Tailorlux GmbH General Terms and Conditions of Business (Status January 9th 2012)

§ 1 General, scope

(1) The present General Terms and Conditions of Business (TCB) apply to all our business relations with our customers (hereinafter: “purchaser”).

(2) The TCB apply in particular to contracts for the sale and/or supply of moveable items (hereinafter: “goods”), without regard to the fact that we manufacture the goods ourselves or buy them in from suppliers (§§ 433, 651 German Civil Code). The TCB are also applicable in their current version as a framework agreement for future contracts for the sale and/or supply of moveable items with the same purchaser, without the need for us to refer specifically to them again; in this case we will inform the purchaser without delay of amendments to our TCB.

(3) Our TCB shall apply exclusively. Any divergent, contradictory or supplementary TCB of the purchaser shall become part of the contract, only when and insofar as we have agreed to their validity. This requirement for consent shall apply in all cases, for instance also when we, being aware of the purchaser’s TCB, perform delivery to him without reservation.

(4) Individual agreements made with the purchaser in a given case (including subsidiary agreements, additions and amendments) have precedence over these TCB in every case. A written contract or our acknowledgement in writing is necessary for the content of such agreements to be binding.

(5) Statements and notifications relevant in law, which are to be submitted to us by the purchaser after the contract has been concluded (e.g. setting deadlines, notification of defects, statement of cancellation or reduction), shall be valid only if in written form.

(6) Notes on the applicability of legal provisions are purely advisory and have no force in law. The legal provisions are applicable without reference to any advisory material whatsoever, insofar as they are not directly amended or expressly excluded.


§ 2 Conclusion of the contract

(1) Our offers are made subject to confirmation and without obligation. This applies also, when we have delivered to the customer catalogues, technical documentation (e.g. drawings, plans, computations, calculations, references to DIN norms), other product specifications or data – including in electronic form, in which we reserve property and copyrights.

(2) An order for goods by the purchaser constitutes a binding offer to enter into a contract. Insofar as nothing further ensues from the order, we shall be entitled to accept this offer to enter into a contract within four weeks of receipt by us of the offer.

(3) Acceptance can either be in writing (e.g. by confirmation of the order) or by delivery of the goods to the purchaser.


§ 3 Deadline for delivery and delay in delivery

(1) The deadline for delivery shall be individually agreed or specified by us on acceptance of the order. Insofar as this is not the case, the delivery period shall be approximately eight weeks from conclusion of the contract. The delivery deadlines specified in the offer are without obligation, unless they have been expressly specified as binding.

(2) Insofar as we are unable to comply with binding delivery deadlines for reasons, for which we are not obliged to take responsibility (non-availability of the service), we will inform the purchaser of this fact without delay and at the same time will set a new deadline for delivery. In the event that the new deadline for delivery is also not available, we shall be entitled to withdraw from the contract as a whole or in part; we will reimburse without delay any consideration already rendered by the purchaser. The unpunctual delivery to us by our suppliers shall be deemed in particular a case of the non-availability of the service within this meaning, where we have concluded a congruent hedging transaction neither we nor our supplier shall be held responsible or we are not obliged to supply in any given case.

(3) The occurrence of delay in delivery by us is determined according to legal provisions. However, in every case the purchaser is required to submit a reminder. In the event that we incur a delay in delivery, the purchaser is entitled to demand flat rate compensation for the damages caused by the delay. The flat rate damages shall amount to 0.5 % of the net price (value of goods to be delivered), for every complete calendar week of delay, to a maximum total however of 5 % of the value of goods to be delivered of the goods delivered late. We reserve proof, that the purchaser has suffered no damage or a significantly lesser damage than the aforementioned lump sum.

(4) The purchaser’s rights pursuant to § 8 of these TCB and our legal rights in particular in the event of an exclusion of the obligation to perform (e.g. on the grounds that the performance and/or supplementary performance is impossible or unreasonable) shall remain unaffected.


§ 4 Delivery, passing of risk, acceptance, default of acceptance

(1) Delivery is effected ex works, which is also the place of performance. The goods may be conveyed to another place of destination at the request and cost of the purchaser (sale by despatch). Insofar as nothing has been agreed to the contrary, we shall be entitled ourselves to determine the type of delivery (in particular forwarding agent, despatch route, packaging).

(2) The risk of accidental destruction and accidental deterioration of the goods passes to the purchaser at the latest when the goods are surrendered to him. In sale by despatch however the risk of accidental destruction and accidental deterioration of the goods as well as the risk of delay shall however pass with the delivery of the goods to the carrier, the freight forwarder or the other person or institution determined to carry out the shipment already. If acceptance has been agreed, this acceptance is binding for the passing of risk. In all other cases the provisions of the (German) labour and transportation contracts law are applicable. Transfer or acceptance is equivalent, if the purchaser is in default of acceptance.

(3) If the purchaser defaults in his contractual duty to accept the goods, he fails to fulfil his duty of cooperation or if our delivery is delayed by other grounds which can be imputed to the purchaser, we shall be entitled to demand a replacement of the damage arising from the delay inclusive of additional expenditures (e.g. storage costs). For this purpose we calculate a flat rate compensation in the amount of 0.5 % of the net price (value of goods to be delivered) per calendar week up to a total of a maximum of 5 % of the value of goods to be delivered in the case of definitive default of acceptance, starting from the date of delivery or – in the absence of a delivery deadline – from the date on which the goods are ready for despatch. Evidence of a higher degree of damage and our legal claims (in particular reimbursement of additional expenditures, commensurate compensation, notice of termination) shall remain unaffected; the fixed rate, however, is to be calculated on continuing financial claims. The purchaser shall be permitted to provide evidence that no damage whatsoever or damage to a significantly lesser extent has been occasioned to us.


§ 5 Force majeure, hindrances to the contract

(1) Force majeure of any nature, unforeseeable defaults in operation, transportation or despatch, damage by fire, flood, unforeseeable labour, energy, raw material and supply shortages, strikes, lockouts, official decrees or any other hindrances beyond the control of the party liable to perform the service which reduce, delay or render unreasonable the manufacture, despatch, acceptance or use of the goods, release that party for the duration and scope of the hindrance of his obligation to deliver or accept the goods.

(2) If the hindrance to the delivery and/or acceptance of the goods exceeds more than eight weeks, both parties are entitled to withdraw from the contract.

(3) In the event of the discontinuation in whole or in part of the vendor’s sources of supply, the vendor is not bound to seek new suppliers. In this event the vendor is entitled to distribute the goods at his disposal taking into account his own requirements.


§ 6 Prices and payment conditions

(1) Insofar as nothing has been agreed to the contrary in any given case, our current prices in Euros in force on the date of conclusion of the contract, including ex works costs and where applicable, value added taxes required by law will apply. In the event that the purchaser requires invoices to be made out in a currency other than the Euro, we shall pass on the relevant changes in the exchange rate directly to the purchaser based on the daily ECB reference rates between sales and invoice dates, so that the foreign exchange risk shall be borne by the purchaser up until the date of invoice.

(2) In the case of a sale by despatch (§ 4 sub-section 1) the ex works transport costs and the costs of any transit insurance required by the purchaser shall be borne by the purchaser. Any Customs duties, fees, taxes and other official disbursements shall be paid by the purchaser. In accordance with the packaging regulations we shall not accept the return of any transport and packaging materials, which will become the property of the purchaser; with the exception of pallets.

(3) The purchase price is due and must be paid within 10 working days from invoicing and delivery or acceptance of the goods. As a matter of principle, however, we shall be entitled to demand a deposit in the amount of 50 % of the purchase price. The deposit is due and must be paid within 10 working days from invoicing. Deposits and advance payment plus the value added tax required by law are to be paid.

(4) Upon the expiry of the aforementioned term of payment the purchaser will be in default. During any period of arrears of payment default interest at the rate currently in force will be added to the purchase price. We reserve the right to assert further claims for damages for default of payment. Our claim against traders for the commercial regular interest payable on due date (§ 353 German Commercial Code) remains unaffected.

(5) Rights of set-off or retention are available to the purchaser only insofar as his claim is founded in law or is undisputed. In the event of defects in delivery the purchaser’s rights of reciprocity in particular pursuant to § 8 sub-section 6 para. 2 of these TCB remain unaffected.

(6) If it becomes apparent after the contract has been concluded that our claim for the purchase price is prejudiced by the inability of the purchaser to pay (e.g.; through a petition for the opening of insolvency proceedings), we shall be entitled under the legal provisions concerning refusal of performance and – if appropriate after setting a deadline – to withdraw from the contract (§ 321 German Civil Code). In the case of contracts for the manufacture of untenable items (custom-made items), we shall be entitled immediately to cancel the contract; the legal provisions concerning the expendability of the deadline remain unaffected.


§ 7 Reservation of proprietary rights

(1) Until payment of all our present and future claims arising from the contract of sale has been completed in full and arising from a current business relationship (secured claims), we reserve all proprietary rights over the goods sold.

(2) Until payment of the secured claims is completed in full, it is prohibited either to pledge or to assign to third parties goods subject to our reservation of proprietary rights. The purchaser must inform us in writing, whenever and to what extent third parties effect access to goods which are our property.

(3) In the event of conduct contrary to the contract by the purchaser, in particular failure to pay the due purchase price, we are entitled, in accordance with law to withdraw from or/and to reclaim the goods on the grounds of our reservation of property rights. Reclamation of the goods does not include at the same time a declaration of cancellation of the contract; on the contrary, we are entitled to reclaim the goods and to reserve the right to cancel. If the purchaser fails to pay the due purchase price, we may enforce these rights only if we have previously and without success set the purchaser a commensurate deadline for payment or if setting such a deadline is superfluous according to the legal provisions.

(4) The purchaser is authorised to sell and/or to process goods subject to our reservation of proprietary rights in the ordinary course of business. In this case the following additional provisions apply.

a) The reservation of proprietary rights extends to the processing, mixing or combination of our goods at their full value, whereby we are deemed the manufacturer. If there remains a processing, mixing or combination with the goods of third parties, who have existing proprietary rights, we acquire joint ownership with regard to the invoice value of the processed, mixed or combined goods. In all other cases, the same applies to the product arising as to the goods delivered under reserve of proprietary rights.

b) The purchaser hereby assigns to us as a surety all claims against third parties arising from the further sale of the goods or the product, as the case may be, in the amount of any proportion of joint ownership pursuant to the preceding paragraph. We shall accept the assignment. The obligations of the purchaser described in sub-section 2 also apply without distinction of the claims assigned.

c) We and the purchaser shall remain authorised to collect any claims. We undertake not to collect the claim, while the purchaser continues to comply with his payment obligations towards us, does not fall into arrears of payment, is not subject to any petition for the opening of insolvency proceedings against him and refrains from other types of default in payment. However, if this is not the case, we shall be entitled to demand that the purchaser of the assigned claims and their respective debtors furnish all information required for collection, hand over the relevant documents, and inform the debtors (third parties) of the assignment.

d) If the realisable value of the securities on our claims exceeds 10 %, we will release securities of our choice on the request of the purchaser.


§ 8 Claims for defects by the purchaser

(1) The legal provisions for the rights of the purchaser in defects of goods or title (including wrong delivery and shortfall in delivery, as well as inappropriate assembly or defective assembly instructions) apply, insofar as nothing has been agreed to the contrary. The special legal provisions concerning ultimate delivery of the goods to a consumer (supplier’s redress pursuant to §§ 478, 479 German Civil Code) shall remain unaffected in all cases.

(2) Our liability for defects is based principally on the agreement concluded concerning the specification of the goods. All product specifications, which are the subject-matter of the individual contract, are deemed to be agreement as to the specification of the goods; it is immaterial in this context whether the product specification originates from the purchaser, from the manufacturer or from us. Our guidance, oral, written and as the result of trials, as to the use and installation of the goods supplied is provided to the best of our knowledge and belief, but is solely provided as information and is without commitment, including any legislation concerning the rights of third parties and does not release the purchaser from making his own inspection of the products delivered by us as to their suitability for the intended processes and purposes. Application, use and processing of the products take place beyond our control and are therefore the exclusive responsibility of the purchaser.

(3) In the absence of any agreed specification of the goods, the existence of defects therein shall be determined in accordance with statutory provisions (§ 434 sub-section 1 Items 2 and 3 German Civil Code). However, we accept no liability whatsoever for public statements made by the manufacturer or any other third party (e.g. advertising statements).

(4) Claims for defects by the purchaser presuppose that he has complied with his legal obligations to inspect the goods and to give notice of defects (§§ 377, 381 German Civil Code). If a defect becomes apparent on inspection or subsequently, we must be informed of this in writing without delay. Notice of a defect is deemed to be without delay, when it takes place within two weeks, whereby prompt despatch of the notice is sufficient to meet the deadline. Independently of these obligations to inspect the goods and to give notice of defects, the purchaser must give written notice of obvious defects (including wrong delivery and shortfall in delivery) within two weeks of delivery, whereby also prompt despatch of the notice is sufficient to meet the deadline. If the purchaser neglects to carry out the customary inspection and/or fails to give notice of defects, our liability for the undisclosed defect is excluded.

(5) If the item delivered is defective, we are entitled in the first instance to choose whether we supply a remedy by correcting the defect (subsequent improvement) or by delivering an item free from defects (replacement). Our right to refuse to remedy the defect shall remain unaffected.

(5) We are entitled to insist that the remedy owed is dependent on the full payment by the purchaser of the purchase price due. The purchaser is entitled, however, to withhold a portion, commensurate with the defect, of the purchase price.

(6) The purchaser must give us the required time and opportunity to remedy the defect, in particular to surrender the goods concerned for the purposes of being tested. In the case of replacement of the goods the purchaser must return to us the defective item in accordance with the legal provisions. The remedy involves neither the removal of the defective item nor its re-installation, unless we were under the original duty to install it.

(8) The expenses required for the testing and remedying of the defect, in particular the costs of transport, travel, labour and materials (excluding removal and installation costs) will be borne by us, in the event that a defect actually exists. If however it becomes apparent that the purchaser’s demand for the remedying of a defect is unjustified, we are entitled to demand to be compensated by the purchaser for the costs which have been occasioned.

(9) In urgent cases, e.g. where operational safety is endangered or to prevent disproportionate damage, the purchaser shall have the right to correct the defect himself and to claim from us the expenses which were objectively required for the purpose. We shall be obliged to give notice without delay of such self-help as far as possible in advance. There is no entitlement to self-help, when we are entitled to refuse to carry out a similar remedy in accordance with the legal provisions.

(10) When the remedy has been abortive or a deadline set by the purchaser for a remedy to be provided has expired without results or is superfluous according to the legal provisions, the purchase is entitled to withdraw from the contract or to reduce the purchase price. However, in the case of a minor defect there exists no right of withdrawal from the contract.

(11) Claims by the purchaser for damages or reimbursement of unnecessary expenses exist only in accordance with § 9 and are excluded in all other cases.


§ 9 Other liability

(1) Insofar as nothing to the contrary arises from these TCB including the following provisions, we accept liability in the case of an infringement of contractual and non-contractual obligations according to the relevant legal provisions

(2) We accept liability for damages – arising from any legal ground whatsoever – where there has been deliberate intent or gross negligence. In cases of ordinary negligence we accept liability only

a) for damages arising from injury to life, limb or health.

b) for damages arising from a material contractual obligation (an obligation, the fulfilment of which facilitates in the first place the proper performance of the contract and the observance of which the party to the contract relies on, and may rely on, regularly); In this case, however, our liability is limited to the compensation for foreseeable, typically occurring damages.

(3) The limitations on liability arising from sub-section 2 do not apply, unless we have fraudulently concealed a defect or assumed a guarantee for the specification of the goods. The same applies to claims by the purchaser under the product liability legislation.

(4) The purchaser is entitled to withdraw from or terminate the contract on the grounds of a breach of duty other than a defect only if we are responsible for the breach of duty. A free right of termination of the purchaser (in particular according to §§ 651, 649 German Civil Code) is excluded. In all other cases the statutory requirements and legal consequences shall apply.


§ 10 Limitation

(1) Notwithstanding § 438 sub-section 1 No. 3 German Civil Code the general statute of limitations for claims from defects of quality and title is one year from delivery Insofar as an acceptance has been agreed, the statute of limitations shall begin with the acceptance

(2) Statutory special regulations for in rem claims to return of third parties (§ 438 sub-section 1 No. 1 German Civil Code), wilful deceit of the vendor (§ 438 sub-section 3 German Civil Code) and for claims of recourse against the supplier in final supply to a consumer (§ 479 German Civil Code) also remain unaffected.

(3) The aforementioned limitation periods of commercial law also apply to the purchaser’s contractual and extra-contractual claims for damages based on a defect in the goods, unless the application of the regular statutory limitation period (§§ 195, 199 German Civil Code) would result in a shorter limitation. The limitation periods for the product liability legislation shall remain unaffected in all cases. Apart from that the statutory limitation periods according to section 8 apply exclusively for damage claims of the buyer.


§ 11 Trademarks

(1) The purchaser may not offer or deliver replacement products in lieu of our products nor associate our product names – whether or not protected – in price lists or similar business documents with the word “replacement” or compare them to names of replacement products

(2) It is further not permitted when using our products for manufacturing purposes or further processing, to use our product designations, in particular our trademarks, on such goods or their packaging or in printed format and advertising material without our prior consent – in particular as a specification of a part.

(3) The supply of branded products under a certain trademark shall not be deemed as consent to the usage of such trademark for the products processed.


§ 12 Governing law and place of jurisdiction; effectiveness clause

(1) These TCB and all legal relationships between us and the purchaser are governed by the law of the Federal Republic of Germany under the exclusion of uniform international law, in particular the UN Convention on the International Sale of Goods. The pre-requisites and effects of the reservation of title according to § 7 are subject to the law of the respective storage location of the item insofar as the choice of law in favour of German law is inadmissible or invalid.

(2) If the purchaser is a merchant within the meaning of the German Commercial Code, a legal person governed by public law or a special fund under public law, the sole – including international- place of jurisdiction for all disputes arising directly or indirectly from the contractual relationship is our registered office in Münster. We are however also entitled to institute proceedings at the general place of jurisdiction of the purchaser.

(3) Should individual clauses of these TCB be or become invalid in whole or in part, the effectiveness of the remaining clauses or the remaining parts of such clauses shall not be affected. The parties to the contract must replace an invalid provision by a valid provision which comes closest to the commercial purpose of the invalid provision.