CHAPTER 2 CONTRACTING GOODS AND SERVICES: THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS (CISG) AND ITS ROLE IN THE MINING INDUSTRY
| Jurisdiction | United States |
(Sep 2015)
CONTRACTING GOODS AND SERVICES: THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS (CISG) AND ITS ROLE IN THE MINING INDUSTRY
Director of Legal Services
Antofagasta Minerals
Toronto
Michael J. Bourassa
Partner
Fasken Marti ne au
Toronto
Martin Ferreira Pinho
Associate
Fasken Martineau
Toronto
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DANIEL ALTIKES is Director of Legal Services with Antofagasta Minerals Canada (Antofagasta), a subsidiary of Antofagasta Plc. He provides legal services and commercial advice within Antofagasta, including both international and domestic issues. He obtained an LLM in Natural Resources and Environmental Law from the University of Denver and his J.D. degree from the University of Chile, Santiago, Chile. Mr. Altikes has practiced mining law for more than 20 years and has participated in transactions based in many mining jurisdictions worldwide. Before Antofagasta, Mr. Altikes was with Minera Los Pelambres, a subsidiary of Antofagasta, with a major law firm based in Toronto, and with a major law firm based in Santiago, Chile.
MICHAEL BOURASSA is a Partner in the Toronto office of Fasken Martineau and was the global mining group's co-ordinator from 2004 to 2012. He has expertise in commercial agreements (joint ventures, royalties, options) related to mineral exploration and mining, as well as extensive experience in Canadian and international mining due diligence issues concerning title, technical matters, and environmental risk. He has also written articles on corporate social responsibility trends in the mining industry and is a member of the firm's CSR Practice group. Michael is a director of the Prospectors and Developers Association of Canada, the first vice-chair of the mining executive committee for the International Bar Association, and a Member-at-Large of the Board of the Rocky Mountain Mineral Law Foundation (RMMLF). Who's Who Legal named Fasken Martineau as "Global Mining Law Firm of the Year" in 2005 to 2009, 2011, and 2015, and Michael as "Mining Lawyer of the Year" in 2010, 2011, 2012, and 2014.
GENERAL TERMS AND CONDITIONS OF PURCHASE
INDEX
1.0 DEFINITIONS OF TERMS USED IN PURCHASE DOCUMENTS
2.0 PRICE
3.0 QUANTITIES
4.0 TAX, PRICE AND PAYMENT POLICIES
5.0 DELIVERY
6.0 AMENDMENTS
7.0 CHANGES
8.0 CONTACTS
9.0 INSPECTION
10.0 EXPEDITING
11.0 TRANSPORTATION
12.0 SHIPMENTS
13.0 WARRANTIES
14.0 PROPERTY FURNISHED BY BUYER
15.0 SECRECY
16.0 PATENTS AND SIMILAR RIGHTS
17.0 ASSIGNMENT/DELEGATION
18.0 DISPUTES
19.0 LAWS AND REGULATIONS
20.0 COMPLIANCE WITH LAWS
21.0 BANKRUPTCY
22.0 TERMINATION
23.0 COMPLETE AGREEMENT
24.0 NON-WAIVER
25.0 FORCE MAJEURE
26.0 THIRD PARTY RIGHTS
27.0 SEVERABILITY
28.0 INDEMNITY
29.0 INSURANCE
30.0 ADVANCE PAYMENTS
31.0 START - UP ASSITENCE
32.0 SPARE PARTS
33.0 LIMITATION OF RESPONSABILITE
34.0 TOXIC AND HAZARDOUS MATERIAL CONTROL ACT
35.0 LANGUAGE
1.0 DEFINITIONS OF TERMS USED IN PURCHASE DOCUMENTS
• "Site", "Plant Site", "Project Site" or "Jobsite" means the Desierto Project which is located in Chile's Region of Antofagasta, approximately 100 km. of the city of Antofagasta and at an elevation of 3,300 m.a.s.l.
• "Project" means Desierto Project
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• "Work" or "Services means the entire undertaking to be performed to the highest industry standards specified in the Purchase Order by the Seller and includes the furnishing of tools, all or any part of the engineering, equipment (temporary or permanent), machinery, appliances, materials and supplies, labor (complete with supervision) and other services and requirements of whatever nature called for, by the Purchase Order.
• "Owner" means MINERA DESIERTO
• "Buyer" means MINERA DESIERTO
• "Owner's Representative" means INGENIERIA DE CHILE
• "Bidder" means the individual or entity offering to perform the Work called for, by specific invitation.
• "Seller" means the individual or entity awarded a Purchase Order by the Buyer to perform the Work or Service. Seller must appoint an Agent in Chile with the same liabilities and responsibilities as the Seller.
• "Purchase Order", "PO" or "Order" means the formal document which serves as a contract between the Buyer and Seller to perform the Work.
2.0 PRICE AND UNIT RATES
The price as stated in the Purchase Order is not subject to escalation, except as expressly provided therein or by amendment. Seller warrants that the price complies with all applicable laws, regulations, terms and conditions of the Purchase Order.
Notwithstanding anything to the contrary stipulated in the Purchase Order, if during the term of the Order there are changes or new laws,
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ordinances, statutes, rules, regulations, orders or decrees (including changes to tax laws) which become effective and which affect the cost or time of performance of the Order, Seller shall immediately inform Buyer and Seller shall then, without undue delay, submit detailed documentation of such effect in terms of both time and cost of performing the Order.
An equitable adjustment shall be made to the time or dates for delivery of the goods and an equitable adjustment to the price payable for the goods shall be made to compensate Seller for any increase in costs resulting there from.
If rates are stated in this Purchase Order, such rates shall be used for the purpose of determining the cost of any Change Order.
3.0 QUANTITIES
Quantities ordered must not be exceeded by Seller without written permission given by Buyer except on bulk items where industrial specifications set standard allowable overages. Quantities furnished must not be less than ordered unless Seller has received written permission from Buyer. Buyer will directly deduct the resultant cost from price or charge the resultant costs as a backcharge against the Purchase Order price.
4.0 TAX, PRICE AND PAYMENT POLICIES
The goods covered by this Purchase Order require the addition of the applicable Tax (VAT) in local sales and consider any and all taxes up to FOB in offshore sales. Seller may be required to collect and pay sales and use taxes as part of this order.
Payment is due only on final completion and delivery and submission of required documentation. Invoices are payable the last Friday within the thirty (30) day period after receipt of a correct and valid invoice unless otherwise agreed to in the Purchase Order, in
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which case special terms of payment must be shown on all invoices.
Discounts, if applicable, are calculated starting on the date that each correct invoice reaches Buyer to his satisfaction. If Buyer requires as a payment condition, Seller shall furnish Buyer's forms of complete and partial lien waivers or waivers for loss or interruption of product or production or loss of business or profit, and general consequential damages from Seller and from its suppliers and subcontractors as a condition of payment. Buyer may withhold payment in whole or in part without Buyer becoming liable to Seller if Buyer has reasonable grounds to believe that Seller can become bankrupt or has bankrupted; may be liable to it or has or may default or that a lien or other claim including a claim to proceeds has or may be filed, provided that such withholding shall only be to the extent and for so long as is reasonably necessary.
If payments are made to Seller prior to delivery, Buyer will require Seller to execute lien waivers and security agreements as necessary to protect Buyer's interests.
Payment shall not mean acceptance of the Work and does not relieve Seller of any obligations to perform all activities in accordance with all requirements of the purchase order.
Invoices must be submitted in accordance with the procedures set forth in the "Invoicing Instructions" which are incorporated as an attachment to the Purchase Order.
5.0 DELIVERY
Seller shall make deliveries as specified in the Purchase Order, or if not specified, in accordance to the schedules that Buyer may reasonably require.
6.0 AMENDMENTS
Amendments or changes shall bind Buyer only if
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made by means of a written change order, signed by Buyer.
7.0 CHANGES
No changes shall be made in this Purchase Order without the prior written instruction by Buyer. Buyer may make changes within the general scope of the Order. If Seller commences performance of the change after notice of such change is sent, Seller shall be bound by such change and any terms included therewith. The price and time of performance will be equitably adjusted based on Seller's cost for the change based on reasonably accurate and complete detail to be provided upon Buyer's request concerning such adjustments. Changes and corrections that do not affect the Seller's net cost shall be made without charge.
8.0 CONTACTS
Any and ail contacts pertaining to the specifications, terms, conditions, prices, or delivery on this Order shall be made exclusively between Buyer and Seller through the proper representative of Buyer's Purchasing Department.
9.0 INSPECTION
Buyer, including designees, may at any reasonable time inspect and test items or work covered by this Order at any time or location, including during fabrication. Seller shall advise the Buyer of the expected fabrication starting date, other test dates to be performed during fabrication and dates of readiness for final inspection and provisional acceptance tests. Seller shall bear all costs for testing and inspections required to be performed by Seller or others retained by Seller. Seller shall provide without charge to Buyer reasonable access to and use of its facilities for tests and inspections. Seller shall prepare and furnish without additional
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charge such test reports and analysis certificates in such number as Buyer may require. Without prejudice to its other rights, Buyer may reject nonconforming goods...
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