Chapter 10 Erection, Test Runs, Commissioning, Performance Test and Acceptance
10.1 The Erection, Test Runs, Commissioning and performance Test of Contract Plant shall be carried out by the Buyer under the technical instruction rendered by the Seller. The scope of the Technical Service is specified in Appendix 4.
10.2 Either Party shall nominate one (1) Site Representative respectively _______ days before the beginning of Erection. Both Parties shall carry out the Erection, Test Runs, Commissioning, Performance Test and Acceptance of the Contract Plant in accordance with Appendix 10, details of which shall be recorded in a log book and signed by Site Representative of the two Parties.
10.3 The Erection shall be conducted and completed within ______ month from the Effective Date of the Contract. When the Erection is completed in accordance with Technical Documentation, both Parties shall sign the certificate for Erection within five (5) days following its completion. The signing date of the said certificate shall be deemed as the completion date of the Erection.
10.4 The Test Runs shall be conducted and completed within _______ month following the completion date of Erection. If the Test Runs has been performed and found in conformity with the Technical Documentation, a certificate for the Test Runs shall be signed by the Site Representative of the two Parties within five (5) days following its completion.
10.5 The Commissioning and Performance Test shall be conducted for no more than ____ times and completed within ____ months following the completion date of Test Runs. Detailed procedures for the Commissioning and Performance Test shall be submitted by the Seller before the completion of Test Runs and be agreed upon by both Parties.
In order to facilitate Commissioning and Performance Test, the Buyer shall, pursuant to Appendix 10, make available maintenance, laboratory and testing facilities and skilled personnel as well as utilities and all raw materials in the specified quantity and quality, and the Seller shall make available qualified technical personnel and adequate spare parts as well as other items specified in Appendix 10.
The Buyer shall take the sample and conduct the analytical test in the presence of the Site Representative of the two Parties. In case the Contract Plant fails to meet the requirements specified in Appendix 10 in Commissioning, both Parties shall make investigations thereon and the party responsible for the fail shall take appropriate measures to eliminate the defects and/or facilitate Commissioning.
10.6 When good and stable operation of the Contract Plant has been achieved in the Commissioning, the two parties fix the starting date for the Performance Test. The period of the Performance Test is _______ days. The Performance Test shall be carried out in accordance with Appendix 10, details of which shall be recorded in the log book and signed by the Site Representatives of the two parties within five (5) days following the completion.
In case all the guarantee indices specified in Appendix 3 are fulfilled in Performance Test, an acceptance certificate for the Contract Plant shall be signed by the Site Representatives of two parties within five (5) days following its completion in four (4) copies, two (2) for each party.
10.7 In case any item does not reach the performance or guarantee indices specified in Appendix 3 in the Performance Test, both parties shall make investigations into the reason for the failure and solve the problem as follows:
10.7.1 In case any of the Performance and guarantee indices are not fulfilled for the reason attributable to the Seller in each Performance Test, the Seller shall take measures to eliminate the defects in the Contract Plant within the period agreed upon both by parties. All cost involved, including but not limited to the working hour cost, equipment and raw material cost, freight and insurance premium involved in delivery to and/or from the Job Site as well as the technical service for the Seller's personnel, shall be borne to the Seller.
After the defects have been eliminated, additional performance Test shall be carried out as soon as possible in accordance with Appendix 10. But the opportunity of Performance Test for the Seller is limited to three times. In case any of the performance or guarantee indices are not fulfilled in its third opportunity for Performance Test for the reason attributable to the Seller, the Buyer has the right to claim against the Seller for liquidated damage in accordance with the provisions of Appendix 10. The liquidated damages will not apply unless or until the results of the last Performance Test show that the Contract Plant reach the minimum level of the technical performance and guarantee indices specified in Appendix 10.
After acceptance of liquidated damages, the Buyer shall sign the Acceptance certificate for the Contract Plant in one (1) original and one (1) duplicate. Nevertheless, the Seller shall make the Contract Plant reach the technical performance and guarantee indices specified in Appendix 3. The payment of liquidated damages shall not release the Seller from its obligation in the Warranty Period.
10.7.2 In case the failure in the Performance Test is for the reason attributable to the Buyer, the Seller shall assist the Buyer in arranging another Performance Test. All the costs thus incurred shall be for the Buyer's account.
In case performance and the guarantee indices cannot be reached for the reason attributable to the Buyer in another Performance Test, the Contract Plant has to be accepted by the Buyer and an acceptance certificate shall be signed by the Site Representatives of the two Parties within five (5) days after the completion of the Performance Test. However, the Seller shall assist the Buyer in taking necessary measures to make the Contract Plant reach the performance and guarantee indices. All costs thus incurred including additional technical service fee shall be for the Buyer's account.
10.8 In case the Test Runs and/or Commissioning and/or the Performance Test are delayed and/or additional cost arises in other circumstances for the reason attributable to the Seller, the Buyer has the right to claim for damages and losses thus incurred.
If no Performance Test is conducted for the reason attributable to the Buyer months from the date of Bill of Lading covering the fast shipment, the Contract Plant is deemed to have been accepted by the Buyer. However, the Seller shall assist the Buyer in starting up and operating the Contract Plant within the scope and the amount of Technical Service specified in Appendix 4.
10.9 The Acceptance of the Contract Plant shall not release the Seller from his warranty for the Contract Plant.
Chapter 11 Guarantee and Warranty
11.1 The Seller guarantees that the Contract Plant shall be in safe and stable operation, and qualified Contract Products as specified in Appendix 3 can be produced in the Contract Plant.
11.2 The Seller guarantees that it is the legitimate owner and/or holder of the licensed know-how and/or patent and has the right to grant the license thereof to the Buyer.
In case the Buyer is accused of illegal exploitation or infringement of such know-how and/or patent and/or other intellectual property rights within licensed territory, the Buyer shall give the Seller a notice and the Seller shall take up the matter with the third party at its own cost in the Buyer's name and with the Buyer's assistance and indemnify the Buyer for any costs, compensations or damages arising there from.
11.3 The Seller guarantees that the licensed know-how and/or patent shall be well developed and industrialized and be exploitable in accordance with the Technical Documentation specified in Appendix 2.
11.4 The Seller guarantees that the Contract Equipment shall be completely new, advanced in technology and superior in quality, free from any defect in design, material and workmanship, in conformity with Appendix 3 and suitable for the use and purpose under the Contract.
The Seller guarantees that the use of Contract Equipment and/or manufacture and sale of Contract Product in the licensed territory is free from any infringement claim raised by a third party. In case the Buyer is accused of illegal exploitation or infringement of any know-how and/or patent and/or other intellectual property rights arising from the use of the Contract Equipment and/or manufacture and sale of Contract Product in the licensed territory, the Buyer shall give the Seller a notice and the Seller shall take up the matter with the third party at its own cost in the Buyer's name and with the Buyer's assistance and indemnify the Buyer for any costs, compensations or damages arising therefrom.
11.5 The Seller guarantees that the Technical Documentation shall be complete, clear and correct so as to meet the requirements of design, inspection, Erection, Test Runs, Commissioning, Performance Test, operation and maintenance of Contract Plant.
11.6 The Seller guarantees that qualified technical personnel shall be dispatched in due time to provide professional, correct and efficient Technical Service and Technical Training.
11.7 The Warranty Period of the Contract Plant shall be ________months from the date of Acceptance of the Contract Plant. The warranty for the Contract Plant is specified in Appendix 3. In case the Contract Plant is found defective in the Warranty Period for the reason attributable to the Seller, the Seller shall promptly repair or replace the defective equipment upon receipt of the Buyer's notification. The Warranty Period for the repaired or substitute equipment shall be recalculated upon acceptance by the Buyer.
During the Warranty Period, if the operation of the Contract Plant has to be stopped for the reason attributable to the Seller, the Warranty Period shall be prolonged accordingly. At the expiration of the Warranty Period, the Buyer shall issue a certificate for the expiration of the Warranty Period of the Contract Plant in one (1) original and one (1) duplicate copy.
Chapter 12 Improvement and Grant-back
12.1 In case any improvement is made by the Seller on the licensed patent and/or know-how within the validity period of the Contract, the Seller shall grant the Buyer license to use such improvements without any charge. The Seller shall, if necessary, render technical assistance so that the improvements can be put into practice in the Contract Plant. All the costs incurred in the technical assistance shall be borne by the Buyer pursuant to terms and conditions specified in Appendix 4.
12.2 The Buyer is entitled to make any improvements on the licensed patent and/or know-how in the exploitation thereof. In such case, the Buyer shall inform the Seller and grant-back such improvements royalty-free to the Seller. Any such improvements shall be the exclusive property of the Buyer.
12.3 Either Party is obliged to keep the improvement granted by the other party confidential and promise not to sub-license it to any third party.
Chapter 13 Confidentiality
13.1 Within ____years after the Effective Date of this Contract, either Party is obliged to take proper measures to keep the know-how and related Technical Documentation strictly confidential from any third Party except those who are engaged in the performance of the Contract. However, they are subject to the same confidential obligation.
13.2 Either Party shall keep confidential the trade secrets which it and/or its technical personnel may obtain or be accessible to in the course of performing the Contract and shall not make use of or disclose such information without prior written consent given by the other Party.
13.3 The confidential obligation shall not apply to the information which:
A. now or hereafter enters the public domain;
B. can be proved to have been in the possession of either party at the time of disclosure and which was not previously obtained, directly or indirectly, from the other party hereto;
C. lawfully becomes available to either party from a third party under no obligation of confidentiality.
Chapter 14 Claim
14.1 In case the Seller fails in performing any of its obligation under the contract during the design, manufacture, inspection, Erection, Test Runs, Commissioning, Performance Test and Warranty Period, the Buyer has the right to lodge claims against the Seller for the following remedies:
14.1.1 Repair the defective Contract Equipment or eliminate the defects or discrepancies of the Contract Equipment at the Seller's expenses. In case the Seller fails to dispatch his personnel to the Job Site, the Buyer has the right to eliminate the defects or discrepancies by itself for the Seller's account.
14.1.2 Replace the defective Contract Equipment or Technical Documentation in error with new one or supplement the omitted Contract Equipment or Technical Documentation at the Seller's expenses and the Seller shall warrant the quality of the substitute equipment in a newly calculated Warranty Period. The substitute and/or supplemented equipment shall be delivered to the Job Site at the Seller's cost and risk, and the equipment in urgent need shall be airborne to the Job Site.
14.1.3 Devalue the Contract Equipment according to the degree of inferiority, extent of damage and amount of losses suffered by the Buyer.
14.1.4 Compensate for other losses and damages arising out of the Seller's default.
14.2 The claim notice shall be effective if it is issued not later than thirty (30) days from the expiration of the Warranty Period.
14.3 In case the Seller fails to reply within fourteen (14) days upon receipt of the Buyer's claim, the claim shall be regarded as being accepted by the Seller.
Chapter 15 Cacellation
15.1 The Buyer may, without prejudice to any other remedy for the Seller's following breach of contract, by written notice of default sent to the Seller, cancel the Contract in whole or in part, if the Seller
A. fails to deliver the Contract Equipment and/or Technical Documentation within days after the scheduled delivery time; or
B. fails to make the Contract Plant reach the minimum level of the technical performance and guarantee indices specified in Appendix 10; or
C. fails to perform any other obligations under the Contract except minor parts thereof, and does not remedy its failure within a period of _______days upon receipt of the default notice from the Buyer.
15.2 Either party may at any time cancel the Contract, by giving written notice to the other party in case the other party becomes bankrupt or insolvent. Such cancellation shall not prejudice or affect any other available remedy.
15.3 In the event the Buyer cancels the Contract in whole or in part, the Buyer may procure upon appropriate terms, the equipment, documents and/or the service similar to those undelivered and/or unperformed, and the Seller shall be liable for any excess costs. Nevertheless, the Seller shall continue performance of the Contract to the extent not cancelled.
Chapter 16 Force Majeure
16.1 Should either party be prevented from performing any of its obligations under this Contract due to the event of Force Majeure, such as war, serious fire, typhoon, earthquake, flood and any other events which could not be expected, avoided and overcome, the affected party shall notify the other party of occurrence of such an event by fax and send by registered airmail a certificate issued by competent authorities or agency confirming the event of the Force Majeure within fourteen (14) days following its occurrence.
16.2 The affected party shall not be liable for any delay or failure in performing any of its obligations due to the event of Force Majeure. However, the affected party shall inform the other party by fax the termination or elimination of the event of Force Majeure as soon as possible.
16.3 Both Parties shall proceed with their obligations immediately upon the cease of the event of Force Majeure or the removal of the effects and the term of the Contract shall be extended correspondingly. Should the effect of the event of Force Majeure last for more than one hundred and twenty (120) days, either party has the right to terminate the Contract by a written notice.
Chapter 17 Taxes and Duties
17.1 All taxes and duties in connection with and in the performance of the Contract levied by Chinese government on the Buyer in accordance with the tax laws of PRC shall be borne by the Buyer.
17.2 All taxes and duties levied by Chinese government on the Seller, in connection with and in the performance of the Contract, according to Chinese tax laws and the agreement between the government of the People's Republic of China and the government of the Seller's country for the reciprocal avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, shall be borne by the Seller.
The Buyer is legally obliged to withhold, as required by Chinese tax laws, certain amount of taxes pro rata each taxable payment under this Contract and pay them to the relevant Chinese tax authorities. Upon receipt of the tax receipts issued by the relevant Chinese tax authorities for the aforesaid withholding taxes, the Buyer shall forward to the Seller without undur delay.
17.3 All taxed and duties arising outside PRC in connection with and in performance of the Contract shall be borne by the Seller
Chapter 18 Arbitration
18.1 Any dispute arising from or in connection with this Contract shall be submitted to China International Economic and Trade Arbitration Commission ,Shenzhen Commission for arbitration which shall be conducted in accordance with the Commission's arbitration rules in effect at the time of applying for arbitration. The arbitral award is final and binding upon both parties and the applicable law is the material law of P.R.C.
18.2 Notwithstanding any reference to arbitration, both Parties shall continue to perform their respective obligations under the Contract unless otherwise agreed.
Chapter 19 Effectiveness of the Contract and Miscellaneous
19.1 After the Contract is signed by the authorized representatives, each Party shall apply to its respective authorities for ratification if required to do so and shall make effort to obtain the approval from the respective authorities within (30) days after the signature of the Contract. Each Party shall notify the other promptly in writing of the date of ratification and the Contract becomes effective on the later date of ratification.
19.2 The validity period of the Contract is ____years. Any unsettled credit and debt under the Contract shall not be affected by the expiration of the Contract. The debtor shall effect its obligation of reimbursement to the creditor.
The Contract is made in two counterparts each in Chinese and English, each of which shall deemed equally authentic. The Contract is in four (4) originals, two (2) for the Buyer and two (2) for the Seller.
19.4 Appendices to the Contract are integral parts of the Contract and shall have the same legal force as the text of Contract itself. In case of discrepancy between the text of the Contract and Appendices, the text of the Contract shall prevail.
19.5 All amendments, supplements and alterations to the terms and conditions of the Contract shall be made in written form and signed by the authorized representatives.
19.6 Unless otherwise specified in the Contract, the terms and conditions of the Contract shall be interpreted in accordance with ICC International Rules for the Interpretation of Trade Terms (INCOTERM 2000 Edition) and ICC Uniform Customs and Practice for Documentary Credits (UCP 500).
19.7 No assignment of any right or obligation under the Contract shall be made by either party to a third party without the previous written consent of the other party.
19.8 The communication between the two Parties shall be conducted in written form. The faxes concerning the important matters shall be confirmed in due time by registered or express mail.
Seller :__________________________________________________.
Address :________________________________________________.
Post Code :_______________________________________________.
Telephone :_______________________________________________.
Fax :____________________________________________________.
E-mail:__________________________________________________.
Authorized Representative signature :__________________________.
Signing Date :_____________________________________________.
Buyer :__________________________________________________.
Address :_________________________________________________.
Post Code :_______________________________________________.
Telephone :_______________________________________________.
Fax :____________________________________________________.
E-mail:__________________________________________________.
Authorized Representative signature :__________________________.
Signing Date :_____________________________________________.
Appendix 4 The Contents of Technical Service and Treatment of the Seller's Technical Personnel
1. For the purpose of smooth construction of the Contract plant, the Seller shall dispatch skilled, healthy and competent technical personnel to the Job Site for Technical Service. If necessary, two Parties may adjust any items specified herein according to the master schedule of the Contract Plant through discussion.
2. Two (2) months before departure of the Seller's technical personnel for the Job Site, the Seller shall notify the Buyer of the information including their name, sex, date of birth, nationality, passport No., specialty, qualification, occupation, working place and foreign language ability for the Buyer's assistance and confirmation. The Seller shall within seven (7) days before their departure, notify the Buyer of the information, including their names, exact date of departure, flight No., exact arrival date, pieces and weight of luggage.
3. The Seller shall appoint one (1) of the its technical personnel as the Site Representative in order to solve the technical problems related to the Contract Plant.
4. A general working schedule and a monthly plan shall be negotiated and agreed upon by the Site Representatives of both Parties after the arrival of the Seller's technical personnel at the Job Site. Any revision to the working schedule shall be made by the Site Representatives of both Parties through consultations. The Seller's technical personnel shall carry out their work according to the agreed working schedule.
5. In the period of Erection, Test Runs, Commissioning, Performance Test, operation, and maintenance of the Contract Plant, the Seller's technical personnel shall explain in detail the Technical Documentation, give necessary demonstrations and answer technical questions raised by the Buyer.
6. The Seller's technical personnel shall work forty (40) hours per week (work five (5) days per week and eight (8) hours per day). The daily starting and closing time shall be pursuant to the regulations of the Job Site. All Saturdays, Sundays and official holidays of PRC shall be holidays without salary for the Seller's technical personnel.
If overtime work is needed, mutual agreement shall be reached in advance between the Site Representatives of both Parties. The extra working time beyond eight (8) hours on normal working day, or the working hours on Saturdays, Sundays and on the official holidays shall be regarded as overtime. However, the working hours of the Seller's technical personnel on shifts over forty (40) hours per week during the period of Commissioning and Performance and Performance Test of the Contract Plant shall not be regarded as overtime. The compensation days for working overtime shall be arranged without undue delay after the overtime work, otherwise one hour of overtime shall be recorded as one one and half hours (1.5) in the time sheet. The technical personnel shall be permitted to take one-day leave in case of overtime work in excess of six (6) hours.
7. The actual working hours and overtime hours of the Seller's technical personnel shall be recorded per day in the time sheets in duplicate and signed by the Site Representatives of both Parties. The time sheet shall be the basis for calculating the Technical Service fee and overtime fee of the Seller's technical personnel. The Buyer shall pay the Seller's technical personnel a daily Technical Service fee at the following rate:
Site Representative US$ ___________ per man/day
Chief engineer US$ ___________ per man/day
Engineer US$ ___________ per man/day
Technician US$ ___________ per man/day
8. If any of the Seller's technical personnel is absent from work, the Buyer shall not pay the technical service fee for the period of absence. The Buyer shall not sign the time sheets for the additional working hours the Seller's personnel spend due to the reason attributable to the Seller.
9. The Technical Service fee shall be settled every ______months in accordance with the time sheets signed by the Site Representatives of the two Parties.
10. The progress of work, the main work done every day, all problems arising or the accident and the solution shall be recorded in the log book written in both Chinese and English languages in duplicate and signed daily by the Site Representatives of both Parties, one for each party.
11. The Buyer shall assist the Seller's technical personnel in arranging the formalities for their entrance in, stay in and departure from China. All expenses involved shall be borne by the Seller.
12. The Buyer shall assist the Seller's technical personnel to arrange formalities for import and export proper amount of living effects as well as technical documentation, tools and instru- mentation necessary for the Technical Service in accordance with the regulations of the customs of PRC for the Seller's account. The Seller shall inform the Buyer in advance of the denomination, specification, quantity, weight, airway bill No., value and date of import and export of the above mentioned effects.
13. The Buyer shall, at the Seller's cost, make it available to the Seller's personnel the meals, bedroom furnished with necessary furniture and toilet, office, safety wear, necessary working tools, traffic facilities, interpreters at the Job Site. 14. Miscellaneous
14.1 In case any of the technical personnel is considered insufficiently qualified, the Buyer has the right to request the Seller to replace him. All the costs for the replacement shall be borne by the Seller.
14.2 The Seller may replace his technical personnel at its own cost and with the Buyer's consent provided that the technical service on the Job Site is not affected. The Buyer shall pay Technical Service fee for one person even if both of them are present at the Job Site.
14.3 The Seller's technical personnel shall observe the laws and regulations of PRC and the rules of the Job Site during their stay in China.
Appendix 5 The Contents of Technical Training and the Treatment for the Buyer's Technical Personnel
1. The Seller agrees to receive up to ____ of the Buyer's technical personnel for Technical Training for ____days including round trip traveling days in its factories.
2. In the course of the Technical Training, the Seller shall designate its skilled and qualified technical personnel to render technical instructions to the Buyer's technical personnel and explain all the technical issues the Buyer's technical personnel may confront in performance of the Contract.
3. The Seller shall submit the preliminary training program to the Buyer for confirmation three (3) months before the training starts. One (1) month before the training, the Buyer shall inform the Seller of the trainees' name, sex, birth date, nationality, occupation and specialty. The final training program shall be fixed by both Parties through consultations according to the actual need of the Buyer's technical personnel.
4. The Seller shall ensure the Buyer's technical personnel be trained at different posts in the above mentioned plants to enable them to understand and master the technology, operation, inspection, repairing and maintenance of the Contract Plant. Before the training starts, the Seller shall explain in detail to the trainees the operating regulations and precautions for work.
5. The Seller shall provide the Buyer's technical personnel free of charge with test instruments, tools, technical documentation, drawings, reference date, working clothes, safety wear and other necessities as well as suitable office rooms during their training
6. The Seller shall provide the Buyer's technical personnel with accommodation, meals and traffic facilities at the Buyer's cost.
7. The Seller shall assist the Buyer's technical personnel in dealing with all formalities of obtaining visas for entry and exit as well as their stay in the Seller's country.
Appendix 11 The Specimen of Irrevocable Letter of Guarantee for Advance Payment Issued By the Seller's Bank
Issuing Date :__________ .
Beneficiary :___________
Address :______________ Post Code :____________
Subject: Our Irrevocable Letter of Guarantee No._______
With reference to Contract No.________ (hereinafter referred to as "the Contract") signed between your company and_________(hereinafter referred to as "the Seller") dated _________, covering the sale to you of ________ (plant or project name), with a total Contract price of ________(say: ________only), we, at the request of the
Seller, hereby open this Irrevocable Letter of Guarantee, in your favor to the extent of ______(say: _________only) plus interest and undertake with you as follows:
In the event of your notification that the Seller fails to deliver the Goods and/or Technical Documentation under the Contract, partially or wholly, we shall, within five (5)
working days following receipt of your first written notice, notwithstanding any objection by the Seller, pay you unconditionally an amount up to ___________(say ________only) together with the interests at the rate of ____________%(_______percent) per annum counting from the date of your payment of the advance payment up to the actual date of our payment to you.Our liability under this Letter of Guarantee shall be reduced automatically and proportionally according to the invoiced value of each delivery actually made by the Seller and accepted by you.
This Letter of Guarantee shall come into force upon its issuing date and shall remain valid until sixty (60) days after the date of Bill of Lading of the last shipment. The Letter of Guarantee shall become automatically null and void upon its expiration regardless of whether it is returned to us or not.
_______________________________
(Name of the issuing Bank)
By:_____________________________
(Printed name and designation) (Official seal)
Appendix 12 The Specimen of Irrevocable Letter Of Guarantee
Issued By the Buyer's Bank
Issuing Date : ___________________.
Address :_______________________.Post Code :_______________.
Subject: Our Irrevocable Letter of Guarantee No. ____________.
With reference to Contract No._________(hereinafter referred to as "the Contract") signed between your company (hereinafter referred to as "the Seller") and_______________(hereinafter referred to as"the Buyer") dated ______concerning the purchase from you of___________(project or plant name) with a total Contract price of_________(say _________only), we, at the request of the Buyer, hereby issue our Irrevocable Letter of Guarantee No. ____________in your favor to the extent of__________(say: ___________only) equal to________%(___________percent) of the total Contract Price, and guarantee that the payments shall be made by the Buyer according to the terms and conditions of the Contract and hereby undertake with you as follows:
In case you fulfill the specified contractual obligations and provide the documents pursuant to Article _____,_____,_____found in order by the Buyer, and the Buyer fails to pay the amounts specified in Article ______,_____,______of the Contract wholly or partially, we shall, within seven (7) working days upon receipt of your written notice, invoices and other proven documents as presented by you covering outstanding amount of claim, pay you the relevant amounts plus interest plus interest at the rate of _____% (_____percent) per annum, unless the Buyer can prove that the presented documents are not in conformity with the provision of the Contract.
In case of confirmation by the Buyer that liquidated damage, compensation and liquidated damage should be paid by you according to the provisions of the Contract, the Buyer shall be entitled to deduct such amount from may of the above payment as specified in the Contract.
The Letter of Guarantee shall become effective upon its issuing date and shall remain valid until ______________.
Our liability under this Letter of Guarantee shall be automatically deceased pro rata upon payments made by the Buyer or us.
This Letter of Guarantee should be returned to our bank after its expiration.
___________________
(Name of the issuing Bank)
By:____________________
(Printed name and designation)