Terms of Trade
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NEW ZEALAND ELECTRICAL & PUMPS LIMITED

TERMS AND CONDITIONS OF CONTRACT FOR THE SUPPLY OF GOODS ANDSERVICES FOR CONSTRUCTION AND MAINTENANCE

APPLICABLE TERMS AND ACCEPTANCE OF ORDER

This agreement binds the parties to the provisions of the Construction Contracts Act 2002 (“the Act”) for Construction and Construction Supply and Services where they apply. The parties cannot contract out of the provisions of the Act.

The parties agree to these terms and conditions of agreement between NEW ZEALAND ELECTRICAL & PUMPS LIMITED (“Contractor”) and the Customer of the premises or Customer of the Contractor (“Customer”) for the supply of electrical, water pump & filtration materials, repair and restoration and  fabrication products and accessories, and all spare parts and all inventory together with all proceeds arising from that property in manufacturing and construction supply  (“Goods”) and design, installation, application and commissioning of Goods or other contracting supplied at an hourly rate or at a quoted fixed cost (“Services”) following written instructions or reasonable oral instructions from the Customer and shall apply to any Contractor quotation or tender or Customer order and any specifications or drawings nominated as forming part of this agreement between the Contractor and Customer and that these terms and conditions shall prevail and take precedence over any written document or oral message from the Customer.

The additional conditions of the Contractor quotation or tender will also form part of this agreement.

In the case of conflict or dispute between the parties these terms and conditions shall prevail. Where the Contractor fails to enforce any of the terms and conditions of this agreement or fails in any way to exercise its rights under this agreement the Contractor will not be deemed to have waived these rights with respect to any term or condition or right.

The Customer and Contractor also acknowledge that these Terms of Trade for construction projects constitute a Security Agreement as defined by the Personal Property Securities Act 1999 (“PPSA”). For the purposes of the PPSA, Collateral shall include all present and after acquired Goods and Goods for which Services have been performed supplied by the Contractor and the proceeds from the sale of all Goods and Services. The Customer also agrees not to allow any person to file a finance statement over any of the Collateral secured by this Security Agreement without the prior written consent of the Contractor.

     

        The Customer agrees to regard employees, sub contractors and agents of the Contractor used in the supply of Services as the property of the Contractor for the term of this contract and the Customer further agrees to pay the full amount of the contract price of any order where the Customer interferes with the Contractor use of its employees, sub contractors or agents or cancels the contract or any order under the contract and rehires the Contractor’s employees, sub contractors or agents to complete the contract or order.

Quotations and Price

The Contractor shall confirm the price of Goods and Services as a quotation or tender listing the description of conditions which will be declared as a sale by description and which shall be valid for thirty (30) days and the Customer shall confirm acceptance by signing the quotation or providing an order for which either or both shall form part of this contract.

No quotation shall constitute an offer unless signed by the Contractor and the Contractor may withdraw any quotation before the Customer’s signed acceptance. The quotation price will be exclusive of GST. Freight, insurance, hire charges and other costs paid by the Contractor on behalf of the Customer shall be the responsibility of the Customer.

The Customer agrees that retentions do not apply to this agreement.

A performance bond to an agreed nominated value may be issued by the Contractors Bank prior to the delivery of Goods or Services.

Variations and Alterations

The quotation or tender price may be increased if the Contractor suffers any cost increases which are beyond its control in the supply, production and delivery of Goods and Services between the date of date of the quotation or tender and the date of delivery, where the Customer varies or alters its requirements for the Goods and Services. Variations and alterations may result from changes to instructions from the Customer requiring a changed basis for the cost of Goods and Services and an extension of time to complete the work OR additional Goods or Services materials or permits. Variations and alterations will be confirmed on a Variation Submittal Form and in accordance with the Act.

Commissioning and Testing Procedure

The Customer accepts that any commissioning, testing or acceptance procedure required by the Customer that has been successfully completed by the Contractor to the Customer’s satisfaction; the Customer will not make any

claim against the Contractor that supply does not meet the Customers requirements with regard to the completion of the order.

Where the Customer does not specify supply for particular parts or accessories the Contractor shall supply the Goods to its own specification or the specification of the original manufacturer including installation procedures appropriate to the type of Goods.

Payment

Payment is to be made by deposit and by progress payments declared in the quotation upon the Contractor submitting a Payments Schedule and Payment Claim in accordance with the Act and final payment is to be made in full without deduction or setoff according to the terms set out in the quotation.

If at any time the Contractor reasonably deems the credit of the Customer to be unsatisfactory, it may require the Customer to provide at the Customer’s cost, security for payment and/or the Contractor may suspend performance of its obligations under this contract until security is provided to the Contractor’s satisfaction and the Contractor may require the Customer to pay all costs incurred as a result of suspension and re-commencement of supply including debt collection and legal costs.

The Customer agrees that the Contractor has sole discretion to apply payments from the Customer to any transaction or Contractor invoice notwithstanding that the Customer may have applied the payment to a particular transaction or invoice.

Interest for Late Payment

If payment is not made in full by the due date the Contractor is entitled to charge the Customer interest on the unpaid overdue balance at the rate of 5% per annum above the current rate charged by the Contractor’s bank calculated from the due date of payment down to the actual date of payment, and the Contractor may at its option suspend work upon giving the Customer five (5) days notice in accordance with the Act and secure any Goods in its possession regardless of the term of this contract until the overdue amounts are paid in full. The Contractor also has the right to adjudication and the Customer and during adjudication and until the decision of the adjudicator may not engage any other person to complete work under the terms and conditions of the Act.

Delivery

Delivery by the Contractor or its agent to the premises of the Customer constitutes delivery of Goods. Delivery of Services for installation or surface preparation or repair as described in the quotation or tender or order shall constitute delivery of Services.

The Customer shall be responsible for the validity of the person accepting the Goods at the premises of the Customer on behalf of the Customer at the time of delivery of Goods or starting Services. Where the Customer has not ensured that its person authorising supply from the Contractor is present, or where the Customer has not rendered the site clear for the Contractor to commence supply without hindrance which shall include the clearance and completion of work by other sub contractors of the Customer, or where the site is not safe under environmental or Health and Safety in Employment Regulations; the Contractor will require the Customer to pay that portion of the contract price which represents the costs incurred by the Contractor in carrying out supply and the Contractor may also charge stand by costs while the Customer renders the site ready.

Where the Customer has arranged for the supply of plans, specifications of materials or permits and the compliance to any by-laws or ordinances by declaration in the quotation it shall be the sole responsibility of the Customer that supply is satisfactory for the purposes they are intended and if the Contractor uses such supply and incurs costs where supply is not fit for purpose or in accordance with engineering, electrical  or building codes, the Customer shall pay the Contractor for all costs incurred by the Contractor complying with the orders of the Customer.

It shall be the sole responsibility of the Customer to define in writing all surface and underground power, gas, water and sewerage utilities at its sites and the Customer further agrees to accept liability for any incorrect supply or damage to property by the Contractor as a result of the Customer’s failure in this regard.

Goods or Services that are finished items but only part of an order may be delivered in instalments at the Contractor’s discretion and in such case each delivery will be regarded as a separate contract and Goods or Services delivered shall be paid by the Customer in accordance with the terms of payment.

The Contractor will make every effort to ensure delivery of Goods and Services on time but will not be liable for any loss or damage or economic or consequential loss to the Customer arising from delays in delivery.

Consumer Guarantees Act 1993

These terms and conditions have the affect of contracting out of the provisions of the Consumer Guarantees Act 1993 to the extent permitted by that Act where the Customer acquires the Goods or Services in a business to business situation (for the business purposes of a business) and all provisions of these terms shall be read as modified to the extent necessary to give effect to that intention.

Contractor Warranty & Liability

The Contractor’s liability in respect of any claim shall relate only to  merchandisable quality meaning specific defects in the Goods and failure of Services arising from faulty manufacture or from damage proven to occur before delivery by the Contractor. The Customer agrees to be responsible for the fitness of the Goods for the purposes required by the Customer and the Contractor shall not be responsible and the warranty will not apply where the Customer fails to ascertain the correctness of the Goods or Services for purposes intended by the Customer.

The warranty on Goods shall be the warranty of the original manufacturer of the Goods which shall be applied by the Contractor.

Where the Contractor accepts liability for damage or defect and elects to repair or replace Goods or Services it shall repair or replace the Goods to their original condition including the value of Services but where materials used in manufacture are not available or where the Contractor has imported Goods for re-sale to the Customer which are not manufactured by the Contractor it may repair or replace by other articles of similar description and value (but can be of a standard type) and such substituted articles shall become subject to the provisions of this Contract.

Claims for Returned, Damaged or Defective Goods or Services

(Customer to the Contractor)

The Contractor may, at its discretion, repair or replace any damaged or defective Goods or Services or make a reasonable allowance on the purchase of goods to replace the Goods provided:

(a) The Customer informs the Contractor within thirty (30) days of delivery or within thirty (30) days of delivery of Services together with a claim specifically identifying the damage or defect(s); and

(b)  The Contractor has reasonable opportunity to investigate the claim.

If the Customer does not comply with the above requirements OR the Customer does not issue its own Payment Schedule in dispute and in good faith (in accordance with the Act) the Customer will be deemed to have accepted the Goods and Services and the Contractor will not incur any further liability whatsoever.

The Customer agrees that claims cannot be considered where:

(a) the damage or failure is due to misuse or negligent care of the Goods while in the possession of the Customer or Customer failure to follow written care instructions and that the Contractor is not liable for damages or loss suffered by the Customers own actions;

       (b) the damage or failure is entirely due to instructions from the Customer regarding the materials or application of materials that are required for the job.

(c) the failure is due to the Customer not complying with national or Local Council laws for the use of the site.

(d) the damage or failure is due to the Customer or a third party attempting to rectify defects or damage.

(e) the defect or failure is due to bad weather and other adverse environmental or other force majeure effects outside the control of the Contractor.

The Contractor has an insurance policy for accidental damage caused to the Customer’s property by the Contractor during the period of supply. In the case of accidental damage the liability of the Contractor shall be limited to the terms of its policy with its insurers with regard to any loss of profits or any consequential, indirect or special loss, damage or injury of any kind whatsoever suffered by the Customer or any other person arising directly or indirectly from any breach of any of the Contractor’s obligations arising under or in connection with the contract including delays in the delivery of Goods or Services or from any cancellation of the contract or from any negligence, misrepresentation or other act or omission on the part of the Contractor, its servants, agents or contractors.

The Contractor shall not be liable for any breach or failure to perform any of its obligations under this contract where such breach or failure is caused by war, civil commotion, hostilities, strike or lock-out, act of God, fire, governmental regulations or directions, or any other cause force majeure beyond the Contractor’s reasonable control. The occurrence of such an event shall not give the Customer a right of cancellation of this contract.

Grounds for Termination by the Contractor

Under the terms of the Construction Contracts Act the Contractor may suspend supply of Goods and Services within five (5) working days of its intent to do so following the Customer’s non payment of a Payment Claim and Payment Schedule and subject to any adjudication resolution under the Act. The Customer is notified that upon the issuing of a suspension notice the Customer cannot engage any other person to complete the job and that the Contractor is entitled to an extension of time to complete work under this contract and that the Contractor also has the right to terminate the contract on written notice to the Customer and the Contractor may enter the location of the Client where the Goods are stored and remove them.

Upon the termination of this contract for any reason, all rights of the Customer granted by this contract shall terminate and the Customer will not be entitled to receive any rebate or refund of the whole or any part of the money paid pursuant to this contract.

Default will also mean, if the Customer:

(a) Shall commit any act of bankruptcy, or enter into any composition or arrangement with creditors.

         (b)     Where the Customer is a Contractor do any act that render it liable to be  liquidated or if a resolution is passed or proceedings commenced for the liquidation of the Contractor or if a Receiver is appointed in respect of all or any assets of the Contractor.

No release from obligations.  Terminations of this agreement shall not relieve the Customer of its obligations to pay all money owed by it to the Contractor on any account whatsoever, which money shall be payable immediately notwithstanding that the date for payment of the money may not have arrived.  Termination of this agreement shall not relieve the Customer from liability arising from any antecedent breach of the terms of this agreement.

Dispute and Arbitration

In the event of any dispute between the Contractor and the Customer arising out of this contract, the arbitration provisions of the Construction Contracts Act 2002 shall apply. Where non payment is because of dispute by the Customer and where the dispute is not notified in writing by the Customer within 20 days after the completion of the supply of Goods or Services under the quotation or tender such dispute shall be heard in accordance with the adjudication procedures of the Act and the outcomes of adjudication are final and legally binding and that the Contractor has the right to suspend supply for non payment of any undisputed part of payment and the Customer agrees that he/she may not engage any other person to complete the job until the decision of the Adjudicator.

The Contractor will provide the Customer of a statement of his/her rights and obligations with any claim for payment from the Contractor and for adjudication under the Construction Contracts Act where disputes may arise.

THE PARTIES AGREE TO THE FOLLOWING TERMS AND CONDITIONS THAT ARE ADDITIONAL TO THE ACT.

Risk, Ownership and Title

Risk of any loss, damage or deterioration of or to the Goods (including the value of Services) shall be borne by the Customer from the time of delivery into the Customer’s care and control and the Customer shall properly insure the Goods from theft, fire or loss damage. Where the Customer fails to insure the Goods upon delivery and suffers loss or damage to the Goods, and where the Goods remain unpaid, the Customer shall agree to pay the Contractor for the full cost of the Goods (including the value of Services).

The Customer agrees that the Contractor has legal and equitable right to title in all and any Goods and value of Services supplied which remain unpaid and ownership shall only pass to the Customer when the contract price is paid.

Where ownership in the Goods and Services is retained by the Contractor the Customer will store the Goods separately and in such a way that they are identifiable as the property of the Contractor.

The effect of this clause may be altered by the issuing of a Charging Order by an Adjudicator’s ruling as a result of adjudication under the Act.

The Customer hereby irrevocably gives the Contractor, its agents or servants, the free and uninterrupted right to enter its premises during normal business hours in accordance with the Act for default of payment by the Customer OR at the option of the Contractor in accordance with the provisions of the PPSA, to search for, inspect and remove any of the Goods supplied in which the Contractor has retained ownership and the Customer will not hold the Contractor responsible for any economic or consequential loss that the Customer may suffer as a result.

If the Goods, (including the value of Services) the subject of this contract, have become the constituent of, mixed with or attached to any other goods or property of the Customer, meaning Goods and Services that are sold by the Contractor, and those goods are used by the Customer for its purposes prior to the Contractor receiving payment, then a portion of the value of those goods or property, attributable to the Contractor’s Goods (and value of Services) shall be the property of the Contractor.

Where the Goods (including the value of Services) have been mixed with or altered with other goods or property of the Customer, the Customer agrees that the Contractor may also possess and sell those goods or property on the open market and secure outstanding monies owed to the Contractor.

Title upon sale of Goods to a Third Party by the Customer

Notwithstanding that property in the Goods and value of Services is retained by the Contractor, the Customer agrees that it cannot sell property or part property in which the Contractor has title to any third party without the written permission of the Contractor and can only negotiate a sale by declaring the Contractor’s reservation and value of title to the third party and receive any proceeds from sale as the fiduciary agent of the Contractor and hold such proceeds in a separate trust account and pay the Contractor for the outstanding monies owed.

The Customer shall also agree to inform its creditors and any Trustee in Bankruptcy or Liquidator of the Customer or any Receiver of the Customer’s business or assets of the right of the Contractor and title to the proceeds of sale and that he Contractor may create and register a Purchase Money Security Interest under the PPSA for any and all Goods (and value of Services) remaining unpaid and that the Customer agrees to waive the right to receive a verification statement for purposes of s.148 of the PPSA.

The Security Agreement is a continuing security and will operate irrespective of any intervening payment or settlement of account until a release has been signed by the Contractor. The security interest granted in the Collateral has the same priority in relation to any and all of the Goods supplied to the Customer at any time.

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