7.1. The Supplier is responsible for defects in the delivery objects for a period of two and a half years from passing of risk. In the case of buildings and works, the success of which consists in the provision of services in planning and supervising them, the period is extended to five years from their acceptance.
7.2. ELNIC will notify the Supplier of defects immediately and in writing, to the extent that such defects are identified in the course of ordinary business activities.
7.3. If a delivery object turns out to be defective during the warranty period, ELNIC may demand subsequent performance, i.e. at its option removal of the defect(s) or supply of goods or services free of defect(s). ELNIC may assert these rights in addition to its claim for performance and even prior to the passing of risk if the defects are identified at that point in time.
7.4. If the subsequent performance by the Supplier fails, if the Supplier refuses subsequent performance, or if the Supplier does not bring about subsequent performance within an appropriate period of grace set by ELNIC, then ELNIC may abate the purchase price, or withdraw from the contract and demand reimbursement for expenditure incurred in vain or compensation in damages in lieu of performance.
7.5. The Supplier undertakes to thoroughly examine the delivery objects for defects and to do everything to avoid any product liability. If claims are made on ELNIC on account of the defectiveness of any product and if the defectiveness is based wholly or partially on any defect(s) in the Supplier’s delivery, then ELNIC may also demand indemnification vis-a-vis third parties instead of compensation for all damage. The Supplier’s obligation to pay compensation for damages also encompasses the costs of any precautionary recall operation to prevent losses, if this is feasible. The Supplier is obliged to take out appropriate insurance against all damage risks in conjunction with product liability.
7.6. In so far as any third party makes claims against ELNIC on account of the breach of any industrial property rights, copyright or other right because of goods and/or services delivered by the Supplier and used by ELNIC in accordance with the contract, the Supplier will comprehensively indemnify ELNIC in relation to the third party from recourse of every kind. ELNIC will support the Supplier reasonably in the case of it defending itself against unjustified claims by third parties, in which case the Supplier shall assume the costs incurred by ELNIC in this connection.
7.7. If it turns out during the guarantee period that any work is defective, ELNIC may demand subsequent performance, whereupon the Supplier may at its option remedy the defect or manufacture a new work. ELNIC may assert this subsequent performance in addition to its claim for performance and even prior to the passing of risk if the defects are identified at that point in time.
7.8. If the subsequent performance by the Supplier fails, if such subsequent performance is unreasonable for ELNIC, if the Supplier refuses subsequent performance, or if the Supplier does not bring about subsequent performance within an appropriate period of grace set by ELNIC, then ELNIC may itself remedy the defect(s) and demand of the Supplier reimbursement of the necessary expenditure – including in the form of an advance disbursement.
7.9. Alternatively ELNIC may, in the conditions covered in clause 7.8 above, abate the purchase price or withdraw from the contract and demand reimbursement for expenditure incurred in vain or compensation for damages in lieu of performance.
7.10. In all the aforementioned cases the Supplier may not make the subsequent performance dependent on the proportionate or full payment by ELNIC of the payment that has been agreed. The Supplier must bear the expenditure necessary to achieve the subsequent performance, including transportation of goods, travel costs, and labour and material costs.