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ICC Model Contract Turnkey Supply of an Industrial Plant

No. #843E

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Turnkey contracts take a range of forms and at present no single model contract covers them all. As part of the suite of model construction contracts, the International Chamber of Commerce (ICC) developed the ICC Model Contract Turnkey Supply of an Industrial Plant. The model contract was designed specifically for turnkey contracts involving the supply of industrial plants or production lines to be erected within facilities which already exist or which are constructed by the purchaser.

The model has special characteristics: The supplier is obliged to supply the equipment and assist the purchaser, and performs these obligations within facilities that are under the purchaser’s control.

This model contract takes account of all of these specifics and contains enough flexibility for the parties to work out special situations for themselves. To leave the greatest possible space to alternative solutions, many issues including raw materials, time schedule, erection equipment, among others, are covered in the annexes.

Each ICC Model Contract includes a fully editable version in Microsoft Word, permitting you to easily adapt the contract to your specific case.

Foreword ...9 

INTRODUCTION 

  1. The turnkey contract considered in this model ...10 
  2. The drafting techniques used ...11 
  3. The entry into force of the contract ...11 
  4. Shipment of the equipment ...12 
  5. The various stages of performance of the contract ...13 
  6. Contract price and payment conditions ...14 
  7. Non-performance and its consequences ...14 
  8. Force majeure ...15 
  9. Applicable law ...15 
  10. Local rules relevant for the performance of the contract ...16 
  11. Jurisdiction and arbitration ...17 

ICC MODEL CONTRACT FOR THE TURNKEY SUPPLY OF AN INDUSTRIAL PLANT 

CHAPTER 1: GENERAL CLAUSES 

  1. Definitions ...20 
  2. Good faith and fair dealing ...22
  3. Entry into force of the Contract ...22 
  4. Subject matter and scope of the Contract ...23 
  5. Alternatives and additional work ...24 
  6. Assignment - Subcontractors - Parties' representatives ...25 
  7. Time schedules and co-operation ...25 

CHAPTER 2: SUPPLY OF TECHNICAL DOCUMENTATION, EQUIPMENT AND SPARE PARTS 

        8. Layout ...27 

        9. Technical documentation ...27 

        10. Supply of the equipment ...28 

        11. Shipment - Packing - Marking ...28 

        12. Taking delivery of the equipment ...28 

        13. Spare parts, raw materials and components ...29 

CHAPTER 3: ERECTION, TESTING, TAKING OVER AND TRAINING 

        14. Obligations of the Parties ...30 

        15. Management of the site ...30 

        16. Supplier's personnel ...31 

        17. Travel and lodging expenses of supplier's personnel ...31 

        18. Erection ...32 

        19. Erection testing ...32 

        20. Erection Certificate ...33 

        21. Start up of the plant ...33 

        22. Performance testing ...34 

        23. Taking over ...35 

        24. Training of purchaser's personnel ...36 

CHAPTER 4: PRICE, PAYMENT CONDITIONS, BANK GUARANTEES

        25. Contract price ...37 

        26. Payment conditions ...37 

        27. Bank guarantees provided by the supplier ...38 

        28. Taxes, duties, etc. ...39 

CHAPTER 5: NON PERFORMANCE AND ITS CONSEQUENCES 

        29. Consequences of non-performance - Liquidated damages ...40 

        30. Contract termination...41 

        31. Defects in the plant after taking over ...42 

        32. Limitation of liability ...44 

CHAPTER 6: FINAL CLAUSES 

        33. Force majeure ...45 

        34. Confidentiality ...47 

        35. Contract documents ...48 

        36. Applicable law ...49 

        37. Resolution of disputes ...49 

CONTRACT SCHEDULES: SPECIFIC ISSUES TO BE DETERMINED BY THE PARTIES 

        Contract Schedule A - Definition of the site ...52 

        Contract Schedule B - Events to occur before the commencement date (Article 3.2) ...53 

        Contract Schedule C - Contract termination before effectiveness (Article 3.3) ...54 

        Contract Schedule D - Information needed for preparing the layout of the plant (Article 8.1) ...55

        Contract Schedule E - Shipment of Equipment - Marking - Packing list and other documents ...56 

        Contract Schedule F - Price of the Contract (Article 25) ...57 

        Contract Schedule G - Payment conditions (Article 26) ...58 

        Contract Schedule H - Bank guarantees provided by the supplier (Article 27) ...59 

        Contract Schedule I - Liquidated damages for delay (ARticle 29) ...60 

ANNEXES 

  1. General description of the plant, guaranteed performance and minimum performance levels ...61 
  2. Equipment and other goods to be provided by the supplier ...63 
  3. Main sub-contractoes and sub-suppliers (Article 6.2) ...64 
  4. Technical documentation to be provided by the supplier (Article 9) ...65 
  5. Time schedule ...66 
  6. Raw materials, components and consumables ...67 
  7. Technical personnel provided by supplier for supervision and assistance (Article 16) ...68 
  8. Erection equipment (specification)/Specialised personnel provided by purchaser ...69 
  9. Performance test procedures - Price reduction in case of non-attainment of the guaranteed performance ...71 
  10. Training of purchaser's personnel (Article 24) ...72 
  11. Taking over certificate ...73 
  12. Transfer of technology (know-how) license ...74 
APPENDICES 
Appendix I - United Nations Convention on the International Sales of Goods ...75 
Appendix II - Unidroit Principles of International Commercial Contracts ...101 
ICC at a glance ...117 
Selected ICC publications ...118 

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