Contracts for non-standard assembly lines must address acceptance (FAT/SAT), payment milestones, and warranty closure (Source: Industry practice). Core elements: Precisely define acceptance criteria and link payments to specific milestones (Source: Sinospect). Warranty: Define the start date (e.g., 12-month term) and scope of coverage (Source: Industry insights)—Guiding principle: Clearly articulate clauses that answer “when it starts,” “what is covered,” “duration,” and “who pays” (Source: Industry insights).
I.
Acceptance Clauses
FAT: Factory Acceptance Test / Buyer witnessing / Testing against drawings and specifications / FAT report issuance (Source: Sinospect); SAT: Site Acceptance Test / Installation and integrated commissioning / Performance operation / Training and handover (Source: Sinospect); Standards: Explicitly define cycle time, uptime/availability, and yield rate (Source: Business in a Box); Rectification: Allow N days for remediation of non-compliant items / Right to reject upon second failure (Source: Business in a Box); Timeframe: Within 30 days of acceptance (Source: Jiangsu Government Procurement)—Acceptance process: FAT + SAT + Quantitative standards (must precede payment).
II. Payment Terms
Standard Structure: 30% deposit + 40% pre-delivery + 20% post-acceptance + 10% warranty retention (Source: Yuanchuangli); FAT Milestone: 10–20% payment upon FAT approval (Source: feedmatch); SAT Trigger: Final payment upon successful SAT (Source: feedmatch); Invoicing: VAT special invoice provided prior to each payment (Source: Shaanxi Government Procurement); Warranty Retention: Paid in full after one year of normal operation (Source: Jiangsu Government Procurement)—Payment: 30/40/20/10 (linked to acceptance).
III.
Warranty Terms
Start Date: Earlier of 12 months from acceptance or 18 months from delivery (Source: Industry consensus); Scope: Itemized inclusions/exclusions + acceptance criteria (Source: Industry consensus); Response Time: Fault response + recovery time limits (Source: Industry consensus); Critical Spares: Inventory list + supply duration (Source: Industry consensus); Recurring Faults: Escalation mechanism + warranty retention (Source: Industry consensus)—Warranty: Start date + scope + response (must be truly enforceable).
IV.
Default Terms
Delay: Daily liquidated damages rate; Acceptance Failure: Full refund + 10% compensation (Source: APOLLO); Remedy: Right to terminate after two failed repair attempts (Source: Yaskawa); Losses: Agreed liability cap; Intellectual Property: Ownership of drawings and software—Default: Refund + compensation + termination right (specify quantifiable events).
V. Technical Documentation
Drawings: Delivery of mechanical and electrical drawings; Programs: PLC source code; Manuals: Operation and maintenance manuals; Training: Operational training and records; Spare Parts List: Detailed list of wear parts—Documentation: Drawings, programs, and manuals (to be submitted in full prior to acceptance).
VI.
Risk Mitigation
Clear Specifications: Technical specifications included as an attachment; Change Management: Approval process for design changes; Safety Compliance: ISO 12100 risk assessment (Source: TOMAS); Insurance: Insurance covering installation and commissioning; Dispute Resolution: Arbitration clause (Source: CIETAC)—Mitigation: Specification attachments and change approval processes (to minimize disputes).
VII.
Procurement Recommendations
First, define acceptance criteria strictly (FAT/SAT); second, link payments to milestones (30/40/20/10); third, establish a closed-loop warranty system (start date, scope, and response); fourth, ensure complete documentation (drawings and programs);
fifth, quantify breach consequences (refunds and compensation)—Contract: Acceptance, payment, and warranty (secured via a three-pronged approach).
