Sales & Purchase Conditions

Sales and purchase conditions for industrial chemicals are essential for ensuring smooth transactions, managing risks, and protecting both parties (buyers and sellers) in a business agreement. These conditions govern the sale of chemicals, including terms related to pricing, delivery, quality, and liability. Below is an outline of key sales and purchase conditions typically included in industrial chemical transactions:

1. General Terms and Conditions

  • Parties Involved: Clearly define the seller and buyer’s names and legal entities.
  • Product Description: Detail the chemicals being sold, including product names, specifications, and grades (e.g., purity, chemical composition).
  • Quantity: State the quantity of chemicals to be purchased, including unit measurements (e.g., kilograms, liters, tons), as well as packaging details (e.g., drums, containers).
  • Unit Price: Specify the price per unit, which may depend on the quantity, delivery terms, and applicable taxes or duties.

2. Pricing and Payment Terms

  • Price Determination: Clarify whether the price is fixed or variable (e.g., based on market fluctuations for raw materials, energy costs, or exchange rates).
  • Payment Method: Specify the acceptable methods of payment (e.g., bank transfer, letter of credit, cash).
  • Payment Terms:
    • Prepayment: Payment in advance, commonly used for new customers or high-risk transactions.
    • Net Terms: Payment due within a specified period (e.g., 30 days, 60 days from invoice).
    • Installments: Payment in parts, possibly tied to milestones or shipments.
  • Currency: State the currency in which the payment should be made (e.g., USD, EUR).
  • Late Payment Penalties: Outline the consequences of delayed payments, such as interest charges or additional fees.

3. Delivery Terms

  • Delivery Method: Specify how the chemicals will be delivered (e.g., by road, rail, air, or sea).
  • Incoterms: Use standardized Incoterms (International Commercial Terms) to define responsibility for delivery, risk, and cost allocation between buyer and seller. Examples include:
    • EXW (Ex Works): Seller delivers goods at their premises, and the buyer assumes all costs and risks from that point onward.
    • FOB (Free on Board): Seller delivers goods on board a vessel, with responsibility for costs and risks shifting to the buyer once goods are shipped.
    • CIF (Cost, Insurance, and Freight): Seller is responsible for shipping costs, insurance, and freight up to the buyer’s port.
  • Delivery Time: Define the expected delivery time frame (e.g., within 10 business days after receiving the order).
  • Delivery Location: Specify the delivery point (e.g., buyer’s facility, port, warehouse).
  • Risk of Loss or Damage: Identify when the risk transfers from the seller to the buyer, usually linked to delivery terms.

4. Inspection and Quality Control

  • Product Quality: Specify the chemical grade, purity, and any other critical quality parameters. The quality should align with agreed-upon standards and certifications (e.g., ISO, REACH).
  • Inspection Rights: Allow the buyer to inspect the goods upon delivery and confirm compliance with the contract (e.g., via sampling or lab analysis).
  • Testing: Define whether the seller provides testing certificates (e.g., Certificate of Analysis (CoA)) that verify the chemical’s compliance with product specifications.
  • Rejection: Outline the buyer’s right to reject goods if they do not meet the agreed specifications, as well as the process for returns, exchanges, or refunds.

5. Shipping and Handling

  • Packaging: Specify the packaging type (e.g., drums, bottles, bulk bags) and requirements for safe handling, including labeling for hazardous chemicals, if applicable.
  • Shipping Costs: Define who bears the cost of shipping, insurance, and handling fees (e.g., seller, buyer, or shared).
  • Customs and Import Duties: Address responsibility for clearing goods through customs and covering any related duties or taxes, especially in international transactions.

6. Risk and Liability

  • Force Majeure: Specify force majeure clauses that protect both parties from events beyond their control (e.g., natural disasters, labor strikes, or government restrictions).
  • Liability for Damage: Define who is liable for any damage or loss caused during production, transit, or storage of the chemicals.
  • Indemnification: Outline indemnification provisions where one party agrees to compensate the other for any losses incurred due to non-compliance or negligence.

7. Regulatory Compliance

  • Legal and Regulatory Requirements: Specify that the chemicals must comply with local, national, and international regulatory standards (e.g., REACH, OSHA, EPA, or FDA for pharmaceutical-grade chemicals).
  • Safety and Handling: Ensure compliance with safety regulations, including providing Material Safety Data Sheets (MSDS) or Safety Data Sheets (SDS) for hazardous chemicals.
  • Export and Import Restrictions: State that the buyer must comply with export and import laws for cross-border transactions, including any required permits.

8. Warranties and Guarantees

  • Product Warranty: The seller may provide a warranty that the chemicals meet the agreed specifications and are free from defects.
  • Limitations: Define the scope and limits of the warranty (e.g., duration of warranty, exclusions for misuse or improper handling by the buyer).
  • Guarantee of Origin: Guarantee that the chemicals are of a specified origin (e.g., sourced from a certified supplier or manufacturer).

9. Returns and Refunds

  • Return Policy: Establish the conditions under which returned chemicals will be accepted, such as if the chemicals are defective or not in compliance with specifications.
  • Restocking Fees: Define any fees associated with returning goods, particularly for non-defective products or canceled orders.
  • Refund Process: Outline the process for issuing refunds or credit for returned goods, including any required documentation (e.g., proof of damage, inspection results).

10. Dispute Resolution and Governing Law

  • Dispute Resolution Mechanism: Specify the method for resolving disputes, such as arbitration, mediation, or court proceedings, and where these should occur (e.g., jurisdiction and venue).
  • Governing Law: Define the jurisdiction and the law that governs the agreement (e.g., local or international laws, depending on the parties’ locations).

11. Confidentiality and Non-Disclosure

  • Confidential Information: If necessary, outline any confidentiality agreements, especially if proprietary formulas, processes, or intellectual property are shared between the parties.
  • Non-Disclosure: Establish terms that protect sensitive business information from being disclosed or misused by either party.