as long as the goods cannot be used due to the defect or the test for defects.

If customers claim against Merkel the subsequent performance due to the defectiveness of a newly produced object delivered by the supplier, the supplier is obligated to inform Merkel immediately at the latest within a maximum of 3 working days, in writing whether the supplier is willing and able to render the subsequent performance in a timely manner. In the event of untimely notice, Merkel is entitled to bring about the subsequent performance incumbent on Merkel vis-à-vis the customer using its own or other means and to claim reimbursement from the supplier of the expenses required for this. The rights of recourse from §§ 478, 479 BGB shall remain unaffected. Both, Merkel's own costs and those imposed by the customers, are considered subsequent performance costs in terms of §§ 439 Para. 2, 478 Para. 2 BGB.

V. Property Rights/Documentary Evidence of Origin

The supplier guarantees that no rights of third parties are violated in connection with its delivery. However, if claims are asserted against Merkel due to the (alleged) violation of the rights of third parties, the supplier shall indemnify Merkel from these claims on first demand. This duty to indemnify also applies to all expenses which necessarily arise from or in connection with the claim assertion by a third party. The period of limitation is ten years from conclusion of contract.

Moreover, the supplier guarantees that the documentary evidence of origin and supplier declarations have been inspected by the customs authority or that such an inspection is possible. The supplier shall furnish the required information for this and produce required official confirmations (informational sheets, etc.). The supplier shall compensate Merkel for all damages which arise from the non-acknowledgement of the declared origin by the competent authority and indemnify Merkel from all claims of third parties arising from and in this connection on first demand.

VI. Place of Fulfillment/Venue/Applicable Law

Suhl is the place of fulfillment for deliveries and payments. Meiningen, Thüringen is the exclusive venue for all disputes in connection with the contractual relationship. However, Merkel also has the right to sue the supplier at its general venue.

The relationships between Merkel and the supplier are exclusively subject to the laws of the Federal Republic of Germany under the exclusion of the German Private International Law and the UN Conventions Relating to a Uniform Law on the International Sale of Goods.

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