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General Sales Terms and Conditions

FEDERAL-MOGUL General Sales Terms and Conditions EMEA, India, Korea 09 / 2013


1.1 These general terms and conditions for sales and deliveries (”FM Sales T&C”) shall govern all sale of goods or work- and service performances by the acting Federal Mogul company (”FM”) including future transactions and the phase of initiation of a transaction, contract negotiations, quotations submitted by FM to Customer or answers of FM to inquiries. FM Sales T&C apply exclusively. General terms and conditions of Customer conflicting with, being contradictory to or deviating from FM Sales T&C are not acknowledged by FM, unless expressly accepted in writing. This also applies where reference to Customer’s terms and conditions has been or was made or where FM did not object to them or, if FM – being aware of conflicting or deviating conditions of Customer – delivers without reservation. FM Sales T&C only apply vis-à-vis entrepreneurs, if the legal relationship belongs to the operation of the entrepreneur, and vis-à-vis enterprises.

1.2 ”Customer” as used in these FM Sales T&C is each buyer of FM products, work- or service performances (jointly “Products”) based upon contractual agreement. FM and Customer are jointly the ”Parties” and each individually a ”Party”. Technical terms are primarily defined according to the definition of the respectively valid Technical Standards as DIN/ISO 8402

1.3 FM is entitled to process for its own purposes also the personal data originating from the business relationship. Customer is herewith informed of and agrees to this for purposes of applicable data protection laws.


2.1 Quotations or offers provided by FM are without engagement until FM’s final purchase order confirmation.

2.2 In case the quotation of Customer is a binding purchase order, FM is entitled to accept this purchase order within two weeks from receipt by sending a purchase order confirmation or by delivering the ordered Products.

2.3 Each purchase order is only valid for the market for which the Products are destined according to express agreement. FM has to be informed about the target market by Customer in advance. In the event Customer may not deliver into a target country, e.g. because of an embargo, he – upon FM’s request – has to return to FM the Products delivered. Any non-compliance herewith obligates Customer to compensate the damage incurred by FM.

2.4 In the event the purchase order is based on or reference is made to product- and/or material specifications used by FM, the respective work specifications applicable for these Products and materials at FM shall be agreed (”FM Specifications”). Upon request of Customer information about such specifications is provided. If Customer approves Products deviating from the particulars set out in the purchase order, these are deemed to be owed. Further information, e.g. in brochures, pamphlets, catalogues, etc., are not part of the contract unless expressly agreed upon in writing. These brochures, pamphlets, catalogues etc. do not contain any legally binding declarations and particularly do not constitute assured qualities, independent assurances (guarantees) otherwise or definite action directives. This also applies in case of standard- or conformity designations being used.

2.5 Solely the Customer decides in his own responsibility on the fitness of the Products to be delivered by FM for the purpose chosen by him or fitness of putting the Products into operation. A purpose of use of FM’s Products determined by Customer only becomes part of the contract if expressly agreed in writing. This also applies to the extent FM was involved by Customer in the development of the Products created by Customer and may thereby have cooperated by giving advice and recommendations. Vis-à-vis FM the Customer is barred from bringing the objection that Products delivered by FM had not been or had not sufficiently been tested. In case of resale nobody shall be permitted to make further statements and specifications or undertakings without FM’s prior written consent. Article 2.4 shall apply accordingly.

2.6 Customer decides in his own responsibility on readiness for use of our Products. Customer vis-à-vis FM not raise the objection that Products not sufficiently tested were supplied.

2.7 Customer assures traceability of Products delivered by FM. Customer shall not exercise a right to refuse performance in this regard. At any time FM may request evidence on the keeping of proper documentation.

2.8 Customer has to inform FM in advance, if Products to be delivered by FM are to be used as a safety related part or a part requiring special documentation. He is liable to FM for all damages incurred due to the non-fulfilment of this obligation. The Products may not be used in aviation or in nuclear plants without prior written consent by FM.

2.9 Any illustrations, drawings, calculations and other documents, models or patterns related to the Products made available to Customer remain the sole property of FM. FM reserves all copyrights as well as all ownership rights therein. Any handing over of such documentation to third parties by Customer requires the prior express written consent of FM. Any transfer of rights whatsoever is subject to a written agreement, including a fair compensation to be paid for it, signed by both parties’ representatives, for FM this will be the SVP Sales of affected Product Group only. The foregoing shall apply accordingly to any documents submitted by third parties to FM whereby FM is authorized to submit those documents to Customer provided FM has permissibly subcontracted such third parties in delivery of services or goods for the fulfilment of its contractual obligations towards Customer.


3.1 Only prices confirmed by FM are binding. In the event deliveries and partial deliveries are – as per agreement – carried out later than two months as of date of the purchase order confirmation and in case that FM has meanwhile increased its sales price in general, FM is entitled to increase the agreed price accordingly. FM is entitled to increase prices as well in case the price for materials to be used for the manufacturing and supply of parts to customer has increased in general in the market as well, after FM has demonstrated to customer the relevant and reasonable information about the price development.

3.2 Unless otherwise stated in the purchase order confirmation, FM’s prices are understood net as ex works (EXW INCOTERMS 2010) FM’s factory. Products will be provided in standard packaging only. Any special packaging required by Customer for transport is not included in the price. As ex works, the price does also not include freight, transfer, insurance, customs, assembly and the applicable value added tax. The value added tax applicable on the date of invoicing will be shown in its legal amount separately on the invoice.

3.3 Unless otherwise agreed, FM’s claims are due net within 30 days as of date of invoice. No discounts are granted unless so agreed in writing. FM may request payment in advance or collateralization prior to delivery. In the event of default of Customer FM is entitled to a default interest of at least 8% per annum over and above the applicable basic interest rate applicable by law or in absence of such rule set by the central bank in the jurisdiction of FM. FM reserves the right to assert further damages.

3.4 Payments are only to be made in the currency determined in the invoice. Bills of exchange and cheques will only be accepted subject to conclusion of separate agreement and only on account of payment. Any cost of discounting and charges for collection are to be borne by Customer.

3.5 Customer may only set off counterclaims which either have been expressly acknowledged by FM or are adjudicated by a nonappealable judicial decision. Customer is only entitled to exercise a right of retention insofar as his counterclaim is based on the same legal relationship for affected supply. Customer is not entitled to a right of partial retention in cases of partial performance. Claims of Customer against FM may only be assigned or pledged with the express written consent of FM.

3.6 Customer’s obligations resulting from another contract entered into with FM continue to be in full force and effect also when a good delivered by Customer thereunder to FM becomes part of the Product to be delivered by FM hereunder and when such Products delivered by FM hereunder are not marketable for reasons which are not within FM’s responsibility.


4.1 Timely delivery is subject to all documents, necessary authorizations and releases, especially of drawings by Customer being provided to FM in due time as well as the abidance by the payment conditions and other obligations of Customer. If these obligations are not complied with, delivery times are prolonged appropriately except in cases, where FM is responsible for the delay.

4.2 Unless otherwise agreed and except for cases where a specific acceptance or assembly obligation has expressly been agreed upon in writing, the delivery time is deemed to be met if readiness of the Products for collection by Customer or his freight carrier at FM’s factory has been announced by the expiration of the time period agreed for delivery.

4.3 In case delivery is delayed for reasons only FM is responsible for the Customer is, unless actual damages are proven to be lower, entitled to a lumpsum compensation for each completed week of such delay of 0.5 % (in words: point five per cent), but not more than a total of 5 % (in words: five per cent) of the price of the delayed Products provided that Customer shows probable cause that he incurred damages solely due to such delay.

Further compensation claims of Customer for delay of performance are excluded. The foregoing limitation does not apply in cases of damage to health, bodily injury or bodily injury followed by death as well as in cases of intentional or grossly negligent violation of cardinal contractual obligations by FM or its representatives and agents.

4.4 Upon request of FM, the Customer is obliged to declare within an appropriate time frame, whether he still desires delivery of the Products despite the delay.

4.5 In the event that the collection of the Products by the Customer or his freight carrier is delayed upon request of the Customer for more than 2 (two) weeks after (i) the agreed delivery time or, (ii) in case a fixed delivery time has not been agreed, after having given notice of readiness, FM is allowed to invoice a storage charge amount-ing to 0.5 % (point five per cent) of the Product price per month, however not more than a total of 5 % (five per cent) unless Customer proves lower damages on part of FM. The right of FM to claim proven damages in excess remains unaffected. After expiration of an appropriate time limit set by FM and due notification to Customer, FM is entitled to dispose of the Products otherwise and eventually deliver Products to Customer within an adequately prolonged time limit.

4.6 At any time FM is entitled to have its delivery obligations fulfilled by an affiliated company or to have the Products manufactured by an affiliated company. Affiliated company shall mean all legal entities, companies with limited liability, corporations and partnerships including limited partnerships which are directly or indirectly (i) controlled by FM, (ii) controlling FM or (iii) being under common control by a company which directly or indirectly controls FM. Control shall mean holding the majority of the shares or voting rights or otherwise being able to direct the affairs of such company.

4.7 With respect to a contract for work and services, acceptance has to be carried out by Customer at the premises of FM at Customer’s cost. In case the Customer does not attend an acceptance appointment set by FM and notified in writing to Customer with 1 (one) weeks’ notice, acceptance will be considered to have taken place by the minutes of acceptance being signed by FM.

4.8 Delivery of the Products in accordance with logistic systems, e.g. just-in-time, requires a written agreement.


5.1 Unless otherwise stipulated in the purchase order confirmation, the delivery term ex works (EXW INCOTERMS 2010) at FM’s factory is agreed.

5.2 Partial deliveries are permissible to a reasonable extent.

5.3 The risk of loss, including accidental loss, passes with the dispatch of the Products, meaning the handing over of the Products to the Customer or his designated freight carrier, at FM’s factory. In case an express acceptance by Customer has been agreed, this is the relevant point in time for the passing of the risk. In case dispatch or acceptance, if so agreed, is delayed for reasons the Customer is responsible for, the risk of loss passes to the Customer on the date which has been notified to Cus-tomer for dispatch but in no case prior to the originally agreed delivery date.

5.4 Unless otherwise expressly agreed, the passing of the risk of loss is not affected even where FM should upon request and/or on the account of Customer arrange for insurance of the Products.


6.1 In case of an event of force majeure or other unforeseen, extraordinary circumstances not due to either Party’s fault (interruption of business, strike, lockout, interventions by authorities, difficulties in power supply, delayed supply of or supply of defective raw material, semi-finished or finished preliminary products necessary for the production of the Products, etc.) both Parties are released from rendering their obligations under the contract to the extent and for the duration of the impediment plus an appropriate start-up time thereafter. This also applies if such impediments occur at subsuppliers. Either Party will inform the other Party without undue delay on the commencement and end of such impediments.

6.2 In case delivery or performance becomes impossible or unreasonable for FM due to such impediments, FM is released from the delivery obligation. To the extent FM is released from the delivery obligation advance payments will be returned to Customer. Customer shall not be entitled to damages in case the delivery is delayed or in case FM is released from its obligations due to force majeure.

6.3 In the event the impediment lasts longer than six months either Party may withdraw from the contract.


7.1 FM reserves all rights of ownership in the Products delivered until the purchase price for the Products has been duly paid. FM further reserves all rights of ownership in the Products until all payments outstanding in the business relationship with Customer have been duly settled. For as long as the title to the Products lies with FM, the Customer is not allowed to pledge, to assign or to transfer the Products as a collateral to a third party.

7.2 In case of a violation of the contract by the Customer, especially in case of delayed payment, FM is, after having granted an adequate time period for cure, entitled to take back and to utilize the Products. In case of successful utilization, the revenues less disbursements will be deducted from the debts of Customer. Retrieval of the Products by FM shall, however, not be construed as withdrawal from or rescission of the contract by FM.

7.3 For as long as the title to the Products lies with FM, Customer is obligated to handle the Products properly and to store them with appropriate care. Customer must clearly mark the Products as being the property of FM. Customer is further obligated to obtain at his own cost proper insurance for the Products at replacement value against damage by fire and water as well as against theft. Claims against the insurer are herewith assigned to FM. FM accepts such assignment. Customer directs insurer to perform payment only directly to FM. Necessary maintenance and inspection work must be carried out by Customer in due time at his own cost.

7.4 In the event of seizures of or other interferences with the Products by third parties Customer has to inform FM in writing without undue delay, so that FM may take appropriate action to protect its property. Customer has to take all measures necessary for annulment and defence of such interventions and claims and to support FM in securing its rights in every manner, also in the name of FM. Customer must reimburse to FM any in court and out of court expenses which FM cannot recover in any such proceeding.

7.5 Customer is entitled to process the Products within the ordinary course of business and/or to resell them also during the time for which the title to the Products still lies with FM, provided, however, Customer receives complete payment from his business partners at the time of transfer of ownership or sells and transfers the Products to his business partners also only under retention of title. Independent of whether the Products are sold onward by Customer after further processing or not, Customer assigns to FM already now the receivables accruing in such onward sales against his business partners up to the amount invoiced by FM (including value added tax).

If the Customer has established a current account agreement with his business partners, the assignment shall extent to the acknowledged balance or in case of insolvency of such business partner to the actual balance. Customer remains authorized to collect these receivables even after assignment. The right of FM to collect these receivables remains unaffected. FM shall not collect these receivables as long as the Customer duly fulfils his payment obligations vis-à-vis FM and has not filed for the opening of bankruptcy proceedings or suspended its payments altogether. Should the Customer fail to fulfil his obligations as described before FM can request from Customer that all assigned claims and debtors are named along with all details necessary for collection, the relevant documents are handed over and that his business partners are informed about the assignment. Customer herewith assigns also all claims under bills of exchange that are given by Customer’s business partners for a sale of the property of FM to them. FM may also claim at any time from Customer that the bills of exchange are handed over and endorsed. FM is at any time entitled to notify third parties of the above mentioned assignment. All assignments are herewith accepted by FM.

7.6 For as long as title to the Products lies with FM, the Products are always processed, assembled or transformed by Customer on behalf of FM so that ownership of the final good lies with FM but without any rights arising for Customer out of such transfer of ownership. In the event the Products are processed with other goods not owned by FM, FM acquires co-ownership in the final good in the proportion of the value of the Products (final invoice amount including value added tax and any other charges) to the other processed goods at the time of processing. For the final good created by the processing the same provisions apply as for Products delivered under reservation of title.

7.7 FM has a right of retention with respect to as well as a contractual pledge on all movable properties that are passed into its possession for the purpose of processing, repairs or other works in order to secure all claims arising under this contract.

7.8 Upon request of Customer, FM shall release the securities granted to it in accordance with applicable law in case of overcollateralization. The choice of securities to be released is at the discretion of FM.


8.1 In the event the purchase order is based on product- and/or material specifications or reference is made to them, the FM Specifications are binding. Upon request FM will provide to Customer information on the FM Specifications. The particulars fixed in the FM Specifications determine exclusively the performance obligation as to the Products. In case Customer approves Products differing from the purchase order stipulations, these are deemed to be owed. It is Customer’s sole responsibility to provide to FM accurate and complete purchase order stipulations and the documents related thereto.

The FM Specifications or references to norms labelling or conformity labelling do not constitute a guarantee granted by FM. Guarantees will only be granted in express written declarations. Moreover; drawings and technical stipulations or documentation, do not give rise to any guarantee or constitute any assured qualities or can otherwise be a basis for claims against FM unless expressly agreed in writing in advance. Furthermore, documents, drawings etc, received from the Customer do have only relevance to FM if they are expressly agreed with FM in advance.

8.2 Customer undertakes to inspect the delivered Products without undue delay and to give to FM notice of a defect in writing by explaining its nature and extent. Apparent defects must be notified within 10 days after delivery, and defects which are despite proper examination not apparently detectable, within 10 days after their detection. In case Customer fails to give notice of a defect within these time limits, Customer shall not be entitled to claims and rights based on these defects.

8.3 Upon claiming a defect, the Customer is first of all obliged to immediately provide to FM the defective Products along with the entire corresponding documentation, description of the defect, any analysis carried out as well as information concerning maintenance, storage, utilization of any machinery, handling and delivery of the Products concerned. A part shall be deemed to be free from a defect, when it complies with the agreed specification and is of good workmanship. Upon request of FM, the Customer allows inspection on his site as to the storage or manufacturing processes used for or applied to the Products or other impacts the Products are exposed to. FM assumes no liability as to defects occurring due to processing or remedy or misuse by the Customer, as well as due to wear and tear.

8.4 If the Products show a defect within the limitation period prescribed by Article 9.5 below for its cause FM at the time of the passing of the risk is responsible, the Customer shall have the right to claim supplementary performance by way of, at FM’s sole discretion, either removal of defect or replacement of the Products. In case of removal FM is obliged to reimburse the proven necessary and foreseeable expenses caused by the purpose of removal, especially agreed transport and transportation charges, labor and material costs but only insofar and to the extent these are not increased due to the Products having been transferred to a place different from the place of delivery, unless such transfer is in accordance with the specified use of the Products. FM is entitled to subsequent improvement or replacement delivery also in case of material defects. FM has to be informed about immediately.

8.5 In case supplementary performance fails due to FM’s responsibility, the Customer is in his discretion entitled to deduct the portion corresponding to the defect Products from the purchase price or – in case the breach of duty on the part of FM is essential, to withdraw from the contract.

8.6 After coordinating with us, Customer has to grant the necessary time and possibility allowing FM to carry out all subsequent improvement and replacement deliveries deemed necessary by FM in its sole discretion. Otherwise FM is released from the consequences of damages possibly caused by not having conducted such improvement or replacement delivery.

8.7 Subject to Article 9 below, claims for damages or compensation claims for expenditures are excluded unless expressly provided for in Article 8.1 through 8.6.


9.1 FM is liable for reimbursement of claimed and proven expenses under applicable law, if the claim is based on intent or gross negligence by FM, its representatives or its vicarious agents. In case of a grossly negligent violation of the contract, however, liability shall be limited to foreseeable and typical damages.

9.2 FM is liable under applicable law for culpable breaches of essential contractual obligations. In these cases, however, liability shall be limited to foreseeable direct and typical damages. The contribution of third parties impact, or possible refunds of insurances of customer has to be taken into respect as well.

9.3 Liability for culpable injury of life, body or health remains unaffected. The same shall apply to mandatory liability under applicable enforceable product liability laws.

9.4 Any claims of Customer for damage or compensation for expenditures going beyond those laid out in these FM Sales T&C – irrelevant for which reason, especially for the breach of an obligation under the contract or out of tort – are excluded. Section 9.3 applies accordingly.

9.5 All obligations of FM to reimburse or indemnify Customer hereunder must be expressly accepted by FM in accordance with the terms hereof in advance of any debiting. Debit notes, invoices, set-off or similar statements by Customer without such prior acceptance are hereby rejected. FM shall not be obliged to an individual rejection of such declarations by Customer

9.6 All claims of Customer under these FM Sales T&C for damages or compensation become time barred after one year (i) from acceptance by Customer of the Products in case of work performances or (ii) from delivery of the Products to Customer in all other cases. This shall not apply if and to the extent mandatory law provides for longer time periods.

9.7 As far as the liability of FM is excluded or limited this applies as well to the liability of the employees, staff members, representatives and vicarious agents of FM.

9.8 Customer undertakes to maintain sufficient insurance coverage for liability cases, especially fault and no fault insurance. Customer has to inform his insurer of his obligations hereunder.


10.1 Tools being assembled by or on behalf of FM in connection with the delivery of the Products to Customer and all rights therein and derived therefrom belong to FM, irrespective of cost contribution by Customer. Any transfer of rights in or to such tools to Customer is excluded.

10.2 Where Customer provides tools for the manufacture of Products to FM or otherwise is or becomes the holder of tools for the manufacture of Products, FM shall for the duration of the supply relationship have an unrestricted, noncancellable right to possess and use such tools.

10.3 For contracts which involve development work on the part of FM, Customer does not acquire an inventor’s right in objects or procedures, in the know-how of FM, and in the assembly method of FM developed for manufacturing the Products independent of whether Customer contributed part or all of the development and/or manufacturing costs. Rights pursuant to laws governing inventions made by employees in connection with their work tasks remain unaffected.


Customer agrees to treat confidential all knowledge and information from the business relationship with FM which is not in the public domain. This also and especially applies to knowledge of FM’s know-how independent of whether proprietary or not and FM’s manufacturing methods and procedures if he audits FM or includes FM in the codevelopment of his products. Customer agrees to impose these obligations as his own upon third parties involved by him. Customer is liable to FM for all damages arising from the violation of this obligation. A continued violation of this obligation shall not be considered a continuous offence especially where such continuous of-fence could give rise to arguments against causation of continuing damages by Customer. The confidentiality obligation hereunder constitutes an independent legal duty also after the termination of the business relationship with FM.


No waiver of any right under any of the provision in these FM Sales T&C will constitute a waiver of any other right hereunder. These FM Sales T&C including this clause may only be modified in writing signed by authorized representatives of FM and Customer.


No act or omission in paperless communication with or on electronic platform of shall legally bind FM or otherwise be construed as a declaration of legal content unless such form of communication has been agreed by the Parties in a written document signed by the Parties.


FM’s agents and employees are prohibited from soliciting or accepting kickbacks, bribes and inappropriate gifts and entertainment. Customer is required to avoid any action to induce FM’s agents and employees to accept any improper consideration, whether legal or illegal. Customer warrants that no such consideration has been of-fered or provided. FM reserves the right, and by placing purchase order, Customer hereby agrees to permit FM, to audit any of Customer’s relevant records that are deemed necessary by FM to ensure compliance with this Ethics Policy. An expanded version of FM’s Ethics Statement is available on Customer is further responsible that it and its subcontractors shall comply with all applicable domestic and foreign anti-bribery and anti-corruption laws, and other laws governing improper payments, in connection with the performance of this 

agreement/order/release, including but not limited to, the requirements of the U.S. Foreign Corrupt Practices Act, the UK Bribery Act of 2010, and any other applicable anti-bribery and anti-corruption laws and regulations in other jurisdictions (collectively, the “Anti-Bribery Laws”), and Customer shall not act in any way that could cause FM to be in violation of the Anti-Bribery Laws (such as, by way of example only, providing a kickback, bribe or inappropriate gift or entertainment to any employee or agent of FM or government official or political party in order to obtain or retain business or to secure an improper commercial advantage).


15.1 Products supplied by us are for use in and shall remain in the country of delivery agreed on with the Customer. The reexportation of products may be subject to authority approval and may be governed by the export regulations of the country where the supplying FM plant is located. The Customer shall independently inquire about these regulations with the competent foreign trade authority in such country. Independent of whether the Customer mentions the final place of delivery for the Products, it shall be the Customer’s own responsibility to apply for an authority approval (if necessary) with the competent foreign trade authority, prior to exporting such Products. Any onward delivery of Products by the Customer to a third party, with or without our knowledge, also obligates the Customer to impose on such third party these export approval rules. The Customer shall be liable to us for due fulfilment of this provision.

15.2 Customer shall confirm that it has, is in the process of obtaining or plans to apply for the status of an authorized economic operator (ZWB/AEO) with the certificate AEO C, AEO S or AEO F. Customers who do not meet the above requirements at present undertake  to meet the following requirements in the meaning of the AEO: (i) goods taken over from authorized economic operators shall only be manufactured, processed, stored or loaded at secure operation respectively storage and transit sites and are during production, storage and transport protected against unauthorized access, (ii) only reliable personnel (e.g. in accordance with list of names as per EC regu-lations 2580 / 2001 and 881 / 2002) shall be engaged in the production, storage, taking in and processing of such goods and (iii) contract partners working on order of the Customer shall be instructed to take measures to ensure the above described security of the delivery chain.


16.1 The legal relationship between the Parties will be governed exclusively by local laws applicable at FM’s principal place of business (registered office), without recourse to the rules on conflict of laws or international agreements such as the Convention on Contracts for the International Sale of Goods (CISG).

16.2 If the Customer is an entrepreneur or company, FM’s principal place of business (registered office) shall be the place of proper fulfilment and place of venue; however, FM is entitled to institute legal proceedings against the Customer in any courts having jurisdiction over him.


Should any provision of these FM Sales T&C be or become invalid or unenforceable, the validity or enforceability of the remaining provisions shall not be affected thereby. If any provision is invalid, FM and the Customer shall agree on a valid provision that comes as close as possible to the original provision in legal and economic terms.

Federal-Mogul September 2013