Terms of Sale

1.                Definitions and Interpretation

1.1           In the Agreement (as hereinafter defined) unless the context otherwise requires:

1.1.1          “Affiliate” means a company or other legal entity which directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with a party. For this purpose “control” means the direct or indirect ownership of fifty per cent or more of the voting rights attached to the issued share capital of such company or other legal entity;

1.1.2          “Agreement” means these Terms of Sale together with the MLSA (where applicable) and the Order Confirmation(s);

1.1.3          “Banking Day” means a day when the banks in the banking system of the currency in which the price is payable and in the country where payment is due to be made are open for the transaction of normal banking business;

1.1.4           “Berth” means a berth, dock, wharf, anchorage, submarine line, single point or single berth mooring facility, offshore location, alongside vessels or barges or any other place for delivery of the Marine Lubricants;

1.1.5          “Business Day” unless the Agreement expressly provides to the contrary means a day when banks are open for normal business in London, United Kingdom. Where the last day for any notice to be given under the Agreement falls on a day which is not a Business Day, such notice shall be given (by not later than the specified time, where applicable) on the last preceding Business Day;

1.1.6           “Component” means any crude oil, petroleum products or additives from which the Marine Lubricants would primarily be manufactured in accordance with the general practices of the petroleum industry;

1.1.7          “Confidential Information” means: (a) the Agreement; (b) all information concerning the Agreement and its performance or non-performance; and (c) the business and affairs of each other Party and/or its Affiliates that the receiving Party may have obtained or received as a result of the discussions leading up to or entering into or the performance of the Agreement;

1.1.8          “Delivery Vehicle” means the barge, coastal tanker or other vehicle used by the Seller or the Physical Supplier to effect delivery or to transport the Marine Lubricants to the place of delivery and includes all hoses or other equipment of such vehicle of the Seller or Physical Supplier;

1.1.9          “Directory” means the Seller’s Marine Lubricants International Port Directory, as amended from time to time. The latest version applicable at any given time can be viewed on https://www.chevronmarineproducts.com/;

1.1.10      “Discount” means any discount to the Price, bonus or other incentive as described in the MLSA or Order Confirmation;

1.1.11       “EU” means European Union; 

1.1.12       “Marine Lubricants” means marine lubricants as specified in the MLSA or Order Confirmation;

1.1.13      “Marine Lubricants Delivery Receipt” means the document evidencing delivery of the Marine Lubricants issued by or on behalf of the Seller or the Physical Supplier;

1.1.14      “Marine Lubricants Handbook” means the Seller’s Marine Lubricants Handbook, which sets out the descriptions and applications of Marine Lubricants, as amended from time to time.  The latest version applicable at any given time can be made available to the Purchaser upon request;

1.1.15      “MLIPS” means the Seller’s Marine Lubricants International Price Schedule, as amended or updated from time to time, which sets out the prices and delivery terms for Marine Lubricants. The latest version applicable at any given time can be made available to the Purchaser upon request;

1.1.16      “MLSA” means the Marine Lubricants Sales Agreement, together with any Schedules thereto, issued by the Seller or other document evidencing the terms and conditions of the sale in which, by reference, these Terms of Sale are incorporated;

1.1.17       “Order Confirmation” means the order confirmation issued by or on behalf of the Seller recording the details of an order and delivery under the Agreement;

1.1.18      “Party” means a party to the Agreement;

1.1.19      “Physical Supplier” means any legal entity which physically supplies the Marine Lubricants to the Purchaser on behalf of the Seller, including without limitation any Affiliate of the Seller or any supplier of the Seller (or its Affiliates);

1.1.20      “Port” means the port or terminal at which the Marine Lubricants are to be delivered or, where the context requires, the operator, authority or governing body of such port or terminal;

1.1.21      “Purchaser” means the purchaser(s) identified in the MLSA or Order Confirmation;

1.1.22      “Purchaser’s Principal” means any legal entity on whose behalf the Purchaser is acting as an agent for the purchase and supply of the Marine Lubricants, whether or not the agency or principal is disclosed and whether or not the Purchaser purports to contract as agent only;

1.1.23      “Purchaser’s Customer” means any legal entity to whom the Purchaser supplies, intends to supply and/or is contracted to supply Marine Lubricants to be delivered under the terms of the Agreement;

1.1.24       “Receiving Vehicle” means the Vessel, barge, coastal tanker or other vehicle nominated by the Purchaser to take delivery of the Marine Lubricants under the Agreement;

1.1.25      “Seller” means the legal entity or entities identified in the MLSA or Order Confirmation as the seller, and where the context requires, any Affiliated or subsidiary companies;

1.1.26      “Term” means: (a) the duration of the Agreement as specified in, and defined in, the MLSA; or (b) absent an MLSA or absent specification in the MLSA, such period as may be required to perform all obligations under the Agreement;

1.1.27      “Terms of Sale” means these Terms of Sale for Marine Lubricants (January 2017);

1.1.28      “Vessel” means the vessel(s) specified in the MLSA or Order Confirmation or any other vessel(s) for which the Purchaser requires supplies of Marine Lubricants during the Term or to which Marine Lubricants are supplied under the Agreement.

2.               Applicability

2.1           These Terms of Sale apply to all sales of Marine Lubricants entered into by Chevron Marine Products LLC or its Affiliate identified in the MLSA or Order Confirmation.

2.2           The Terms of Sale are intended to be accompanied by an MLSA and/or an Order Confirmation. In the event of any inconsistency between the terms and conditions recorded in an Order Confirmation, the MLSA and these Terms of Sale, the terms and conditions shall apply in the following order of priority: (a) Order Confirmation; (b) MLSA; and (c) these Terms of Sale.

2.3           The terms and conditions recorded in an MLSA or Order Confirmation shall be deemed to apply to the Agreement: (a) unless the Seller receives from the Purchaser written notice of any objections to or disagreements with the provisions of the MLSA or Order Confirmation (as the case may be) within 5 days of issuance of the MLSA or Order Confirmation (as the case may be); or (b) if the Purchaser places any order(s) for deliveries of Marine Lubricants covered by the MLSA.

2.4           For the avoidance of doubt, any terms and conditions contained in any order form or other document that may be used or generated by the Purchaser shall not apply to the Agreement, unless the Seller expressly agrees to such terms in writing.  

2.5           By agreeing to the supply of Marine Lubricants pursuant to these Terms of Sale, the Purchaser confirms and acknowledges that the Purchaser has seen and is familiar with these Terms of Sale, the Directory, the Marine Lubricants Handbook and the MLIPS.

2.6           The Parties may agree to use any electronic systems for ordering Marine Lubricants that the Seller may, at any time and from time to time, make available to the Purchaser. The use of any such electronic ordering system shall be subject to the terms and conditions applicable for the use of such system at the relevant time, in addition to these Terms of Sale. The foregoing does not constitute any obligation or commitment whatsoever to make any such electronic ordering system available to any person.

3.               Orders for Marine Lubricants 

3.1           The Purchaser shall order Marine Lubricants in accordance with the relevant terms of the Directory in effect at the time of the order. The order shall be given in writing by an authorised representative of the Purchaser to the Seller and shall specify:

3.1.1          The Marine Lubricant(s) required to be delivered.

3.1.2          The packages (bulk, drum or pail) and quantity or quantities of Marine Lubricants required.

3.1.3          The Port at which delivery is required.

3.1.4          Details of the Vessel to which the Marine Lubricants are to be supplied (if applicable).

3.1.5          Details of the Receiving Vehicle to be used to take delivery if not the Vessel (if applicable).

3.1.6          The date and time of delivery required by the Purchaser.

3.1.7          The ETA (estimated time of arrival) of the Vessel or other Receiving Vehicle at the Port (if applicable).

3.1.8          The ETD (estimated time of departure) of the Vessel or other Receiving Vehicle at the Port (if applicable).

3.1.9          Details of the local agent at the Port.

3.1.10      Details of the Vessel’s next port of call.

3.2           The Purchaser shall provide full details of the Vessel and any other Receiving Vehicle (including without limitation the name of the Vessel or Receiving Vehicle or other identifying information, the registered name and full address of the owner and, where relevant, the IMO number) as required by the Seller in order for the Seller perform due diligence on the Vessel or other Receiving Vehicle and to ensure that the Seller’s compliance policies have been followed.  Such details are to be provided within the timeframe set by the Seller as being sufficient for it to decide whether to accept the Vessel or other Receiving Vehicle and if accepted, for the Vessel or other Receiving Vehicle to be entered properly within the Seller’s ordering/accounting system. 

3.3           An Order Confirmation shall be issued by or on behalf of the Seller confirming the details of each order and delivery under the Agreement.  Such Order Confirmation shall form part of the Agreement in respect of such order and delivery.  Each order and delivery under the Agreement shall be deemed to be a separate contract.

3.4           The Seller may, in its sole discretion, procure that delivery of the Marine Lubricants is made by a Physical Supplier on behalf of the Seller. If Marine Lubricants are delivered by a Physical Supplier, the terms and conditions of the Agreement will continue to apply with respect to such delivery.

3.5           If the Seller or the Physical Supplier cannot supply the Marine Lubricants as ordered by the Purchaser, the Seller, at its sole discretion, may deliver or cause to be delivered Marine Lubricants produced by other companies. 

3.6           Neither the Seller nor any Physical Supplier shall be obliged to deliver Marine Lubricants to the Purchaser unless: (a) the Seller accepts the order, acceptance not to be unreasonably withheld; (b) the Marine Lubricants ordered by the Purchaser are available at the Port specified in the Purchaser’s order; (c) the order relates to a Vessel specified in the MLSA; (d) the Receiving Vehicle is acceptable to the Seller, the Physical Supplier and their agents; and (e) the Purchaser has complied with Clause 3.1 above.

3.7           Notwithstanding any other provision of the Agreement, each delivery and order shall be subject to the terms and conditions of the Directory and MLIPS.  Without prejudice to the generality of the foregoing:

3.7.1         Deliveries are subject to any surcharges specified in the MLIPS and any additional charges specified in the Directory or by the Seller at the time of confirming ability to supply the order.

3.7.2          If the Purchaser requests delivery of Marine Lubricants at a Port not listed in the MLSA or the Directory or outside of normal working hours on a day on which work at a Port is normally carried out, the Seller may decline to accept the order. If the Seller accepts the order, the Seller may charge additional fees to the Purchaser, including without limitation any charges specified in the MLIPS or any other charges, costs or expenses incurred by the Seller or the Physical Supplier as a result of delivery to such Port and/or during such hours. 

3.7.3          Each order and delivery is subject to the minimum quantities per order specified in the Directory.  The Seller may charge additional fees for delivery in certain quantities or packages as specified in the MLIPS.

3.7.4          Each order and delivery is subject to the lead times specified in the Directory.  If the Seller accepts an order with less lead time, the Seller may charge additional fees as specified in the MLIPS.

4.                Delivery, Risk and Title

4.1           Subject to Clause 4.2:

4.1.1          the Marine Lubricants shall be delivered to the Purchaser free on board the Receiving Vehicle at the relevant Port; and

4.1.2          delivery shall be deemed completed and title to and risk of loss of or damage to the Marine Lubricants shall pass to the Purchaser: (a) for Marine Lubricants delivered in bulk, when the Marine Lubricants pass the permanent fixed intake valve of the Receiving Vehicle; and (b) for Marine Lubricants delivered other than in bulk, when the Marine Lubricants pass the ship’s rail.

4.2           Notwithstanding Clause 4.1, where the Marine Lubricants are to be delivered other than in bulk and: (a) the Seller or the Physical Supplier determines (in its sole discretion) that it is not possible, practicable or safe to deliver free on board for any reason whatsoever; (b) delivery free on board would necessitate use of a crane or other equipment of the Receiving Vehicle; (c) the Buyer requests delivery of the Marine Lubricants free alongside; or (d) the MLSA or Order Confirmation provides for delivery free alongside:

4.2.1          the Marine Lubricants shall be delivered to the Purchaser free alongside the Receiving Vehicle at the relevant Port; and

4.2.2          delivery shall be deemed completed and title to and risk of loss of or damage to the Marine Lubricants shall pass to the Purchaser when the Marine Lubricants are placed on the dock alongside the Receiving Vehicle where accessible by the Seller’s or the Physical Supplier’s delivery equipment or, if inaccessible to the Seller or Physical Supplier, at the nearest reasonably accessible point to the Receiving Vehicle.

4.3           For Marine Lubricants delivered in bulk, the Purchaser shall be responsible for: (a) the connection of hoses to the intake valve of the Receiving Vehicle; and (b) providing and maintaining or causing to be provided and maintained, in good working order, at no cost or risk to the Seller or Physical Supplier, all necessary connections, pipelines and receiving tanks on board the Receiving Vehicle for taking delivery of the Marine Lubricants.

4.4           The Purchaser shall be responsible for:

4.4.1          procuring, at no cost or risk to the Seller or Physical Supplier, a suitable and safe Berth or other place for delivery of the Marine Lubricants which is accessible by the Delivery Vehicle and at which delivery can be safely carried out; and

4.4.2          any damage to the Delivery Vehicle caused by or attributable to the Purchaser or its Affiliates or agents, the Receiving Vehicle or its master, crew, driver or officers or any other person employed or contracted by the Purchaser in connection with the delivery of the Marine Lubricants.

4.5           The Vessel and, if different, the Receiving Vehicle(s) nominated by Purchaser to receive the Marine Lubricants shall be subject to the acceptance of the Seller and the Physical Supplier.

4.6           The Receiving Vehicle shall not be moored at a Berth of the Seller or the Physical Supplier unless free of all conditions, difficulties, peculiarities, deficiencies or defects which might impose hazards in connection with the mooring, unmooring or supply of the Receiving Vehicle(s).

4.7           Neither the Seller nor the Physical Supplier shall be liable for any demurrage, detention, hire or bunkers paid or incurred by the Purchaser or for loss or damage of any nature whatsoever due to any delay in any delivery of Marine Lubricants, save to the extent of any demurrage, detention or hire that the Purchaser proves was incurred and paid by the Purchaser during any period when time was lost directly due to any delay in delivery caused directly and solely by a breach or negligence of the Seller or the Physical Supplier.

5.                Purchaser Warranties

5.1           The Purchaser warrants at the date of the Agreement and at delivery that:

5.1.1          the Marine Lubricants purchased under the Agreement are for the operation of the Vessel(s) specified by the Purchaser and such Vessel(s) only;

5.1.2          the Vessel(s) and any Receiving Vehicles taking delivery of the Marine Lubricants: (a) are in compliance with all local, national and international regulations and requirements, as applicable; and (b) have capacity to take delivery of the Marine Lubricants;

5.1.3          the Purchaser shall have sole responsibility for the selection of the Marine Lubricants suitable for use in the Vessel being supplied.

6.               Purchaser’s Customers and Purchaser’s Principals

6.1           If the Purchaser is supplying the Marine Lubricants to any Purchaser’s Customer or if the Purchaser is acting as an agent for any Purchaser’s Principals:

6.1.1          the Seller and the Physical Supplier shall have the right, in their sole discretion, to refuse to deliver the Marine Lubricants to any such Purchaser’s Customer or Purchaser’s Principal if the Seller or the Physical Supplier determines that such delivery would be in violation or any law or regulation or policy of the Seller or Physical Supplier to which the Seller or the Physical Supplier is subject;

6.1.2          unless otherwise agreed in writing, the Purchaser and the Purchaser’s Principal shall be bound by the terms and conditions of the Agreement (including without limitation any warranties and indemnities) and shall have joint and several liability;

6.1.3          any term and condition of the Agreement which provides for the Purchaser to do, omit to do or refrain from doing any act or thing shall be construed to include that the Purchaser will procure that the Purchaser’s Customer shall do, omit to do or refrain from doing such act or thing; and

6.1.4          notwithstanding any other provision to the contrary, the Purchaser shall at all times remain fully liable for the proper performance of all of its obligations under the Agreement, even if such obligations are performed by or performance of such obligations is delegated to a Purchaser’s Customer or a Purchaser’s Principal. 

7.                Quality

7.1           Unless otherwise stated in the MLSA or the Order Confirmation, the Seller warrants that the Marine Lubricants shall meet the descriptions, specifications and applications set out in the Marine Lubricants Handbook. The foregoing constitutes the whole of the Seller’s obligations with respect to the description, quality and fitness for purpose of the Marine Lubricants. To the extent permissible, all statutory or other terms, conditions or warranties, express or implied, regarding the description, quality or fitness for purpose of the Marine Lubricants (including without limitation those set out in the Sale of Goods Act 1979 in the United Kingdom) are excluded.

7.2           Where the Marine Lubricants were delivered in bulk by barge, the Seller shall be entitled to take, where operationally possible and for the purposes of quality control, up to two (2) composite retain samples during the course of supply of the Marine Lubricants being supplied by barge.  Each sample shall be given a unique identification number, which shall be recorded on the Marine Lubricants Delivery Receipt.  One sample shall be retained by the barge and one sample shall be given to an authorized representative of the receiving Vessel, who shall be requested to sign for receipt.  In the event of claim relating to quality, condition or description, only the contents of these two sealed and labelled samples shall be considered valid for testing at an independent laboratory selected and agreed by both Parties. The result of testing of such independent laboratory shall be final, binding and conclusive on the Parties, save for fraud or manifest error.  The barge samples shall be retained for no longer than 6 months from the date of supply. 

8.                Determination of Quantity

8.1           The quantity of Marine Lubricants delivered shall be determined solely by the Seller and shall be recorded in the Marine Lubricants Delivery Receipt. The quantity recorded in the Marine Lubricants Delivery Receipt shall be final, binding and conclusive on the Parties, save for fraud or manifest error.

8.2           For deliveries in bulk:  

8.2.1          the quantity shall be determined by measurements of tank truck or meter at the point of delivery to the Vessel; and 

8.2.2          the Purchaser shall have the right, at its own expense, to have its representative or an independent inspector present during measurement.

8.3           For deliveries other than in bulk, the quantity shall be indicated on the container.  Marine Lubricants delivered in sealed metal containers shall be determined by the quantities indicated on the container. 

8.4           The Purchaser shall confirm receipt of the Marine Lubricants by having either the Master or Chief Engineer of the Vessel or relevant representative of the Receiving Vehicle (other than a Vessel) sign the Marine Lubricants Delivery Receipt. 

9.                Discounts

9.1           If the MLSA provides that the Purchaser is entitled to a Discount, such entitlement to a Discount is subject to any conditions specified in the MLSA, including without limitation as to the quantity of Marine Lubricants to be delivered.

9.2           If the Purchaser does not, for any reason whatsoever, satisfy the conditions applicable to the entitlement to a Discount, the Seller may, at any time or times, adjust the Discount in respect of any future deliveries and/or demand a reimbursement of any Discounts applied in respect of previous deliveries (in part or in whole).

10.                Payment

10.1          Except as expressly provided elsewhere in the Agreement, the Purchaser shall pay the full amount of all sums due under the Agreement without any discount, deduction, withholding, offset or counterclaim of any kind whatsoever by wire transfer of same day funds in the currency prescribed in the Seller’s invoice to the bank account designated by the Seller.

10.2           Payment of the price for Marine Lubricants shall be made by no later than the due date specified in the MLSA, the Order Confirmation or as otherwise provided by the Agreement. If any due date falls on a Sunday or a Monday that is not a Banking Day, payment shall be made on the first Banking Day following and if any due date falls on a Saturday or day other than a Monday that is not a Banking Day payment shall be made on the last preceding Banking Day.

10.3           The Purchaser agrees that any claims related to a delivery do not constitute a valid defence to a failure to pay, when due, the full amount owed to the Seller. The Purchaser shall make payment in full pending any resolution or settlement of any claims by the Purchaser. The Seller may immediately recover in full any amount deducted by the Purchaser.

10.4           Without prejudice to any other rights or remedies of the Seller, if full payment is not received into the Seller’s bank account on the due date, the Seller shall be entitled, in its sole discretion, to charge a fee of the lesser of: (a) 2% for each thirty day period (or part thereof) in which the payment is late; or (b) the maximum rate permitted under applicable law.   The Purchaser shall be liable for, and pay on demand, any costs or expenses incurred by the Seller as a result of any failure by the Purchaser to pay on the due date and/or in seeking to obtain payment.

10.5           Notwithstanding Clause 10.1 above, the Parties may upon written mutual agreement net invoices for amounts due to each other on the same date. If the Parties so agree, prior to the due date the Parties shall confirm in writing the invoice amounts and the balance due, if any, after netting (being the larger aggregate amount owed minus the smaller aggregate amount owed). When the balance due has been confirmed: (a) each Party’s obligation to make the original payments to the other will be automatically satisfied and discharged; and (b) the Party that originally owed the larger aggregate amount shall, instead, be obliged to pay to the other Party on the date due, the agreed balance.

10.6           It is a condition of the Agreement that the Purchaser complies with its payment obligations under the Agreement. Any failure either in whole or in part by the Purchaser to comply with any such obligations shall be a breach of condition. 

11.               Financial Assurances

11.1           The Purchaser shall periodically provide to the Seller that financial information or security deemed necessary by the Seller to support any credit extension.

11.2           If, during the Term, the financial capacity of the Purchaser becomes impaired or unsatisfactory to the Seller, in the sole judgment of the Seller, advance cash payment or security satisfactory to the Seller shall be given by the Purchaser on demand by the Seller.

11.3           The provision of any security required pursuant to this Clause 11, the terms of the MLSA or the terms of an Order Confirmation shall be a condition precedent to any obligation of the Seller to deliver Marine Lubricants. The Seller shall have no obligation to deliver any Marine Lubricants to the Purchaser until or unless such security has been provided to the Seller in a form acceptable to the Seller.

12.                New and changed regulations, etc.

12.1          It is understood by the Parties that the Seller is entering into the Agreement in reliance on the laws, rules, regulations, decrees, agreements, concessions and arrangements (“Regulations”) in effect on the date of the Agreement with governments, government instrumentalities or public authorities affecting the Marine Lubricants sold under the Agreement including, but without limitation to the generality of the foregoing, those relating to the production, acquisition, gathering, manufacturing, transportation, storage, trading or delivery thereof, insofar ass such Regulations affect the Seller, the Physical Supplier or their supplier(s).

12.2           If at any time and from time to time during the Term any Regulations are changed or new Regulations become or are due to become effective, whether by law, decree or regulation or by response to the insistence or request of any governmental or public authority or any person purporting to act therefor, and the material effect of such changed or new Regulations: (a) is not covered by any other provision of the Agreement; and (b) has or will have a material adverse economic effect on the Seller, the Seller shall have the option to request renegotiation of the price(s) or other pertinent terms of the Agreement. Such option may be exercised by the Seller at any time after such changed or new Regulations are promulgated by written notice to the Purchaser, such notice to contain the new price(s) or terms desired by the Seller.  If the Parties do not agree upon new price(s) or terms satisfactory to both Parties within 15 days after the date of the Seller’s notice, either Party shall have the right to terminate the Agreement immediately at the end of such 15-day period. Any Marine Lubricants delivered during such 15- day period shall be sold and purchased at the price(s) and on the terms applying under the Agreement without any adjustment in respect of the new or changed Regulations, to the extent permissible under such new or changed Regulations.