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Applicable to all transactions

1.)    General Terms and Conditions for Contracts:

The present General Terms and Conditions for Contracts (hereinafter: “GTC”, path: is a document that regulates the essential terms and conditions of selling products (hereinafter: “Products”) and/or providing services (hereinafter: “Services”) supplied by Protecta Elektronikai Kft, i.e. Protecta Electronics Co. Ltd. (registered office: 1158 Budapest, Késmárk u. 7/A; trade registry number: Cg.: 01-09-064382, as seller or contractor, hereinafter: “Seller”). This GTC shall form an integral part of any Contract, frame contract concluded between Seller and Buyer (hereinafter: “Buyer”; Buyer and Seller hereinafter collectively referred to as the “Parties”) or of any accepted/fulfilled order placed by Buyer (hereinafter: “Contract”). Any deviations from the present GTC shall be deemed valid only if the Parties express their will to approve any of such deviations in writing. Buyer acknowledges that it has read and scrutinised the present GTC and expresses its consent to be bound by the entire contents of this GTC. Should there be any contradiction or discrepancy between the present GTC and a Contract, the provisions set forth in the Contract shall prevail. In the course of the performance of the Contract, Parties exclude the application of the standard contractual clauses of Buyer. Buyer declares that it purchases the Product in the course of its normal business activities for its own use or re-sale, and the Contract does not qualify as a consumer contract as per the Governmental Decree 45/2014 (II.26).

2.)    Conclusion of Contract:

Buyer may order Products/Services from Seller through an RFO (Request for Offer) sent via telefax, email or by post. In response to orders, Seller may send an offer by post or via email or telefax according to which the offer shall be binding on Seller for a validity period specified therein. If prior to the expiry of the validity period Buyer fully accepts the offer submitted by Seller in writing (by post, via email or fax), then in line with the contents of Seller’s offer, a Contract is to be concluded between the Parties, and this Contract shall take effect on the day when Seller receives Buyer’s related written confirmation. If Buyer confirms Seller’s offer with different contents or sends its confirmation after the expiry of the validity period, then no Contract shall be concluded between the Parties until Parties have reached an agreement on the deviations or with respect to the validity period of the offer. The Contract shall contain the entire agreement between the Parties, with all its Annexes and amendments thereto.

3.)    Special provisions based on the subject of the Contract

3.1    Products -Transfer of ownership and risk:

Whereas the subject of the Contract is a Product, the transfer of ownership of the Products and the risk of damage shall be governed by the INCOTERMS 2020 clauses. Unless otherwise agreed by the parties, the Product will be sold on an EXW basis.

3.2    Software licence:

Unless otherwise provided in the Contract, Seller grants Buyer a non-exclusive, non-transferable licence with a validity limited to Hungary in order to enable the use (and running) of the computer software package and related documents as determined in the Contract (hereinafter collectively referred to as “CPM”) in a number of copies defined in the Contract and on the hardware equipment stipulated therein. The temporal scope of the licence shall be determined in the Contract. In addition to the terms and conditions of use expressly set out in the present GTC, Buyer is entitled to no other licences or rights of use. Buyer shall:

a.    preserve the confidentiality of CPM;
b.    disclose CPM to no third party;
c.    make no modification to CPM or grant no permission to a third party to modify CPM without Seller’s prior written consent;
d.    not print out, copy, duplicate, disseminate, modify or reverse engineer CPM;
e.    not use CPM, or a part of CPM for purposes that are contrary to those set out in the contract;
f.    use CPM only on that hardware equipment on which Seller or Buyer has installed CPM.

If Buyer resells the Products/Services or a part of them to an end-user, Buyer shall inform Seller of such resale and ensure that end-user accepts the conditions above. Buyer is aware of the fact that with respect to CPM, Buyer may grant such end-user a licence, i.e., a right of use, only against Seller’s prior written consent.

3.3    Services - Payment conditions applicable in case of provision of Services

a.    A technical handover and acceptance report must be issued for the performed Service, followed by a certificate of performance. The report and the certificate of performance shall state the fact, time and consideration for the performance. The invoice must be issued within 8 (eight) calendar days from the date of issue of the certificate of performance.
b.    In case of Services, the Seller shall issue the invoice for the name of the Buyer and send it to the address of the Buyer, accompanied by a printed certificate of performance signed by the representative of the Buyer.

4    Prices/Fees:

The prices of products (hereinafter: “Product Price”) / fee of services (hereinafter: “Service Fee”) specified in the Contract shall exclude any customs duties, taxes or any payment obligations prescribed by the state. The Product Prices shall not include those costs which arise from some special packaging, or from special transporting or storing circumstance/condition, consequently such costs shall be charged to Buyer, except for the case in which Seller has expressly offered such special packaging, special transporting circumstance etc. in writing and has factored the related costs in its offer price.

5    Modification to Contract:

Modifications to the Contract may only be made by mutual agreement in writing by the Parties.

6    Delivery deadlines and Buyer in arrears:

The performance deadlines laid down in the Contract have been determined based on the information available to Seller at the time of concluding the Contract. If in the course of the performance of the Contract Seller finds itself in a situation that prevents Seller from ensuring performance to the deadline specified in the Contract, Seller shall be bound to promptly give Buyer a written notice of the fact, cause and expected duration of the delay, and to set an additional period (i.e. a second deadline). Seller shall not be deemed in delay until the expiry date of the said additional period. Seller reserves its right to make partial deliveries and issue partial invoices. If the Seller is in delay due to a reason attributable exclusively to the Seller, it has to pay liquidated damages (hereinafter: “LD”) for delay towards the Buyer. The basis of the LD is the net value of the Products / Services in delay, the measure of the LD is 0,5% of the price set forth according to Clause 4 per each completed week, but not more than 7,5%. Beyond the LD the Buyer may not establish further claims due to the delay. The Parties shall agree that the LD as per this Clause may be charged or claimed only for reasons related to non-contractual performance that may arise until Buyer accepts the performance by Seller, consequently, LD shall be not claimed in and deemed applicable, inter alia, to the cases, which form the grounds for enforcing Buyer’s rights under guarantee, that arise after the said acceptance. If Buyer unjustifiably refuses to accept the Products/Services offered for take-over, or is in default, in such cases, without any prejudice to the other rights of Seller, Seller may:

a.    safekeep the Products/Services offered for take-over at the cost and risk of Buyer;
b.    sell the Products/Services to a third party at a reasonable price achievable in the particular market conditions in order to mitigate damage and loss. If done so, the original purchase price, as the basis of compensation, shall be reduced by the purchase price realised through the sale of the Products/Services on condition that Buyer may offset its related sales costs against the purchase price.
c.    submit a claim for penalty for delay which shall be charged for each day commencing in arrears and equal to 0,5% per day of the net value of the Product not taken over on time, with the Seller not charging a penalty for the first 15 days.

If Buyer does not take over the Products / Services within 30 days of the set date of hand-over/take-over or of the date of notification of completion, on the 31stday the transaction shall be deemed to have been fulfilled by Seller, based on which Seller shall be entitled to issue its invoice (in case of Services, that includes in the lack of certificate of performance).

7    Obligations of Buyer:

Buyer, within the time limit laid down by the Parties, shall provide Seller with all the information deemed necessary to perform the Contract, including all information requested by the checklist provided by the Seller (hereinafter: “Checklist”). Should Seller ask for the provision of additional information, Buyer shall supply the requested information to Seller within 3 days. If provision of data takes a longer time, Parties may agree on a different time limit. If the Contract stipulates that the place of performance shall be the site of Buyer, Buyer shall make the site in condition fit for work available to Seller. Seller may refuse to start performance until Buyer complies with the requirements above. Buyer shall use the Product according to the conditions set forth in the related technical descriptions and instructions for use. Buyer shall be responsible for any faults and deficiencies arising on its own site, including but limited to any fault or malfunction of hardware, software, equipment or network elements connecting to the Product as well as the interoperability issues experienced between the Products/Services considered herein and the hardware, software, equipment and network elements of Buyer. Buyer shall ensure that the installed Products are operated by qualified and properly trained personnel and the requirements and assumptions made by the Seller with respect to the performance and environmental conditions are fulfilled. In addition to those above, Buyer shall properly safekeep the Products on its site while the hand-over/take-over procedure takes place.

8    Disclosure due to sanctions or temporary suspension, invalidity of the Contract

8.1    The Buyer shall warrant that it is not suspended, debarred, affected by sanctions, restricted or otherwise identified as ineligible by the EU and Hungary (hereinafter collectively referred to as: “Restrictive Authority”).

8.2    The Buyer shall warrant that it has no intention to, and it shall not re-sell the Products or forward the Services to any legal entity or natural person (end-user) that is affected by any suspension, debarment, sanction or restriction implemented by any Restrictive Authority.

8.3    Buyer is required to disclose to Seller whether itself, or any of its affiliates, subcontractors or agents, is subject to any sanction, export restriction or temporary suspension imposed by any such organisation at any time during the three (3) years prior to the conclusion of the Contract and at any time throughout the execution of this Contract..

8.4    Buyer shall immediately notify the Seller in case of changes to any of the circumstances listed in the Checklist, in particular, but not limited to, in the event of changes in the end-user of the Products, or change of control in the Buyer.

8.5    The Buyer recognises that failure to fulfil any obligation under this Clause 8 is construed as a material breach of the Contract, based on which the Seller is entitled to terminate the Contract with immediate effect, in accordance with the provisions of Clause 18.).

8.6    In case after the conclusion of the Contract, the Seller becomes aware that despite the due diligence of the Parties, or due to the Buyer’s fraudulent practice and material misrepresentations or omission of notification of changes on its status, the Buyer is in fact affected by any suspension, debarment, sanction or restriction implemented by any Restrictive Authority, the Contract shall be deemed invalid, and the Buyer is not entitled to demand performance of the Seller based thereon. In this case, the Parties are obliged to account properly for the Products / Services already rendered and to cooperate in order to ensure compliance with the applicable laws.

9    Obligation of Parties:

In order to fulfil the Contract, Parties shall mutually and promptly provide each other with the facts, data and circumstances that affect the performance and shall make all their reasonable efforts to remove and eliminate the circumstances hindering performance. The performance by Seller shall be deemed in conformity with the contract, if Seller has fulfilled all the provisions set forth in the Contract, submitted to Buyer the documentations necessary to operate the Products/Services, and Buyer have taken over the said documentations in full. As to the take-over, Buyer shall provide Seller with a written certificate receipt of the delivered Products/Services. The performance by Buyer shall be deemed in compliance with the contract if Buyer has taken over the Products/Services in conjunction with the bill of delivery and paid the Product Price / Service Fee to Seller in line with the provisions set forth in the Contract.

10     Confidential information:

All information, materials, documents and data that Seller has made available to Buyer in the course of the performance of the Contract shall be regarded as confidential information (hereinafter: “Confidential Information”), except for the information, materials, documents and data which, as per the relevant legislation, are of public interest or they are the public knowledge. Buyer shall safeguard the confidentiality of the Confidential Information, while Seller shall treat the Confidential Information as business secret. Buyer shall not disclose the Confidential Information to any third party without Seller’s prior written consent. Buyer’s obligations to preserve the secrecy of the Confidential Information shall survive the termination of the Contract due to any reason.

11    Terms of payment:

11.1     The invoice shall be settled by transfer to the Seller’s bank account indicated in the invoice within 30 calendar days of receipt of the invoice by the Buyer.

11.2    The Parties agree that the day on which the Seller 's bank account is debited by the Buyer’s bank account with the amount to be paid shall be considered the day of payment of the Product Price / fee of the Services.

11.3    If the payment deadline falls on a day off, public holiday or non-working day, the payment deadline expires on the next working day.

11.4    The Seller is entitled to submit an invoice after full compliance with the provisions of this Contract.

11.5    Act CXXVII of 2007 on Value Added Tax. TV. 55-56. §, the date of performance on the submitted invoice is the same as the date of actual performance.

11.6    In case of late payment, the Buyer is obliged to pay the Seller a late payment interest equal to the central bank base rate - in case of a debt in foreign currency with the base rate set by the issuing central bank for the given currency, otherwise with the money market interest rate. The Parties took into account the amount of default interest when determining the amount of the Fee of the Services. Until the payment deadline, the Buyer is subject to the provisions of the Civil Code. 6:47. § does not impose a transaction interest payment obligation. If the Buyer excuses his delay, he shall not be liable for late payment of interest.

11.7    The Buyer is entitled to include its due receivables against the Seller under any title, in its debt to the Contractor with a unilateral written statement to this effect.

12.) Limitation of liability:

Seller shall be bound to compensate Buyer for any damage caused by the breach or the performance or non-performance of the Contract associated with deliberate conduct, as well as for the harm to life, physical integrity and health, and for those arising from its criminal offence. In any other cases Seller’s liability to compensate, including its obligation to pay penalty, shall amount up to 50% of the consideration payable to Seller. Seller shall be not responsible for any indirect or consequential damages. For the purposes of the contract, indirect and consequential damages shall include inter alia loss of profit, loss of production and revenues, loss of contracts, losses arising from the limited or failed use of equipment constituting the subject of the Contract, loss of power, loss of use, costs of capital, downtime costs, claims of customers of purchaser or costs of replacement of power or loss of anticipated savings, increased costs of operation or for any special, indirect or consequential damage, loss of any nature whatsoever. Buyer shall acknowledge to be entitled to enforce any claim for damages caused by the breach of the Contract or for any indirect or consequential damages against the Seller as legal entity only. Buyer shall state that no claim and no legal action for such damages will be enforced against the managing director (mean executive committee based on Civil Code 3:21§) and supervisory board members of Seller.

13.) Indemnification:

Buyer undertakes to indemnify Seller against all losses, costs or damage that Seller has suffered, including the costs of legal proceedings incurred by Seller due to reasons within the Buyer’s control or were caused by enforcing Seller’s rights or Buyer’s obligations, or arise from the fact that Buyer has used the Products/Services, in whole or in part, in a manner different from their intended purpose or use, including the modifications and use with respect to the Products/Services supplied by other parties.

14.)    Compensation, penalty:

14.1. Penalty for delay:

14.1.1. In the event of any delay due to reasons attributable to the Seller or its subcontractors or other contributors, which is related to the fulfillment of the Seller’s obligations under the Contract, the Buyer may take the following action against the Seller: - enforcement of penalties and /or enforcement of damages.

14.1.2. In case of late fulfillment of the deadline specified in the Contract, the Seller shall pay a penalty for delay. The penalty is based on the Product Price / Service Fee, the penalty rate for each day of delay is 1% of the base of the penalty for delay, but not more than 15%.

14.1.3. The Buyer may also assert its proven claim for damages in excess of the penalty against the Seller and may assert its other claims arising from the breach of contract, and the payment of the penalty does not release the Seller from performance.

14.2. Faulty performance penalty:

14.2.1. In the event of defective performance, the Buyer may, in addition to its warranty and guarantee rights, take the following action against the Seller: - enforcement of penalties and/or enforcement of damages.

14.2.2. In case of defective performance - for the period from the reporting of the defect to the elimination - the penalty is the same as the penalty for delay.

14.2.3. The Buyer is also entitled to enforce its rights against the Seller in excess of the penalty for defective performance, caused by the defective performance, and for other damages arising from breach of contract. The Buyer is also entitled to enforce its warranty claims in the event of a penalty for defective performance.

14.3. Impossibility penalty:

14.3.1. In case of impossibility attributable to the Seller, refusal of performance by the Seller without a legitimate reason and / or withdrawal or termination (failure) of the Seller legally exercised by the Seller, the Seller shall be liable to penalties. The impossibility penalty is based on the contract price, which is 10%.

14.3.2. The Buyer may also enforce its proven claim for damages in excess of the penalty and its other rights arising from breach of contract, however, the impossibility penalty excludes the claim for performance.

14.4. Penalty for breach of provisions regarding sanctions and temporary suspensions

14.4.1. In the event that the Buyer breaches its obligations under Clause 8.2, the Buyer shall pay a penalty to Seller that equals to the administrative fine imposed on the Seller as a result of the Buyer’s breach of Contract.

14.4.2. The Seller may also enforce its proven claim for damages in excess of the penalty and its other rights arising from the Buyer’s breach of Clause 8.

15.)     Force majeure:

Neither Buyer nor Seller may be held responsible for any fault or delay caused by force majeure, therefore are outside the control of the contracting parties; the scope of the force majeure events include, but is not limited to the following: government action, rule of law, measures of public authorities, war (either declared or not), military and civil disturbances, natural disasters (floods, earthquake, windstorm, epidemic, fire), embargo, sabotage, maritime disaster, strikes and labour disputes. Providing that any of the contracting parties notifies the other party in writing of the occurrence of any of the events above, the deadline for performing the contract shall be extended proportionally by the duration of the occurrence or by the duration necessary to implement the measure to control such event. If on account of force majeure any of the contracting parties is prevented for longer than 30 days from fulfilling its contractual obligations, it may terminate the Contract with immediate effect by a written notice sent to the other party. If the Contract is terminated as described above, the Parties shall settle their outstanding accounts with each other.

16.)     Guarantee:

Unless otherwise provided in the Contract, Seller shall grant a one-year guarantee on the Products manufactured / Services provided manufactured by Seller, effective either on the date of signing the protocol on the take-over or as of date of the technical take over successfully and jointly implemented by Buyer and Seller, providing that use is in line with the operation manual made available by Seller. Seller shall primarily fulfil its guarantee obligations by repairs or by replacements if repairs prove unsuccessful. If any accessory or part of the Products/Services are repaired or replaced during the guarantee period, then the guarantee period applicable to the repaired or replaced accessory or part shall be as long as the remaining part of the initial guarantee period. This guarantee shall not be applicable to the faults arising from the following:

a. purposeful wrongdoing and negligence;

b. natural wear and tear;

c. commissioning by Buyer or a third party without Seller’s expressed consent;

d. abnormal use or excessively increased use;

e. modification or alteration made to the product by Buyer or a third party without the written approval of Seller;

f. maintenance skipped by Buyer or performed by a party other than Buyer;

g. failure of Buyer to maintain the Seller-specified ambient conditions including, but limited to, checking for the adequate electric power, temperature and humidity;

h. use of inadequate operational and spare parts;

i. those reasons which are beyond the reasonable control of Seller.

The afore-described guarantee does not cover the transport costs, import taxes/duties, wages, or the duration of travel and its costs related to the guarantee operations carried out on the site of Buyer and all the aforementioned costs shall be borne by Buyer. If a guarantee obligation cannot be fulfilled in situ, all the costs coming from collection and repatriation shall be borne by Buyer. No guarantee obligation arises on the side of Seller, if Buyer fails to pay the purchase prices by the due date. Seller’s obligation to grant guarantee shall lapse if maintenance or any repair of the Product falling due is performed by a party other than Seller or the person duly approved by Seller. The provisions set forth in this Clause with respect to the guarantee shall be applied mutatis mutandis to the warranty as well. Seller shall have no guarantee obligations other than those expressly undertaken pursuant to the Contract and the present GTC; consequently, Seller shall be exempt from any other guarantee obligations independently of the fact whether they are stipulated in legislation or are based on some contract or are accepted by implied conduct.

17.)     Rescission:

If the Products/Services have not been delivered yet, Buyer may rescind the Contract by a unilateral written statement sent to Seller, provided it fulfils its obligation to pay the lump sum compensation below:

a.    0 -15 days after the conclusion of the Contract, 10% of purchase price as per the Contract;

b.    16 -30 days after the conclusion of the Contract, 25% of purchase price as per the Contract;

c.    later than 30 days of the conclusion of the Contract, the higher one of the following amounts:

i.    25% of purchase price, or

ii.    the percentage of purchase price that is proportional to the quantity of work invested in the delivery of the Products/Services. Seller’s definition applicable to rescission including obligation to pay is final and conclusive.

18.)    Termination by extraordinary notice:

The provisions set forth in this Clause shall be applied if:

a.    Buyer breaches any of the material conditions of the Contract, including its obligations under Clause 8;

b.    Buyer terminates or suspends its business activity;

c.    Buyer becomes unable to meet its contractual obligations because these obligations have expired or bankruptcy proceedings or liquidation proceedings or judicial enforcement proceedings are brought against Buyer, or Buyer is insolvent, or official receiver or a court bailiff has been appointed, or the appointment of such officials is under-way, or Buyer is needed to take any measures to meet its liabilities towards its creditors;

d.    The financial situation of Buyer indicates that Buyer will be unable to pay for the price of the Products/Services or to offer any required guarantee to ensure that the Products/Services will be paid for on time;

e.    If Buyer prejudices or jeopardises the legitimate interests and reputation of Seller, or breaches Seller’s Code of Conduct.

If any of the conditions set forth in this Clause are fulfilled, without prejudice to the other rights of Seller, Seller may be entitled either to terminate the Contract by an extraordinary notice with immediate effect, or to suspend any further performance without any further obligations toward Buyer. If Seller has already delivered the Products/Services, but Buyer has not paid their purchase price yet, the purchase price, despite any former agreement to the contrary, shall fall due with immediate effect. Termination of the Contract for any reason shall not affect the settlement obligation applicable to the Products/Services delivered prior to termination.

19.)    Waiver:

Any omission or delay on either side of the parties in the course of exercising the rights arising from the Contract may not be construed as a waiver of any right, and exercising specific rights arising from the Contract or exercising these rights in part does not exclude any further exercising of rights or exercising such rights in a different manner, or exercising any other possible rights.

20.)    Notices and written legal statements:

All notices shall be in writing. Notices may be delivered in person, by post, telefax or electronic mail. If delivery by post is unsuccessful, a legal statement sent by registered letter with acknowledgement of delivery shall be deemed to have been effected in the following cases:

a.    if addressee or any other person authorised to receive mail has refused the mail, or the delivery to the contact address specified by addressee has been unsuccessful since addressee is unknown at that specified address or addressee has moved, delivery is deemed to have been effected on the date of the attempted delivery;

b.    in other cases delivery is deemed to have been effected on the 5th working day after the date of the unsuccessful attempt to make delivery or the date of placing the notice in the mail-box.

21.)    Reference:

Buyer agrees that Seller may, without any limitation, refer to the legal relationship established with Buyer in its list of references.

22.)    Governing law and dispute settlement:

Any matter or issue not regulated by the Contract shall be governed by the provisions of the Civil Code of Hungary. Parties shall primarily make attempts to settle any of their disputes by negotiation. Should these attempts prove futile, the provisions of Act CXXX of 2016 on the Code of Civil Procedure shall apply to the settlement of disputes.

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