General Terms and Conditions of Falken Tyre Europe GmbH („Falken“)

As of August 2020

A. General Delivery Conditions

1. a) These terms of sale and delivery apply exclusively to companies (Section 14 German Civil Code, BGB). They are part of all offers and contracts for deliveries and services of Falken in current and future business relations. All agreements and orders shall be made in writing to be binding. There are no oral collateral agreements. This shall not exclude the possibility of proof to the contrary.

b) The offers of Falken are subject to change and non-binding, unless they are expressly specified as binding. Any order placed by the customer is considered a binding offer of contract. The contract is only concluded when Falken accepts the customer’s order in writing (e.g. by means of an order confirmation). Falken is not obliged to accept an offer of contract.

c) Delivery and invoicing shall be effected at the prices and terms of business valid on the date of conclusion of the contract. Falken delivers only to its direct customers in Germany according to the Incoterms DDP. If the delivery is made to a third party or to a delivery address outside Germany, Falken shall charge a service flat rate, which is to be agreed in each individual case. If accelerated dispatch is agreed (e.g. air freight, express freight, express), the customer shall bear the difference between the costs for freight and the higher expenses.

2. Binding delivery times shall be agreed separately and individually. Partial deliveries are permissible. The delivery period shall be extended appropriately in the event of unforeseeable, extraordinary events which cannot be avoided despite the care required and reasonable under the circumstances of the case, including but not limited to force majeure events and other disruptive events affecting Falken, our suppliers or transport companies, for example operational or traffic disruptions, fire, flooding and other natural disasters, shortages of labour, energy or raw materials, industrial disputes, war, civil war or uprisings, pandemics, export and import bans or other official measures. If the goods are ready for dispatch and if dispatch or acceptance is delayed for reasons for which Falken is not responsible, the risk shall pass to the customer upon receipt of the notification of readiness for dispatch. Dispatch shall be deemed to have taken place at that time.

3. The return of goods delivered in accordance with the contract is excluded. If, in exceptional cases, goods delivered in accordance with the contract are taken back by Falken, they must be technically and visually in perfect condition and resalable. In this case Falken is entitled to charge a flat-rate return fee for the costs incurred in the course of the return (including but not limited to logistics costs) plus statutory value added tax. The goods shall only be deemed to be taken back after they have been cleared in a quality inspection in Falken’s central warehouse. The net price valid on the return date will be credited, less any discounts granted or other condition elements. If the net price on the delivery date was lower than the net price on the return date, the net price valid on the delivery date shall be credited.

4. The filing of insolvency proceedings, the application for or the submission of an affidavit regarding a list of assets, repeatedly delayed payments, clear indications of a significant deterioration of the customer’s liquidity or a change in the ownership of the company or the customer shall entitle us to demand delivery against advance payment.

B. Retention of title

1. The delivered goods shall remain the property of Falken until full payment of all claims arising from the business relationship, including any current account balance. If the customer is in default of payment or in other, not only minor, breaches of the customer’s contractual obligations, Falken shall be entitled to withdraw from the contract and demand the return of the goods.

2. The customer is entitled to resell the goods subject to retention of title in their normal business transactions; however, the customer is not permitted to pledge the goods or transfer them by way of security.

3. The customer hereby assigns any claims from the resale of the goods subject to retention of title to Falken, who accepts the assignment. However, the customer shall be entitled to collect the claims unless the customer is in default with the fulfilment of their obligations towards Falken, stops their payments, insolvency proceedings are applied for or opened over their assets or out-of-court settlement proceedings are carried out. Upon request, the customer shall provide Falken with the information on the assigned claims necessary for collection, hand over to Falken all documents required for this purpose and inform the debtor of the assignment without delay.

4. The goods subject to retention of title shall be processed or installed by the customer on behalf of Falken, without Falken incurring any obligations. If the goods subject to retention of title are processed, combined or installed with other items not belonging to Falken, Falken shall be entitled to the resulting co-ownership share in the new item in the ratio of the value of the goods subject to retention of title to the other processed goods at the time of processing, combination or installation. If the customer acquires sole ownership of the new item, the contracting parties agree that the customer shall grant Falken co-ownership of the new item in the ratio of the value of the processed or combined or installed goods subject to retention of title and shall keep them safe for Falken free of charge. If the goods subject to retention of title are resold together with other goods, whether without or after processing, combination or installation, the advance assignment agreed above shall only apply to the value of the goods subject to retention of title which are resold together with the other goods.

5. The customer shall inform Falken without delay of any seizures, confiscations or other enforcement measures or disposals by third parties in respect of the goods subject to retention of title or the claims assigned in advance, handing over the documents necessary for intervention.

6. If the realisable value of the above securities exceeds the secured claims by more than 10%, Falken shall release a corresponding part of the securities; Falken shall be responsible for selecting the securities to be released.

C. Conditions of payment

1. The prices are binding and are for deliveries in Germany DDP (Incoterms 2020) and in each case in EURO plus the respective statutory value added tax and excluding the costs of packaging, loading, shipment, transport insurance, customs and handling costs. In the case of delivery abroad, transport, customs and additional costs shall be added. Falken is not liable for taxes or duties incurred abroad. If fixed prices have not been agreed, Falken’s current list prices shall apply. Amounts invoiced by Falken are due within 15 days of the date of dispatch (= invoice date), subject to timely receipt of the invoice. Discounts shall not be granted, unless otherwise agreed in the invoice or contract.

2. The date of receipt of payment shall be the date on which the amount is available to Falken or is credited to Falken’s bank account. The customer bears the risk of the payment method. Falken reserves the right to make deliveries only against prepayment, cash payment or payment on delivery, especially for first orders or after exceeding payment due dates.

3. Bills of exchange and cheques are not accepted.

4. The customer is only entitled to offsetting if their counterclaim is undisputed or has been legally established. Deductions (discounts, bonuses, etc.) that are not expressly agreed shall not be recognised.

5. Falken is entitled to set off all claims which the customer has against Falken.

D. Liability and warranty provisions

1. For the scope of Falken’s deliveries and services, only Falken’s written order confirmation or the documents referred to therein are authoritative. This technical information about the delivery item – including illustrations, drawings and technical information – does not constitute a guarantee or a statement of quality. Public statements, recommendations or advertising by the seller or the manufacturer do not constitute a contractual statement of the quality of the goods. We reserve the right to make technical improvements without prior notice and coordination with the customer. Falken provides a warranty for the delivered goods in accordance with the following provisions:

2. If the goods and/or services delivered by Falken are defective, including the absence of the contractually agreed quality, Falken shall, at its discretion, either deliver a replacement or repair the goods and/or services; in this case, the number of attempts at repair or replacement shall not be less than two, provided that the serial number or the manufacturing symbol has not been removed or made illegible.

3. Visible defects in the goods and/or services must be reported in writing without delay, at the latest within one week of delivery.

4. If the customer receives faulty instructions, Falken shall only be obliged to supply faultless instructions and this only if the defect in the instructions prevents proper assembly.

5. We reserve the right to make technical improvements without prior notice and coordination with the customer.

6. Claims from defects shall become time-barred after one year, beginning with the delivery of the goods to the customer.

7. Warranty shall be assumed for Falken’s services in accordance with the following provisions. Falken shall be liable without limitation in accordance with the statutory provisions insofar as a contractual obligation has been breached by Falken or its vicarious agents with intent or gross negligence or if damage to life, body or health has occurred or Falken has assumed a guarantee. Liability for slight negligence is excluded, unless an essential contractual obligation (cardinal duty) has been violated. In this case the liability is limited to the amount of the reasonably foreseeable damage.

8. Warranty claims are excluded if a defect is caused by improper use or treatment, such as

a) non-compliance with the prescribed air pressure,

b) exceeding the permissible load and driving speed for each individual tyre size,

c) rally and racing use,

d) faulty installation, even on non-standard, rusty or otherwise defective rims, by the customer or third parties,

e) natural wear and tear,

f) unsuitable operating materials,

g) incorrect wheel position or wheel arch problems (e.g. dynamic imbalance) as well as

h) chemical, mechanical or thermal influences outside Falken’s control and responsibility.

9. The aforementioned limitations of liability of this section D shall not apply insofar as recourse claims are asserted against Falken as supplier in accordance with Section 478 BGB or for claims in accordance with Sections 1, 4 German Product Liability Act.

E. Miscellaneous

1. The place of performance and jurisdiction for all claims arising from the terms of business, including but not limited to Falken’s deliveries, is Offenbach, even if sales or deliveries have been made from elsewhere. Falken is also entitled to take legal action at the courts responsible for the customer’s registered office. The law of the Federal Republic of Germany applies exclusively, excluding the United Nations Convention on Contracts for the International Sale of Goods.

2. If any provisions are or become invalid in whole or in part, this shall not affect the validity of the contract or the remaining terms of sale, delivery and payment. The parties shall replace invalid or unenforceable terms or contractual provisions by valid provisions which come as close as possible to the intended purpose.

3. Any other terms of business are invalid, even if we do not expressly object to them; they shall only apply if they are accepted by us in writing in individual cases.

4. Data is collected, used and stored in compliance with the General Data Protection Regulation (GDPR) and the German Data Protection Act.