General purchasing conditions

1,1 These General Purchasing Conditions apply on any and all
agreements for delivery of goods to CGS and/or any company in
CGS Group and to any other legal relationship between the Supplier
and CGS and/or any company in CGS Group.
1.2 These General Purchasing Conditions have been prepared in
accordance with Act No. 89/2012 Coll., the Civil Code (hereinafter
referred to as the “CC”).
2.1 In the Purchase Agreement the following definitions shall have
the meaning set out below.
2.2 “CGS” means ČGS a.s, ID No. 27410072 with its registered
office in Prague 10, Švehlova 1900, Postal Code 106 24, Czech
Republic and its sister companies (f.i. MITAS a.s. ID No. 00012190,
RUBENA a.s. ID No. 00012131, Mitas d.o.o. ID No. (08250600),
Mitas Tires North America, Inc., ID No. 13-4103544, CGS Tyres Ltd.,
ID No. C37049) mutually owned by CGS HOLDING a.s., ID No.
24811742 or its any future successor. All companies under direct or
indirect control by CGS HOLDING a.s. are cited further as CGS
2.3 “Defective Goods” means any Goods not meeting the
requirements set out in Section 11.1 of these General Purchasing
Conditions, in the Purchase Agreement or in any additional terms
agreed between the Supplier and CGS.
2.4 “Delivery Plan” is a document, whether in electronic form or on
paper, that set out the quantities and delivery dates and other
delivery information for Goods that CGS expects to request delivery
of within a certain period of time.
2.5 “Goods” means raw materials, parts, systems or components
that CGS orders and the Supplier supplies to CGS.
2.6 “Intellectual Property Rights” means trademarks, patents,
copyrights, know-how, trade secrets, and Industrial design rights.
2.7 “Order” is a document, in paper or electronic form, issued by
CGS to the Supplier for the purchase of the Goods.
2.8 “Party” or “Parties” means the parties to the Purchase
2.9 “Product” means the product in which Goods is, or is intended to
be, incorporated.
2.10 “Purchase Agreement” is an agreement between CGS and the
Supplier for the purchase by CGS of Goods from the Supplier
entered into in accordance with Section 3.1 of these General
Purchase Conditions.
2.11 “Recall Campaign” means any activity CGS initiates on
Products in order to address quality or safety issues, compliance with
legal requirements or customer concerns. Recall Campaign includes
but is not limited to product recalls and service campaigns.
2.12 “Supplier” means the party to a Purchase Agreement that
supplies, or is intended to supply Goods to CGS.
2.13 “Technical Specifications“ means documentation provided or
referred to by CGS which describes the Goods material content,
shape, function and/or any other requirement on the Goods.
2.14 Terms defined in these General Purchasing Conditions shall
have the same meaning in all documents being part of the Purchase
Agreement, unless the context expressly provides otherwise.
3.1 A Purchase Agreement is concluded between CGS and the
Supplier when CGS has issued an Order to the Supplier and the
Supplier has accepted such Order. The Supplier shall be deemed to
have accepted the Order at the earlier of (i) the Supplier notifying
CGS of its acceptance or (ii) the Supplier beginning performance
pursuant to the Order. The Order is not binding and is revocable until
the moment of its acceptance.
3.2 CGS accepts no liability for orders for Goods that have not been
placed in accordance with this Section 3.
3.3 An Order incorporates these General Purchasing Conditions
3.4 A Purchase Agreement includes, to the extent that they are
issued, the following documents:
a) Framework Purchase Agreement (which shall prevail over
these General Purchasing Conditions)
b) These General Purchasing
c) Order
d) Technical Specifications
e) Price Agreement
f) Delivery Plan according to Section 7.1
g) Payment terms
h) Other agreed documents.
With respect to such documents, a subsequently issued document
shall prevail over a previously issued one.
3.5 In the event of a conflict between the documents which constitute
a part of the Purchase Agreement, the documents shall apply in the
order they are mentioned in Section 3.4 unless otherwise expressly
agreed in a specific document.
3.6 CGS may refuse to be bound by the Purchase Agreement if
when entering into the Purchase Agreement or amendments to the
Purchase Agreement the Supplier makes any changes, amendments
or deviations in the Purchase Agreement or amendment to the
Purchase Agreement or in any other related arrangement that even
insignificantly change the conditions of the Purchase Agreement as
agreed with CGS and that are not confirmed by CGS in writing.
3.7 CGS is not bound by a confirmation letter of the Supplier within
the meaning of Section 1757 of the CC that even insignificantly
changes the content of the Purchase Agreement entered into, unless
expressly accepted by CGS in written.
4.1 The Supplier shall on a regular basis provide CGS with such
information that may be of importance for CGS in order to evaluate
the relationship with the Supplier and/or such information that CGS
reasonably may request, included but not limited to any information
about the Goods and/or the Supplier that may be needed to provide
authorities with for the import or export of the Goods.
4.2 If the Supplier is declared bankrupt, enters into liquidation or for
any other reason can be assumed to have become insolvent, the
Supplier shall immediately inform CGS thereof.
5.1 The Supplier shall supply Goods in accordance with the
Technical Specifications and terms of the Purchase Agreement.
5.2 CGS reserves the right to modify the Technical Specifications of
the Goods. Any change in price or other conditions resulting from this
shall be agreed upon in writing prior to the commencement of
delivery by the Supplier.
6.1 CGS normally issues Delivery Plan(s) for the delivery of the
Goods. The Delivery Plans set out the quantities and delivery dates
for the Goods that CGS expects to request delivery of within a
certain period of time. Firm requests for delivery of the Goods,
including the fixing of the exact quantity and delivery time, is made
either as part of the Delivery Plan or in the Order. Only what CGS
explicitly has stated, in writing issued to the Supplier prior to the
delivery in question, to be a firm request for delivery shall be deemed
to be a firm request for delivery.
6.2 Any quantity included in the Delivery Plan that exceeds what is a
firm request for delivery of the Goods shall be considered a forecast
only and shall not be binding on CGS. However, the Supplier is
obliged to maintain such production and delivery capacity so that
deliveries can be made in accordance with the forecast quantity in
the Delivery Plan.
6.3 The Supplier shall immediately inform CGS if there is a risk of
non compliance with the most recent Delivery Plan issued by CGS.
Recognizing that time is of the essence, the Supplier will take all
necessary actions to ensure timely deliveries.
6.4 If the Supplier is unable to meet CGS’s need for the Goods, the
Supplier shall find alternative supplies for CGS in consultation with
CGS on his expenses. Actual procurement from the alternative
supplier is subject to CGS’s final written approval.
7.1 The price for the Goods is stated in the Order and shall apply
until the Parties agree on a new price in writing. Unless otherwise
agreed in writing, the price stated for any Goods shall be a fixed
price, inclusive of all duties, levies, fees and taxes.
7.2 The Supplier shall during the term of the Purchase Agreement
provide CGS with the Goods that are competitive in terms of price,
quality, delivery and technical parameters. If CGS considers that the
Supplier’s delivery of the Goods is no longer competitive in relation to
price, quality, delivery and/or technical function of the Goods, CGS
shall supply the Supplier with information supporting its belief. The
Supplier and CGS shall in good faith discuss how to make the Goods
7.3 Payment shall be made according to the CGS Order. All invoices
shall be correctly addressed, comply with the requirements of Act
No. 235/2004 Coll., on Value Added Tax, as amended and include all
other information that is required by CGS. CGS may return the
invoice if it does not comply with the requirements of the cited law or
if it contains inaccurate data; in such case the invoice will be
regarded as not issued.
7.4 Remittance of payment shall not imply any acceptance of the
delivery or of the invoiced amount.
7.5 Without prejudice to CGS’s other rights and remedies CGS may
deduct from any payments due to the Supplier the amount of any
bona fide contra accounts or other claims which CGS may have
against the Supplier.
7.6 The price for the Goods shall be the same for all entities within
the CGS Group of Companies.
7.7 CGS reserves the right to suspend settlement of the specific invoice
connected with the claimed Goods until such claim is settled to the
satisfaction of CGS
7.8 Unless agreed otherwise in the Purchase Agreement, the basic
payment condition is 60 days from the date of goods´ delivery to
8.1 The agreed delivery term shall be construed in accordance with
Unless otherwise agreed, the delivery clause shall be "DAP" with
place specified in the Order.
8.2 The Supplier shall pack the Goods in accordance with
instructions issued by CGS. In case CGS did not provide any
instruction, the Supplier shall pack the Goods in the common way of
packing for this specific type of Goods, which shall guarantee its full
protection during the transportation, stocking and manipulation.
8.3 Unless otherwise set out in the Order, title in the Goods will pass
to CGS upon delivery to the delivery location designated in the
9.1 The Supplier warrants for a period stipulated in the mutually
agreed specification (two years that starts from the date of handing
over of the Goods or the Product to the end-user if the specification
is not mutually agreed), that all Goods delivered under the Purchase
(i) shall conform to the Technical Specifications and to any samples
approved by CGS; and
(ii) shall be free from defects in title, materials, workmanship,
manufacture and
(iii) shall be fit and sufficient for its intended use.
The Supplier agrees to waive the time limitation to which the
foregoing warranties are subject in the event that after the applicable
warranty period has expired
(a) defects of the same or similar nature have been discovered in a
statistically significant portion of the Goods,
(b) defect is discovered which may cause or has caused or is alleged
by a third party to may cause or has caused damage or poses a
significant threat of damage to property or to the health or safety of
any person or
(c) CGS anywhere in the world is obliged to perform a Recall
Campaign involving the repair or replacement of the Products.
9.2 The Supplier shall ensure it has obtained all information on the
intended use of, application of and other conditions affecting the
Goods. CGS shall upon request from the Supplier provide all
information, which CGS in its sole discretion deems relevant for the
development and/or manufacturing of the Goods.
9.3 CGS’s personnel may from time to time render assistance and/or
give suggestions and/or opinions to, or affect an exchange of
information with the Supplier’s personnel concerning the Goods to be
furnished under an Order („Assistance”). CGS is not obliged to
provide such Assistance and the provision by CGS of such
Assistance shall not create any liability for CGS and shall not in any
way limit the Supplier’s liability to fully perform its obligations under
the Purchase Agreement. Moreover any Assistance provided by
CGS shall neither grant the Supplier authority to change any
provisions of an Order or the Purchase Agreement, nor shall any
Assistance constitute a change binding upon CGS unless issued as
an amendment in accordance with the Purchase Agreement. In all
cases and as acknowledged by the Supplier, CGS is relying upon the
Supplier's knowledge and expertise in performing all work regarding
the Goods to be furnished under an Order.
10.1 In the event the Goods do not fulfill the requirements set out in
these General Purchasing Conditions, in the Purchase Agreement or
in any additional terms agreed between the Supplier and CGS
(“Defective Goods”), then CGS shall be entitled to (up to its option) (i)
demand immediate rectification, or (ii) demand immediate delivery of
substitute Goods, or (iii) request an appropriate discount from the
10.2 If Defective Goods cannot be repaired or replaced without delay
or if there is a risk of production disturbances at CGS or delivery
disturbances from CGS, CGS shall be entitled, without obtaining the
Supplier's consent and at the latter's expense, (i) to make the
necessary repair work (by itself or by third party) or completely or (ii)
partly terminate the purchase of the Goods and other such Goods
that CGS does not consider having any use of due to the defect or
shortcoming and to undertake substitute purchases from other
10.3 In addition to what is set forth in Sections 10.1 and 10.2 above,
the Supplier shall compensate CGS for any loss or damage arising
out of or relating to the Defective Goods including but not limited to
costs (including reasonable attorney’s and expert’s fees) for any
Recall Campaign, labour, replacement, assembly and disassembly,
detection and analyze, scrapping and transportation to CGS and/or
its end-users.
10.4 If due to a delivery of the Defective goods CGS considers it
necessary to inspect all the Goods of the same kind delivered by the
Supplier, CGS shall be entitled, after giving the Supplier notice
thereof, to make such inspection at the latter's expense and without
awaiting the latter's approval. The notice shall describe the nature of
the defect as well as the time and place of the inspection. If possible,
the Supplier shall be present at the inspection.
10.5 In the event that a delivery does not contain the quantity
specified in the Order, CGS shall be entitled to demand immediate
rectification and the Supplier shall compensate CGS for all costs,
arising out of or relating to the delay or shortfall in delivery. If the
Supplier delivers a quantity either in excess of CGS’s ordered
quantity or earlier than the delivery date, CGS shall not be
responsible for taking delivery of, storing or maintaining such Goods
and shall further be entitled to return any excess or prematurely
delivered quantity to the Supplier at the latter's expense and/or
receive compensation from the Supplier for storage costs.
10.6 If CGS accepts the Goods that do not conform to the terms of
the Purchase Agreement this will not relieve the Supplier of its
obligations to correct any such non conformance or preclude CGS
from any remedy under the Purchase Agreement.
10.7 In the event of a late delivery of the Goods, CGS is entitled to (i)
completely or partly terminate the purchase of the Goods and of
other Goods which CGS does not consider having any use of due to
the late delivery, and (ii) make substitute purchases from other
suppliers. The Supplier shall indemnify CGS against, and hold CGS
harmless from any costs, losses and damages incurred or arising out
of or relating to the late delivery.
10.8. If, at any time, CGS determines to carry out a Recall Campaign
in order to replace or repair the Products having a defect which could
possibly affect the safety or reliability of the Product, Supplier shall
provide CGS, with utmost urgency, with the Goods required to
perform the Recall Campaign, at no extra charge or burden for CGS
and without suspending or postponing the delivery of the regular
supply of the Goods, and reimburse CGS all reasonable costs for the
purchase, handling, packaging, shipping and transport of defective
Products to be replaced, as well as costs for the operations required
to replace and/or repair defective Products, together with any other
costs incurred in connection with the carrying out of the Recall
10.9 Supplier hereby explicitly assures CGS that in the moment of its
delivery the Goods is free of any defects and therefore it do not fall
under the definition of Defective Goods.
11.1 The Supplier shall in respect of development and production of
the Goods comply with the applicable requirements of a quality
system approved by CGS.
11.2 The Supplier shall always strive to improve the production
process. CGS shall be entitled, after reasonable notification, to
inspect the Supplier's production, perform tests and make other
necessary examinations at the Supplier's premises, including
evaluating any risks for interruption in the supply of the Goods as
well as safety related issues. The Supplier shall endeavor to obtain
the same rights for CGS at the premises of its suppliers. CGS shall
give the Supplier at least one week notice about such inspection.
12.1 The Supplier shall perform quality control of samples in
accordance with CGS’s applicable requirements relating to testing
from time to time.
12.2 Once a sample has been approved, alteration of the
characteristics, material, production method, place of manufacture,
which may affect the Goods, may be done only after written approval
on each occasion from the responsible department at CGS. Delivery
may thereafter be made only after renewed approval of a sample.
12.3 If CGS rejects a sample, the Supplier shall make rectification so
that the requirements referred to in Section 10.1 are fulfilled and
reimburse CGS’s costs for verification testing of the Goods after such
12.4 CGS’s approval of samples shall not affect the Supplier's
liability and obligations in accordance with the Purchase Agreement.
13.1 The Supplier shall defend, indemnify and hold CGS harmless
from and against any and all loss, liability, cost and expense
(including reasonable attorney’s and expert’s fees) arising out of a
claim based on product liability or claim that a defect in Goods and/or
manufacturing processes or techniques of Goods caused personal
injury or loss of, destruction or damage to property. This agreement
of indemnification includes the Supplier’s responsibility for all
judgments or settlement amounts which may otherwise be or
become the responsibility of CGS. This agreement of indemnification
shall inure to the benefit of CGS, its officers, directors, CGS
subsidiaries, successors and assigns. The Supplier shall, at CGS’s
request, assist CGS in disputes in which CGS could become
involved by reason of such alleged defects and if required by CGS
take on the conduct of any dispute.
13.2 Neither CGS nor the Supplier will file cross-claims or third party
complaints against the other in product liability litigation without
notifying the other Party in advance. Where practicable, notice
should be given sufficiently in advance to allow thorough discussion
of alternatives to such filing.
13.3 If there is a risk of a Product causing personal injury or property
damage due to the Goods being Defective Goods, such that CGS
decides to perform a Recall Campaign, the Supplier shall
compensate CGS for its costs in conjunction with such Recall
Campaign, including but not limited to costs (including reasonable
attorney’s and expert’s fees) for labour, replacement, assembly and
disassembly, detection and analyze, scrapping and transportation to
CGS and/or its end-users.
13.4 The Supplier shall enter into and maintain an adequate product
liability insurance policy during the period of the Purchase
Agreement and shall at CGS’s request also supply CGS with a copy
of the insurance certificate.
14.1 In addition to the Supplier’s liability for any defects, delays and
product liability under the Purchase Agreement, a Party shall
compensate the other Party for any loss or damage suffered as a
result of a breach of the Purchase Agreement.
14.2 If a Party fails to comply in any material respect with its
obligations under the Purchase Agreement and does not undertake
complete rectification within thirty (30) days after a written notice to
that effect, the other Party shall be entitled to terminate the Purchase
Agreement with immediate effect and receive compensation in
accordance with the provisions of the Purchase Agreement.
15.1 “Force Majeure” shall mean all events which are beyond the
control of the Parties, and which are unforeseen, unavoidable or
insurmountable, and which were not known at the acceptance of an
Order and which prevent total or partial performance by either Party.
Such events shall include earthquakes, typhoons, flood, war,
epidemics, civil disturbances, and any other event which cannot be
foreseen, prevented or controlled. For the avoidance of doubt,
strikes, lock-outs or other industrial action or disputes solely related
to the Supplier and/or its subcontractors or agents shall not be
deemed as events of Force Majeure.
15.2 If an event of Force Majeure occurs, a Party’s contractual
obligations affected by such an event shall be suspended during the
period of delay caused by the Force Majeure and the period for
performing such obligations shall be extended, without penalty, for a
period equal to such sus- pension.
15.3 The Party claiming Force Majeure shall promptly inform the
other Parties in writing and shall furnish within ten (10) days
thereafter evidence of the occurrence and expected duration of such
Force Majeure.
15.4 In the event of Force Majeure, the Parties shall immediately
consult with each other in order to find an equitable solution and shall
use all reasonable endeavors to minimize the consequences of such
Force Majeure. If the consequences of the Force Majeure event
continue for a period of thirty (30) days without a solution acceptable
to both Parties, the Party that is not subject to Force Majeure shall be
entitled to immediately terminate the relevant Purchase Agreement.
Each Party shall comply with all laws and regulations relevant to the
performance under the Purchase Agreement. This will include but
not be limited to the Supplier’s obligation to treat dangerous goods in
accordance with all applicable laws and regulations.
17.1 If Goods, or component therein, which the Supplier delivers to
CGS is subject to national export or control regulations in those
countries where the Supplier produces the Goods or those countries
from which the Goods originate, the Supplier shall be obliged, prior to
the Parties agreeing on the Technical Specification, to notify CGS in
writing thereof and of the scope of the export restrictions.
17.2 The Supplier shall be obliged to deliver all assistance,
information or certificates needed by CGS for custom clearance for
any Goods, which the Supplier delivers to CGS.
17.3. In case those Goods contain raw material under REACH
obligation, the Supplier is obliged to indicate the REACH preregistration
No. on the delivery note accompanying Goods. Should
Supplier fail to provide CGS with the documents evidencing REACH
pre-registration, CGS reserves the right to reject Goods at the final
place of destination and return Goods at Supplier’s costs.
17.4. The Supplier is obliged to provide CGS with the up-to-date
safety sheets.
18.1 All information and technical documentation, including
electronically stored data, to which a Party has obtained access
through the Parties’ business relationship, shall for the duration of
the Purchase Agreement and for three (3) years thereafter be treated
as confidential and may not be used for any purpose other than for
the deliveries to CGS. The information may not be shown to or in any
other way communicated to or used by others than such personnel of
either of the Parties that are directly involved in the implementation of
the deliveries to CGS. Copying or reproduction of such confidential
information is permitted only within the framework of the fulfillment of
a Party's obligations and with regard to the applicable laws and
regulations. However, the confidentiality undertaking outlined above
shall not apply to information which is (i) known to the public other
than by breach of the Purchase Agreement, (ii) information that a
Party can prove to be in its possession before receiving it from the
other Party, and (iii) information that a Party receive from a third
party without restraints as to the disclosure thereof.
18.2 Information which a Party is required to disclose by reason of
law or order of a court of a competent jurisdiction may however be
disclosed for such purpose. The Party requested to disclose such
information shall beforehand notify the other Party of any such
requirement and consult with the other Party regarding the manner of
such disclosure. The Party disclosing information pursuant to this
Section shall, as far as is legally possible, require the receiver of the
information to treat it confidential as required in Section 18.1.
18.3 The Supplier may not make public the business relationship of
the Parties through advertising or in any other way without prior
written consent from CGS.
18.4 The Supplier shall at CGS’s request either return or destroy
everything referred to in Section 18.1, including copies thereof.
No waiver by either Party of any breach of the Purchase Agreement
shall be considered a waiver of any subsequent breach of the same
or any other provision. Notwithstanding the generality of the
foregoing, any failure by CGS to answer a question or
communication from the Supplier about a delayed delivery shall not
affect CGS’s right to impose a sanction in accordance with the
Purchase Agreement.
20.1 If any provision of these General Purchasing Conditions or the
Purchase Agreement is found to be or later becomes invalid,
ineffective or unenforceable, such provision will be considered as
severable from the remainder of these General Purchasing
Conditions or the Purchase Agreement and shall not affect the
validity, effectiveness or enforceability of these General Purchasing
Conditions or the Purchase Agreement as a whole. In such a case
the Parties shall replace such invalid, ineffective or unenforceable
provision with such other provisions as will be in accordance with the
purpose of the Purchase Agreement and the will of the Parties
expressed in the execution of the Purchase Agreements within five
working days upon a request by CGS.
A Party may neither transfer nor assign its rights or obligations under
the Purchase Agreement without the written consent of the other
Party. CGS may however transfer or assign such rights or obligations
to any CGS subsidiary without consent.
22.1 Unless agreed otherwise the Purchase Agreement shall be valid
for an indefinite period of time.
22.2 The Purchase Agreement may be terminated by either Party by
written notice to expire three (3) months from receipt of the
termination notice.
22.3 In addition to the above, a Party is entitled to terminate the
Purchase Agreement with immediate effect and without any liability
for compensation due to such termination if: the other Party is
declared bankrupt, enters into liquidation or for any other reason can
be assumed to have become insolvent; or the other Party is acquired
by a competitor of the Party seeking termination.
Any amendment to the Purchase Agreement shall be made in writing
and signed by authorized representatives of both Parties.
Should the General Purchasing Conditions or a Purchase Agreement
be translated into another language than English, the English version
shall prevail in case of inconsistency.
All disputes arising from the Purchase Agreement and in connection
with it shall be finally decided with the Arbitration Court attached to
the Economic Chamber of the Czech Republic and Agricultural
Chamber of the Czech Republic by three arbitrators in accordance
with the Rules of that Arbitration Court.
The laws of the Czech Republic, excluding its conflict of law
provisions, shall exclusively apply, unless otherwise agreed to in
writing. The application of laws on the international sale of goods,
especially the Convention of the United Nations of 11.04.1980 on
Contracts regarding the International Sale of Goods (CISG) is hereby
The Parties have expressly agreed that the provisions of Section
1740 Para. 3 CC, Section 1799 CC and Section 1800 CC shall not
apply to Purchase Agreement and the rights and obligations arising
herefrom. The Supplier declares and confirms that it does not feel or
consider itself to be a weaker contracting party in comparison with
CGS, and it had the opportunity to be familiarized with the text
hereof, understood the content hereof and intends to be bound
thereby and that contractual provisions are properly discussed with
CGS. The Parties have agreed and confirm by signature that any
change of circumstances or either Party’s impossibility of
performance shall not constitute a valid reason for termination of the
Purchase Agreement. The Supplier assumes the risk of changes to
circumstances in accordance with the provision of Section 1765 CC.