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28.11.2023

NEWS

A production line and its purchase is no joke:
part 2
Conflict of General Contractual Terms – Don't Miss Out!

When it comes to acquiring production lines, machines, and equipment, it’s not just a technical problem. The sale and delivery of these items often rely on the general terms and conditions of sale/delivery (abbreviated as GTC or GTSD) of the seller or manufacturer, which can substitute a written contract.

In some cases, both the seller and the buyer may have their own General Contractual Terms and Conditions (GTC) for the sale or delivery of machinery and equipment. This is particularly common with larger corporate partners. However, the buyer’s GTC may differ from the seller’s GTC, leading to potential conflicts. In such cases, it’s essential to find a mutually acceptable solution.

The first step to effectively constructing a relationship is to examine the sales conditions of the buyer and seller (producer/recipient).

A problem during a transaction can reduce economic efficiency.

In many cases, there arises a conflict between the norms of the General Terms and Conditions (GTC) and Order-Related Documents (ORD) which become contractual obligations between buyers and sellers, i.e., producers and recipients. It can be quite challenging to determine which system of standards, i.e., GTC or ORD, has been effectively implemented in the contract and which general terms and conditions of the sales or delivery contract are ultimately binding. This creates a significant challenge when it comes to deciding which standards have priority in the event of conflicting regulations on the same issues.

Resolving this issue is a challenging and time-consuming process that requires a lot of effort. It’s often a critical step in resolving the underlying problem, whether it involves claims for payment, complaints, or the failure of a production line, machine, or device to meet the technical and operational specifications outlined in the contract.

To put it simply, determining whether a buyer or seller or recipient is entitled to any compensation or remuneration requires resolving the issue of which General Terms and Conditions apply to the sales or delivery contract between the parties involved. This involves understanding the extent to which the buyer/recipient or seller/supplier’s terms and conditions are applicable.

To limit the amount of effort, creativity, energy, time, and money involved in solving dilemmas, it’s crucial to carefully check at the preparation stage of the seller or supplier and buyer or recipient relationship. This means checking whether and what general contractual conditions are applied by the parties involved in the contract, how they introduce them into contractual relations with their contractors, and which ones have priority.

Not considering these circumstances when finalizing a sales or delivery contract can result in serious and expensive mistakes that are difficult to rectify.

For over 30 years, we have been providing protection and legal assistance to sellers and buyers, from the stage preceding the conclusion of the contract, through transport, to the stage of its execution, complaints, withdrawal from the contract, or the stage of pursuing compensation claims in domestic and cross-border cases, also outside the European Union.

Andrzej Mikulski
managing partner I attorney-at-law

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    MIKULSKI & WSPÓLNICY Sp.k.
    "WILLA ANIELA"
    ul. Kielecka 19
    31-523 Kraków