Guidelines for Islamic Modes of Finance, SBP

Delivered to the institution by the manufacturer

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Unformatted text preview: delivered to the Institution by the Manufacturer/ Supplier along with all other costs, charges, expenses and damages etc. and any other amounts paid to the Manufacturer/Supplier under this Agreement shall forthwith become due and refundable. 10. PENALTY 10.01 Where the Manufacturer/Supplier fails to deliver the Goods required to be delivered to the Institution under the Principal Documents and are not delivered by the Delivery Date, the Contract Price will be reduced by Rs.______ per day unless an extension is mutually agreed. 10.02 When any amount is required to be paid by the Manufacturer/ Supplier and is not paid by the specified date, the Manufacturer/ Supplier hereby undertakes to pay directly to the Charity Fund, constituted by the Institution, a sum calculated @ ------% per annum of the total amount payable for the entire period of default. Payment by the Manufacturer/Supplier to the Charity Fund shall be used at the absolute discretion of the Institution, exclusively for the purposes of approved charity. 10.03 In case (i) any amount(s) due under clause 10.02 above, including the amount undertaken to be paid directly to the Charity Fund, by the Manufacturer/Supplier is/ are not paid by him within the specified period, or (ii) the Manufacturer/Supplier delays the payment of any amount due under the Principal Documents and/or the payment of amount to the Charity Fund as envisaged under Clause 10.02 above, as a result of which any direct or indirect costs are incurred by the Institution, the Institution shall have the right to approach a competent Court (i) for recovery of any amounts remaining unpaid as well as (ii) imposing of a penalty on the Manufacturer/ Supplier and awarding of solatium to the Institution. In this regard the Manufacturer/Supplier is aware and acknowledges that notwithstanding the amount paid by the Manufacturer/Supplier to the Charity Fund of the Institution, the Court has the power to impose penalty, at its discretion, and from the amount of such penalty, a smaller or bigger part, depending upon the circumstances, can be awarded as solatium to the Institution, determined on the basis of direct and indirect costs incurred by the Institution, other than the opportunity cost. 11. INDEMNITIES The Manufacturer/Supplier acknowledges that in case of any breach of this Agreement the Institution may suffer losses. The Manufacturer/Supplier shall, therefore, indemnify the Institution against any expense which the Institution shall prove as rightly sustained or incurred by it as a consequence of (i) any default in payment by the Manufacturer/Supplier of any sum file:///C|/Documents and Settings/Administrator/De.../Guidelines for Islamic Modes by SBP/istisna/1.htm (8 of 11) [2/23/2008 11:58:33 PM] State Bank of Pakistan - The Central Bank under the Principal Documents when due, (ii) the occurrence of any Event of Default, and (iii) arising out of an misrepresentation 12. INCREASED COSTS If any law or regulation or any order of any court, tribunal or authority has the effect of subjecting the Institution to Taxes or changes the basis or...
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delivered to the Institution by the Manufacturer Supplier...

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