These general terms of agreement are applicable to all deliveries ordered by Shipbuilding Completion Oy, including designs, materials, installation works and whole deliveries, whenever the parties have so agreed in writing or in any other way. Shipbuilding Completion Oy is hereafter known as ”The Orderer”, and the other contracting party as ”The Deliverer”. The object of the contract (including drawings, documents, services, installation works and materials) is hereafter referred to as ”The Delivery”. In addition to the present stipulations, all terms and conditions mentioned in drawings, technical appendices, materials standards or in the order itself, and in other technical reports or commissions, and that are applicable to materials and works, are to be observed. The Delivery is to comply with all current rules and regulations issued by the Assessment Institution and other authorities. All commerce-related terms appearing in contract documents are to be interpreted according to ”INCOTERMS 2010”.
1.Price and terms of payment
The price stipulated in the order is to be regarded as full retribution for all the Deliverer’s contract duties. The Deliverer is not entitled to any additional retribution unless such retribution has been separately agreed upon in writing.
The said price includes all costs such as taxes and payments, salaries, social fees, daily allowances, accommodation costs, travel costs, packaging of work tools and materials, contract-stipulated transports and any other expenses possibly arising for the Deliverer, unless stated otherwise. The price is regarded as fixed and is not to be subject to change in the event of a possible delay or advance of the date of delivery.
All invoices for contract duties are to be paid once the invoice has been handed over to the Orderer and the work stage corresponding to such payment, as established in the contract, has been completed to satisfaction, or whenever the invoice has otherwise been passed as payable and approved by the Orderer.
Payment is regarded as due from the date of arrival of an invoice complying with the abovementioned payability terms.
All invoices are to state the order number, work number, the total price, total stage payments already made effective and the current stage payment to be paid. The invoice is also to enclose a follow-up report signed by the person established by the delivery contract as being in charge of the work, showing the stage of completion and the quantity and/or completed additional work plus any extra hours ruled by the contract as subject to a charge, when such circumstances are stated in the invoice. Any invoice not containing the abovementioned data or enclosure shall be returned.
2. Object of the contract
2.1 Description of the commission
The Deliverer is to design, build, install and supply the Delivery in the terms of the present contract and as specified in more detail in the main contract and its enclosures.
All details and materials as well as any designs, building and installation works or deliveries that are required for a successful completion affecting the activity or performance, though not expressly stated in the contract, are to be regarded as included in the Delivery order. The initial information acts as a limit for the Delivery unless later agreed otherwise.
2.2 Designs, drawings and technical reports, and the corresponding secrecy obligations and delivery liabilities.
The designs shall be based on the Orderer’s or the Orderer’s client’s designs. The Deliverer is to acquire the necessary official authorisations.
Unless otherwise agreed, the Deliverer shall provide the Orderer with an original drawing and a dwgor cad-file containing the drawings he has produced, plus two paper copies. A partlist is to be created in the data system for any drawings containing materials supplied by the Orderer or by the Orderer’s client. The Orderer is entitled to the use of the Deliverer’s technical reports for a due purpose such as purchase supervision, installation works, maintenance or repairs, or to allow a third party to use them as originals or copies to the same ends.
The Deliverer has the obligation to provide the Orderer with all materials required for basic designs and any new information required for their updates as soon as changes are made or when the said information is available.
All technical reports required to produce the Delivery and that are provided by the Orderer to the Deliverer are still property of the Orderer. Such reports are not to be used, copied or brought to the knowledge of a third party without the Orderer’s written consent, unless necessary in order to comply with contract obligations.
As the work progresses, the Deliverer is to ensure by his own account the availability of all the latest relevant materials pertaining to the Delivery, including drawings, instructions, standards, material data etc., and is equally to inform the Orderer in writing of possible lacks, when necessary. In normal conditions, the approval period for drawings is two (2) weeks, the period for submitting comments being one (1) week.
The Deliverer has the obligation to inspect all received materials and to ensure that all necessary measures, materials and material handling, installation works, tests and uses are correct in order for the Delivery to meet the terms of the present contract. The responsibility of the Deliverer is in no manner diminished by the Orderer’s approval of the drawings and supervision of the work.
The Deliverer is to assign a contact person to be in charge of the project, supervising and reporting on its progress until completion. The Deliverer shall upon the Orderer’s request present a project plan showing schedules for designs, materials, production of parts and installation, and plans establishing the occupational distribution of the workers.
3. Instructions for use and maintenance, spare parts
The Deliverer is to provide instructions for the use and maintenance of the delivered products for the Orderer. The Deliverer is to maintain a sufficient availability of spare parts during no less than the warranty period, and to supply them to the Orderer without delay at his request.
4. Follow-up of the Delivery
The Deliverer and the Orderer shall update the schedules at regularly kept work site meetings, during which the Orderer is to be informed of the Deliverer’s progress, providing the Deliverer with any relevant information regarding other suppliers’ schedules that may have an effect on the Deliverer’s work.
The Deliverer’s staff shall observe the ship yard’s work schedules. If necessary on account of the work’s size, the Orderer has the obligation to organize a means for the Deliverer to work outside the yard’s scheduled working hours.
5. Changes and additional works
The Deliverer is to abstain from making any changes affecting the product’s design, production or installation as established in the contract, or to alter the product’s agreed quality or time of delivery, without the Orderer’s written consent.
No changes are to be executed until a written agreement has been signed. The parties are simultaneously to agree on the effect such changes may have on the schedule and price.
Only the following items are to be regarded as changes and additional works subject to extra charge:
- Should the Deliverer be forced to change already completed work due to circumstances caused by the Orderer.
- Should there be a substantial change in the size of the work.
- Should each individual change occupy more than 8 working hours.
- Waiting periods and extra hours are not to be regarded as additional work.
Payment for any changes shall be made effective only when the Deliverer proves that such changes are legitimate as above. A written request shall obtain a written reply within two weeks.
The Orderer is entitled to request changes affecting the delivery’s size, design, production, installation or quality, upon which either party may request that the price, time of delivery and the insurance be accordingly reviewed.
The Deliverer is equally responsible for any changes required by the Orderer, if not agreed otherwise when negotiating such changes.
All changes are to be charged according to the corresponding price list enclosed to the contract. Should any change lack a unit price, an agreement based on the Deliverer’s written estimate is to be reached before proceeding to execute such changes.
Should it be agreed that the changes are to be executed at cost price, an extra 10% is to be added for general costs. The Deliverer is to provide the necessary details justifying the cost price at the Orderer’s request. The extra charge for general costs is not to be affected by any compensations.
6. The Deliverer’s obligations and work force
The Deliverer shall deliver the product specified in the present contract and according to its terms. All general contract stipulations and all other terms and rules specified in the delivery contract’s enclosures are to be observed.
6.1 The Deliverer is to complete the work using mainly his own staff, who shall work under the Deliverer’s orders and supervision. The Deliverer is to present his most important subcontractors and suppliers for the Orderer’s approval before hiring them, with sufficient notice. Approval can only be refused on justified grounds. The approval of a subcontractor or supplier by the Orderer does not diminish the Deliverer’s responsibility. Before commencing the work, the Deliverer shall present a list containing all the workers’ details as requested by the Orderer (ie. welding competence) to the Orderer’s contact person. The Deliverer is to keep the forementioned list updated with any changes affecting the staff. The Deliverer’s contact person is to notify on a weekly basis the names of the workers assigned to each station of a delivery to the Orderer’s contact person.
The Deliverer has the obligation to ensure the availability of the present general stipulations for all his subcontractors and to ensure that these subcontractors accept such stipulations bindingly. Only the Deliverer answers to the Orderer by the present contract. Towards his staff and the staff of his subcontractors, the Deliverer has the responsibilities of an employer as established in the general conditions of the trade and as ruled by labour and social laws. The Deliverer is responsible for the use of protective gear by his employees and shall ensure that all machineries and equipment comply with the corresponding security standards.
The Deliverer shall present the following certificates in accordance to the Act on the Contractor’s Obligations and Liability when Work is Contracted Out (1233/2006). The following certificates and clarifications shall be presented before the agreement is signed:
- information on whether the enterprise is entered in the Prepayment Register and in the Employer Register and registered as VAT-liable.
- extract from the trade register or equivalent information otherwise obtained from the trade register
- information showing that the enterprise does not have tax debts or a certificate provided by an authority showing the amount of the tax debt;
- certificates of employee’s pension insurances taken out and of pension insurance premiums paid, or an account that a payment agreement on outstanding pension insurance premiums has been made;
- an account of the collective agreement or the principal terms of employment applicable to the work; and
- information showing that the occupational health care services are provided.
In case the Deliverer is a foreign company, the Orderer is required to request also all other additional clarifications based on Finnish legislation and the Deliverer is obliged to provide them.
Should the VAT or advance tax registry status expire during the work, the Deliverer is to present proof of having renewed such registration before issuing the next upcoming invoice. Should the Deliverer not succeed in renewing the said registrations, the Orderer is to withhold the advance tax according to the percentage confirmed by the tax authorities.
The Deliverer shall be responsible that all posted workers used by the subcontractors and by the Deliverer shall be reported to the OSH Authority before the work begins as specified in the below guidance.
6.3 Any measures required by the use of or changes in the work force, such as common practices regarding security and quality control on site, as well as access passes, are to be agreed upon no later than at the contract negotiations.
6.4 The Deliverer is responsible for the following items on site: Moving of materials
- Cleaning during working hours
- Protection during working hours and
- Final protection of the work
7. The Orderer’s obligations
The Orderer shall provide the Deliverer with all necessary information and source information related to the delivery.
8. Obligations of management, joint operation and cooperation on site
The Orderer is responsible for the management of the site. The Orderer is to appoint a competent person to be in charge of security and of the general direction of the site’s health requirements and conditions.
Based on the Deliverer’s initial draft, the Orderer and the Deliverer are to cooperate to produce a work schedule, and when necessary also a design schedule, which are to be duly approved and generally observed. With the exception of specifications, all changes to such schedules must obtain mutual approval.
The Orderer is to ensure that the Deliverer may complete his own work without any interference from other works performed or ordered by the Orderer.
9. Contract validity and expiry
The present contract comes into force when signed by both parties and expires once the Deliverer has completed the agreed commission. Before commencing any works of design or construction, the Deliverer must present a plan showing all quality and security measures to be taken, for the Orderer’s approval.
10. Notice and cancellation
The Orderer is entitled to cancel the contract with immediate effect should the other party commit an essential breach of any of its terms or conditions, or should he fail to correct any missteps upon receiving a due observation thereof. As an example, any of the following situations may be regarded as legitimate reason for cancellation:
10.1 The Deliverer flagrantly breaches against his contract obligations in a non trivial fashion, in spite of the Orderer’s observations;
10.2 It is clear that the Deliverer is incapable of meeting his contract obligations in that, for an example:
The Deliverer postpones payment of his debts or threats to do so.
The Deliverer is placed in bankruptcy, liquidation or debt restructuring.
The Deliverer’s financial status or activity otherwise suggest that he will not be able to meet his contract obligations.
The Deliverer has neglected his insurance obligations.
When it is probable that the Delivery will not meet its purpose, due to i.e. low quality.
The work stages established in the mutually accepted work schedule are delayed more than five (5) weeks due to circumstances caused by the Deliverer.
The Deliverer breaches against his secrecy obligation.
A competitor of the Orderer purchases the Deliverer’s business.
Should the Orderer use his right to cancel the contract due to a reasonable cause, stated anywhere in the contract, he may cash the security deposit given by the Deliverer in order to satisfy any damages caused by the Deliverer’s contract breach. The Deliverer is responsible to compensate all costs to the Ordered due to the termination. Should this occur, the Deliverer is to:
- Return all equipments and materials belonging to the Orderer to the proprietor, or pay their due value;
- Pay for all damages exceeding the amount of the deposit that are caused to the Orderer by the Deliverer’s contract breach.
The Orderer is entitled to withhold any payments due to the Deliverer until the total amount of the damages caused by the Deliverer’s contract breach has been finally clarified.
The Deliverer is entitled to interrupt the project and cancel the contract in the event that the Orderer:
- ceases to make duly agreed payments.
- flagrantly breaches against the contract.
- enters bankruptcy or liquidation.
Cancellation of the contract must be done in writing.
11. Force majeure
The Orderer cannot demand compliance with the contract if such compliance is hindered or made unreasonably difficult by an event definable as force majeure, such as fire, war or other circumstances beyond the parties’ control. When facing force majeure, the Deliverer has the obligation to notify the Orderer within three days, stating its quality and how the time of delivery will possibly be affected. The delayed reception by the Deliverer of a delivery from a third party does not constitute force majeure. Strikes do not constitute force majeure unless occurring on a nation-wide level.
12. Settlement of discrepancies
Finnish law shall be applicable to the contract and all its appendices.
Any discrepancies arising from the contract are to be settled at the tribunals of the Orderer’s home district.
13. Contract transference
The contract may not be transferred without the other party’s written consent.
14. Other terms and conditions
14.1 Quality and standards / regulations
The Delivery must be built with complete observation of construction standards deriving from other construction objects of similar properties, and with a quality and finish no lesser than on such objects of reference.
14.2 Meetings, inspections and records
Initial meeting: The initial meeting is to be held before the work commences.
Deliverers’ meetings: The Deliverer is to participate without any additional charge in all deliverers’ meetings on site. The schedule of such meetings is to be approved at the initial meeting or as the work progresses.
Site meetings: The Deliverer is to participate without any additional charge in all site meetings with the Orderer, at his request.
Project inspections: Should either party wish to have any single matter that is related to the designs or to the delivery validly ascertained before commencement of the work, a project inspection shall be performed at a mutually agreed time.
Inspections: Should either party wish to have any single matter that is related to the contract validly ascertained, an inspection shall be held on the construction object at a mutually agreed time.
Control of worked hours on site: The Orderer shall control the amount of hours worked by Deliverer’s staff by means of a so called TIKU-device. As soon as the Deliverer enters the site, the Orderer is entitled to require that the Deliverer’s entire work force be subject to the abovementioned control.
The Deliverer guarantees that the work and materials inherent to the Delivery comply with every aspect of the contracts requirements and that there are no lacks or errors in the structures, materials or work execution.
A warranty period of 24 months comes into force after the product is delivered, counting from the day when the Orderer’s clients take the Delivery into use (in the present case, from when the ship is handed over), with an additional 3 month-period for notifications. The warranty covers all aspects of the Delivery, including any faults and defects caused by errors in the materials, designs and installation. Upon receiving notice of such faults, the Deliverer is to make the necessary amendments at his own cost. If some part is repaired or replaced, the warranty period is extended on that part with 12 months + 3 months-period for notifications. The Deliverer is also responsible for all the costs caused by transportation of the new parts or products to the ship and of all the costs caused by the repair or replacing of the product. An overall time limit of guarantee is 36 months.
Should the Deliverer neglect the aforementioned work, the Orderer is entitled to proceed with such amendments at the Deliverer’s expenses. The Orderer has the same right when he considers that he can no longer wait for the Deliverer’s action in an urgent situation. The Orderer has the obligation to notify the Deliverer before commencing such urgent repairs, when temporally possible.
16.1 The Deliverer’s liability
The Deliverer shall be fully responsible for all damages and losses caused by the Deliverer or its subcontractor to the Orderer or a third party.
16.2 The Orderer’s liability
The Orderer is to be held liable for any damages caused to the Deliverer by his own carelessness or that of his staff, up to 100,000 euros. The Orderer is not liable for indirect damages. The Orderer is liable for any damages caused to third parties, based on any rights currently in force.
16.3 The Deliverer’s insurance obligation
The Deliverer must have a liability insurance for the activity, including product liability, for at least 200% of the contract value. In case of contract values lower than 500,000 euros, the minimum liability needs to be at least 500,000 euros. The insurance is also to cover so called temporarily guarded property. The Deliverer’s responsibility to pay damages is, however, not limited to the value of the liability insurance.
The Deliverer must have an extensive fire insurance and breakage insurance covering the ownership of the object of the commission until its final delivery. The excess is not to exceed 5 % of the object’s value. The Deliverer may have a property insurance covering the Deliverer’s remaining property situated in the yard area.
The Deliverer must have a legally established accident insurance covering the Deliverer’s staff during the times they are located in the yard area.
The Deliverer shall present a certificate issued by the insurance company proving the validity of these insurances when accessing the Orderer’s premises, at the latest.
17. Delayed delivery, penalty
The following penalties apply should the commission be delayed: 2% of the agreed price/commencing week.
18. Security deposits
Should the contract not mention any other terms, the Deliverer is to give a security deposit covering the work period and the warranty period. In case of any advance payments, a security for advance payments is additionally required.
18.1 Security deposit for the work period
The security deposit is to be handed over to the Orderer within 21 days from when the contract is signed, or before any stage payments have been made effective to the Deliverer.
The security deposit is to be in force 3 months past the agreed contract period, or in any case until the commission has been duly received and the security deposit for the warranty period handed over.
The amount of the security deposit for the work period is 10 % of the price of the contract.
18.2 Security deposit for the warranty period
The security deposit for the warranty period is to be given to the Orderer before the last stage payment is made effective, or when the commission has been completed and duly received.
The amount of the security deposit for the warranty period is 5% of the accomplished contract’s price.
18.3 The Orderer’s security deposit
The Orderer is not to hand over any security deposits.