Microsoft word - introduction_ s2012.doc

The new Orgalime S 2012 conditions: an overview of the major changes

1.
Revision of the Orgalime S 2000 Conditions

As the international sale of products represents the core business of companies in the mechanical
and electrical engineering industries in Europe, Orgalime has soon recognised that these com-
panies would benefit from a set of general conditions for the supply of products, which could be
used all over the world. The first version of the Orgalime-Supply Conditions has been already
published in 1992 (S 92 conditions) and these conditions have ever since been among Orgalime’s
most widely-used legal publications. They are used in a very large-scale with well over a million
hard copies sold since their publication and they are the biggest pull to our licensing website,
where hundreds of companies from all over the world have purchased a licence for the use of
Orgalime’s standardised conditions in electronic format.
The Orgalime Legal Affairs working group (consisting of lawyers representing the national member
associations of Orgalime) updates these conditions to take into account legal developments and
their experience in dealing with legal contracts in the engineering world. After a first review that
resulted in the S 2000 conditions, the working group has now adopted a new updated text, which
results in the S 2012 conditions.
The S 2000 conditions have been reviewed in detail. The Orgalime Legal Affairs working group
unanimously concluded that the Orgalime Supply-conditions have been widely accepted and
endorsed in international business and meet the parties’ needs. Thus, the review work is con-
sidered an update of the S 2000 conditions.
Some material changes have been applied, new texts have been inserted and existing texts have
been amended. Apart from these material changes, texts have been amended to clarify the
meaning. These changes have however not changed the well-balanced nature of the conditions.
Finally, definitions of the most important terms have been added in a separate Clause 2. These
definitions aim to increase legal certainty for the user of the S 2012 and to avoid
misunderstandings between the parties.
2.
Amendments
Below the material changes in the conditions are listed: Clause 10 (former Clause 9)

The Incoterms rule EXW (Ex Works) has been replaced by the rule FCA (Free Carrier).
Accordingly, the Supplier is responsible to clear the Contract Products for export. The Supplier is
normally in a better practical position to perform this task, being based in the country of export. He
has to bear the costs of customs formalities, duties, taxes and other fees resulting from the export
procedures.
In contrast to the S 2000-conditions partial delivery is basically not permitted.
The European Engineering Industries Association ORGALIME aisbl | Diamant Building | Boulevard A Reyers 80 | B1030 | Brussels | Belgium
Tel: +32 2 706 82 35 | Fax: +32 2 706 82 50 | e-mail: secretariat@orgalime.org Ass. Intern. A.R. 12.7.74 | VAT BE 414341438
Clause 11 (former Clause 10)

It is now stated in general terms that a period of time within which the Supplier has to deliver the
Contract Products only starts to run as soon as the Purchaser has fulfilled any preconditions upon
which the parties have agreed. Theses preconditions have to be specified in the Contract. The
former clause was restricted to a limitative enumeration of preconditions.
Clause 13 (former Clause 12)

In the revised version any circumstance which is attributable to the Purchaser entitles the Supplier
to extend the time for delivery. In the former text this extension could only occur if the delay
resulted from Force Majeure or from an act or omission of the Purchaser. The new text broadens
the scope for such extension.
Clause 14 (former Clause 13)

In the S 2012-conditions liquidated damages are calculated on each commenced (S 2000:
completed) week.
Clause 21 (former Clause 20)

If the purchaser fails to pay, the S 2012-conditions explicitly provide for a right of the Supplier to
claim recovery costs. Recovery costs shall be 1% of the amount due. The S 2000-conditions did
not mention recovery costs, which could be a reason for disputes.
Clause 36 (former Clause 32)

If the Supplier does not remedy a defect, the final period to be set by the Purchaser shall not be
less than one week. This precise minimal time period was not mentioned in the S 2012-conditions.
Clause 37 (former Clause 33)

If the Product has not been successfully repaired by the Supplier, the Purchaser’s right to
terminate the contract and to be compensated up to a maximum of 15 per cent has been limited to
that part of the contract which can as a consequence of the defect not be used as intended. This
amendment takes account of situations where the defect does not affect the use of other
substantial parts of the delivery.
Clause 38 (former Clause 36)

The liability period for replaced or repaired parts ends in any case one year from the end of the
normal liability period (in S2000: two years from the beginning of the normal liability period).
Clause 41 (former Clause 39)

Currency and export restrictions, epidemics, natural disasters, extreme natural events and terrorist
acts have been added as examples of Force Majeure-events.

Source: http://www.nrf.eu/uploads/files/orgalime_2012_uk.pdf