The CTS Companies Standard Terms & Conditions
“Contractor” means Canada Tank Solutions, Inc., CTS (Canada) Inc., Canada Tank Solutions USA, Inc., CTS Global Systems, Progressive Millwrights, or CTS Fabrication Limited.
“Company” means the person or entity entering into a contract with, or giving a purchase order to, Contractor for the structure or equipment.
“Structure” means only that portion of a facility required to be furnished or worked on by Contractor in accordance with the contract or purchase order signed by Company.
“Equipment” means all equipment, machines, parts, components and/or spare parts, to be delivered as stipulated within the Contractor’s scope of supply, that are necessary to complete the scope of the Contract.
“Contract” means the contractual undertaking between Contractor and Company in accordance with the proposal made by Contractor, the specifications, the order or contract form signed by Company, and all other documents incorporated by reference therein. All such documents are to be considered as complementary to each other but, in case of conflict between provisions in two or more such documents, the documents shall govern in the following order: (1) Sections M, N, O and P of these General Contractual Conditions, (2) the proposal, (3) the order or contract form, (4) the project specifications, (5) these General Contractual Conditions other than Sections M, N, O and P, and (6) any other documents incorporated by reference in any of the foregoing, in the order of precedence of the documents in which such references are made. The Contract is intended by Contractor and Company as a final expression of their agreement with respect to such terms as are included therein and also as a complete and exclusive statement of the terms of the agreement.
Section A – DESIGN
A1 If working drawings are furnished by Company, Contractor may change details to conform to Contractor’s standards of fabrication and construction. Any such changes will be shown on the plans submitted to Company for approval before fabrication.
A2 Company may request changes subject to mutual agreement and with an appropriate adjustment in price and delivery.
A3 Company shall indemnify, defend and hold harmless Contractor against any consequence of any error or deficiency in any provision of the specifications, plans, or drawings, furnished by Company or any of its agents.
A4 In order to use available sections or material, Contractor may substitute equivalent sections or material and vary plate widths and lengths from those stated in the proposal or applicable specifications and drawings.
A5 The basis of the design is set forth in the proposal. The cost of any changes required by any governmental authority shall be borne by the Company.
A6 Structures and specified accessories supplied by Contractor will comply with applicable safety and health laws as amended to date of proposal. Company will be responsible for specifying items required by law which depend upon the particular service or operating methods of the Company or final owner.
Section B - FABRICATION
B1 This section applies only to fabrication by Contractor under the Contract.
B2 When construction is not included in the Contract, no claim will be allowed on account of errors in shop work or difficulty experienced in assembling the material during construction unless Contractor is notified in writing in ample time to send a representative (at Contractor’s option) to determine the validity of any such claim before charges are incurred.
B3 Welding electrodes and erection tools or supplies will be furnished by Contractor only if construction by Contractor is included in the Contract.
B4 If at Company’s request Contractor agrees to work more than the standard day or week, the additional cost resulting from such overtime work including loss of efficiency shall be added to the contract price.
Section C - CONSTRUCTION
C1 This section applies only to construction by Contractor under the Contract.
C2 Company shall provide a clear and open space adjacent to the construction site adequate for receiving and storing material and construction equipment.
C3 Company shall provide and maintain an unobstructed roadway to and access around the construction site for each structure suitable for heavy trucks, tractors and construction equipment.
C4 Company shall furnish water at adequate pressure for construction purposes at the job site.
C5 Company shall, before construction is started and without cost to Contractor, remove or make safe any conditions at the construction site which present a safety hazard to workers or equipment, including but not limited to electric or telephone wires,
pipelines, flames, smoke, flammable gases, fumes, steam, poisons, asbestos, hazardous or toxic chemicals and hazards from other contractors working above or below the construction work. As a safety precaution, Contractor’s construction forces do not
operate hoisting equipment or install rigging within 15 feet of live electric power lines of 220 volts or greater.
C6 Company shall keep the site area well-drained at all times.
C7 Special construction procedures or devices may be required to protect Contractor’s employees from the work of others or to protect employees of others from the work of Contractor in order to comply with applicable safety and health laws as amended. Except as otherwise stated in the proposal, the cost of providing such special construction procedures or devices will be borne by Company.
C8 Company shall secure without cost to Contractor all permits and licenses required before construction is started. Contractor will furnish Company descriptions of the structure that may be necessary to obtain such permits or licenses. Any permits or licenses required to qualify Contractor to perform the field construction work will be the responsibility of Contractor.
C9 It shall be the responsibility of Company to determine the applicability of air safety regulations regarding notices to any governing aviation agency, warning beacon lights and special painting for air traffic, and otherwise to comply will all such regulations. Unless otherwise stated in the proposal, the giving of required notices, furnishing and installation of warning beacon lights, special painting for air traffic and other action required by the regulations are not included.
C10 If Company requests Contractor to work more than the standard day or week, the additional cost resulting from such overtime work including loss of efficiency shall be added to the contract price.
C11 Upon completion of the construction, unless noted otherwise in the proposal, Contractor will remove or dispose of all scrap construction materials caused by the operations of the Contractor. Company shall arrange for the safe and proper removal,
transportation and disposal of any hazardous wastes and asbestos.
Section D – FOUNDATIONS
D1 Unless otherwise stated in the proposal, Company shall furnish the foundations, including grouting, or grade or other supports and shall assume full responsibility for the adequacy and accuracy of the foundations or grade or supports. Company shall fill in all excavations, level the grade, and remove all obstructions in the vicinity of the construction site before construction is started. Contractor will supply anchor bolts only when so specified in the proposal.
D2 Unless listed in the Contractor’s proposal, Company shall assume full responsibility for the bearing capacity of the soil upon which the structure or the foundation is supported. Any damage to the foundations or structures caused by failure of the soil to support the loads upon it shall be repaired at no cost to Contractor.
D3 If the structure or any part of it is to be constructed inside of or upon an existing building or supports, Company shall assume full responsibility for the ability of the building or supports to sustain the loads to be imposed. Any damage to the building or supports, to the structure, or to any part thereof, because of the inability of the building or supports to support these loads, shall be repaired at no cost to Contractor.
D4 Foundations shall be constructed to tolerances which permit proper erection of the structure without excessive shimming or leveling.
D5 When the foundations are to be designed or built by Contractor, Company shall provide a subsurface investigation report by a soils engineer, specific to the Structure site, or where applicable, multiple Structure sites, providing sufficient information for Contractor to design and build such foundations. When conditions are found that differ from those contemplated in the proposal or shown on the subsurface report or result from inadequate prior subsurface investigation including but not limited to requirements for well-pointing or piling or wet or rock excavation, the price and delivery schedule shall be appropriately adjusted. All costs for obtaining adequate subsurface investigation and modification in design or construction because of subsurface conditions not disclosed by or which are varying significantly from those assumed or given in the prior subsurface investigation report shall be for the account of the Company.
Section E - WELDING
E1 All welding procedures and methods shall be consistent with the governing specifications or codes although Contractor may select the procedure or method from available options.
E2 Examination of the welded joints will be made as the work progresses in accordance with the applicable code or specification although Contractor may select the method of examination from all available options.
E3 Welding procedures and welding operators will be qualified in accordance with AWS or CWB.
Section F-PAINTING, COATING, LINING, OR INSULATING
F1 Painting, coatings, linings or insulation are included only when specified in the proposal.
F2 If weather conditions are unsuitable for application of paints, coatings, linings or insulation at the time the Structure has been completed and satisfactorily tested, the Structure shall be accepted by Company as complete without such painting, coating, lining or insulating, subject to the retention by the Company of a reasonable sum from the contract price to cover the cost of painting, coating, lining or insulating until such time as Contractor complete the painting, coating, lining, or insulating.
F3 If shop applied paints, coatings, linings or insulation are supplied by Contractor and finish applications are not included in Contractor’s field erection portion of the proposal, then any cleaning, patching or re-application of paints, coatings, linings or insulation along the field erected joints, and any other areas, are not included in the work of Contractor.
Section G – TESTING
G1 This section relates to testing in accordance with the governing specifications or applicable codes. If no test is required, this section shall not apply.
G2 If the structure and foundations have been designed for a hydrostatic test load, the structure shall be tested by filling it with water immediately upon completion. In other cases, test methods as described in the proposal or as may be agreed upon between Company and Contractor shall be followed.
G3 When hydrostatic test is required, Company shall promptly furnish all required pipe, hose and fittings, make all connections, fill with sufficient water and dispose of water upon completion of test, all without cost to Contractor. The Company shall be responsible for any corrosion or any other attack caused by the test water. Contractor will furnish the proper test gauges and will apply a required test pressure to pressure vessels.
G4 If water is not available for testing, the structures shall be tested by tightness by means of a vacuum box tester, a penetrating oil test, or such other test method as may be agreed upon between Company and Contractor. The cost of such alternative testing will be for Company’s account.
G5 For pressure vessels, Company shall provide test water at a temperature not lower than 60F.
G6 Any interconnected construction, piping, or equipment not furnished by Contractor shall be disconnected from the structure by Company prior to test.
G7 While the structure is undergoing test, Company shall abide by and help enforce any safety precaution deemed by Contractor to be necessary for the safe conduct of any required test.
G8 Dry Bulk Silos – Either an exterior spray test or a smoke test shall be performed by tank erection crew at time of assembly completion. Sufficient water supply, hose and water disposal is by customer (1” to 1-1/2” fire hose with a fog nozzle; 30 psi to 50 psi water pressure; 40 GPM to 60 GPM water volume) is required for the exterior spray test.
G9 Liquid Tanks – Installation price quoted includes a water leak test. Customer to provide sufficient water to fill the tank within 24 hours. Sufficient water supply, hose and water disposal is by customer. Disinfection is not included. If installation process,
including final test, cannot be performed in one trip, remobilization cost will be at customer expense.
Section H – DELAYS
H1 Contractor shall not be liable for any delay or default in performance of any provision of this Contract when such delay or failure is due to any cause beyond Contractor’s reasonable control and without its fault or negligence, including but not limited to: acts of God or the Owner or the public enemy; civil disturbances, arrests and restraints by rulers and people; war, terrorism (including cyber), riots, insurrections, sabotage; acts, requests or interruptions of the federal, state or local government or any agency thereof; present and future valid orders of any court or other governmental authority, or any officer, agency or any instrumentality thereof; changes in laws, rules or regulations or the interpretation thereof; floods, fires, storms, hurricanes, epidemics, landslides, lightning, earthquakes, washouts, explosions, quarantine; conditions or obstructions at the jobsite which differ from those disclosed in this Contract; strikes, lockouts, or industrial disturbances; interruption of transportation, freight embargoes or delays in delivery of equipment or services necessary to the performance of any provision of this Contract; inability to secure right of way, labor shortages, breakage or accident to machinery or lines of pipe, or any other cause, whether of the kind herein enumerated or otherwise, not within Contractor’s reasonable control. The Contract Price and Schedule shall be equitably adjusted for the impact of any force Majeure event. Nothing contained in this paragraph shall be construed to require Contractor to settle a labor dispute against its will. If as a result of force majeure Contractor is unable, wholly or in part, to perform its obligations under this Contract, other than the obligation to make payment of money due, then, upon Contractor’s giving written notice and a description of such cause to the Owner promptly after the occurrence of the cause, the obligation of Contractor, so far as it is affected by the cause specified in the notice, shall be suspended for the duration of the cause. Should a Force Majeure delay arise greater than (180) days, both parties have the right to seek termination in a manner respective of Contractual obligations.
Section I - PAYMENTS
I1 Payment shall be made as specified in the proposal, without cost to Contractor for collection. Payment shall be made by electronic funds transfer, as directed by Contractor. Amounts not paid by either party when due hereunder shall bear interest from and after the date payment was due to and including the date of payment at a rate per annum equal to the prime rate on the first day of the month as published in the Wall Street Journal, plus three and one-half percent (3.5%), or at the maximum rate permitted by applicable law, whichever is less.
I2 Upon default of Company in making any payment when due or in carrying out any of the conditions of the Contract, the entire Contract price shall, at the option of the Contractor upon giving written notice to Company, become due and payable.
I3 No change in the work or extra work agreed to by Company and Contractor shall relieve any guarantor or surety of any of its obligations.
I4 In the event any delay extends beyond sixty (60) days, then the full value of the work completed at the time of commencement of the delay, including funds, previously withheld, shall thereupon become due and payable.
I5 Unless Contractor’s documentation notes otherwise, freight, storage, insurance and all taxes, customs duties or other governmental charges relating to the Contract shall be paid by Company. If Contractor is required to pay any such charges, Company shall immediately reimburse Contractor upon receipt of invoice.
Section J - TAXES
J1 Unless otherwise stated in the proposal, sales taxes, use taxes, gross receipts taxes, value added taxes and other similar taxes and charges imposed on Contractor or Company with respect to the structure furnished under these contractual conditions or
the material therefor will be for the account of Company and will be invoiced as additions to the price quoted for that structure.
Section K - INDEMNITY
K1 The Contractor agrees to indemnify Company against all claims and demands for injuries to persons, including deaths resulting therefrom, and damage to property occurring during the course of the construction of each Structure which Contractor furnished under these General Contractual Conditions to the extent negligence or other breach of legal duty on the part of Contractor is the cause of such injuries, deaths or damage provided that: a) the maximum liability of Contractor under the foregoing indemnity shall not exceed one million Canadian dollars (CAD $1,000,000) in the aggregate unless otherwise stated in the proposal; and b) the foregoing indemnity shall not diminish any protection offered Contractor pursuant to any insurance carried by Company which provides coverage for Contractor.
K2 Contractor agrees to indemnify Company against liability or expense which Company may incur on account of actual or alleged infringement of any apparatus claim of any patent by any structure furnished by Contractor under these contractual conditions if such infringement is attributable to design furnished by Contractor, provided that:
a) The maximum liability of Contractor shall not exceed the Contract price for such structure minus a reasonable depreciation for the period of use of the structure;
b) Contractor may satisfy its entire obligation under this subsection by altering such structure so as to eliminate infringement or by replacing that structure with a non-fringing structure;
c) Company gives prompt notice to Contractor of any charge or suite alleging infringement by such structure, permits attorneys selected and paid by Contractor to defend any such suit on behalf of Company and cooperates with Contractor in the trial of such suit and in preparing therefor.
Section L - WARRANTY
L1 No warranty is provided unless expressly written in Contractor’s proposal.
MISCELLANEOUS STRUCTURE CONTRACTUAL CONDITIONS
Sections M, N, and O of these General Contractual conditions, as modified by the proposal, are applicable only to the structures or work described in those sections respectively.
Section M - BOLTED TANKS
M1 The structure shall consist of a bolted steel tank as shown in the plan accompanying the proposal.
M2 The bottom plates shall be laid directly on the grade or foundation and bolted together thereon.
M3 If a stairway or a fixed ladder is provided, it shall be designed in accordance with OSHA safety regulations.
M4 If a grade is provided by Company under the tank, it shall be furnished and maintained level by Company. If a concrete foundation is provided by Company under the tank, it shall be level within plus or minus one-eighth inch within any thirty feet of arc length, and no two points on the periphery shall differ in elevation by more than one-half inch.
M5 Unless otherwise stated in the Proposal, Company shall assume full responsibility for the design and adequacy of any dikes and containment systems which may be required in connection with the tanks.
M6 If cathodic protection apparatus is included in the proposal, Company shall provide the power outlet, together with a fused weatherproof switchbox, within twenty feet of the tower column on which the conduit is to be located.
Section N - FLAT BOTTOM FIELD WELDED STORAGE TANKS
N1 The bottom plates shall be laid directly on the grade or foundation and welded together thereon. Lap joints shall be used with continuous welding on the upper side only.
N2 When a steel roof of fixed type is furnished, it shall be welded on the upper side only with lap joints.
N3 If a stairway or a fixed ladder is provided, it shall be designed in accordance with OSHA safety regulations.
N4 If a grade is provided by Company under the tank, it shall be furnished and maintained level by Company. If a concrete foundation is provided by Company under the tank, it shall be level within plus or minus one-eighth inch within any thirty feet of arc length, and no two points on the periphery shall differ in elevation by more than one-half inch.
N5 Unless otherwise stated in the Proposal, Company shall assume full responsibility for the design and adequacy of any dikes and containment systems which may be required in connection with the tanks.
Section O - REPAIR WORK AND NEW WORK IN AN EXTRA HAZARDOUS AREA
O1 This section covers all work (whether new, alterations, repairs or otherwise) performed in an extra hazardous area, all field repairs, alterations or extensions of existing structures and all work by Contractor upon structures not originally furnished by Contractor.
O2 Structures that have been used in certain types of storage and processing service present unusual safety hazards to personnel in the work area. Company shall physically disconnect all such structures from existing piping before Contractor undertakes any work. Unless cleaning is specifically stated to be part of the work covered by the proposal, Company shall clean the structure and free it from any toxic or hazardous substances, including but not limited to asbestos, shall maintain the work area entirely free of explosives, combustible, toxic, asphyxiant and hazardous substances at no cost to Contractor and shall sign a safe work order on usual form provided by Contractor for that purpose before any work is commenced by Contractor.
O3 Before work is commenced on an existing structure Company shall furnish to Contractor a complete set of “as built” drawings of the structure, and also a statement of the age of the structure, the service in which it has been used, the nature and extent of repairs, modifications and extensions contemplated, the test, if any, to be performed upon completion of work, and the proposed service of the structure after completion of work.
O4 Unless so stated in the proposal, testing is not included in the work to be done by Contractor. If the proposal includes testing, then Section G of these General Contractual Conditions shall apply.
O5 Section K does not apply to work covered by this Section O. Company must take fully responsibility for the conditions of the structure prior to the commencement of work, the nature and extent of the work, the removal and making safe to Contractor’s
satisfaction of any toxic or hazardous substances or materials, including but not limited to asbestos, which may be discovered during performance of the work or which may adversely affect the safe performance of the work, the adequacy of the structure to meet Company’s needs upon completion of work and for the type and severity of any test to be imposed upon the structure upon completion of work. This responsibility of Company shall also include the effects of prior use (such as distortion, corrosion, and abrasion) upon structural adequacy, and the effects of any proposed changes in operating conditions (such as pressure, temperature, chemical and electrolytic properties of the product to be transported, stored, or processed) upon the suitability of the structure upon completion of work for the service intended.
O6 Company shall either buy builder’s risk insurance or keep the structures affected by the work being performed covered by all risk insurance, in either case with Contractor as a named insured on the policy and which provides primary coverage of not less than the full fair market value of the structures affected by the work performed, and such coverage shall waive all rights of subrogation against Contractor. Company shall assume all deductible amounts and shall furnish evidence of such coverage to Contractor. Company assumes the risk and waives any right of recovery (including subrogation) against Contractor for any loss of, damage to or loss of use of any Company’s property. The foregoing assumption and waiver shall apply to the full extent permitted by law and regardless of fault or negligence of Contractor.
O7 Without limiting any of the liabilities of Company hereunder, Company shall also keep in effect a Commercial General Liability insurance policy with combined single limits not less than $5,000,000 per occurrence. Such policy shall name Contractor as an
additional insured and will provide primary insurance, non-contributing with any other valid insurance or self-insurance coverage to the Contractor. Company shall assume all deductibles under such insurance.
O8 With respect to any work covered by this Section O, CONTRACTOR MAKES NO WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY OF ANY KIND, EXPRESS OR IMPLIED. The foregoing
limitation of liability shall apply to the full extent permitted by law and regardless of fault on the part of Contractor.
1. ADDITIONAL CONTRACTUAL CONDITIONS
The following shall apply to all work performed by or on behalf of Contractor.
Section P - CONSEQUENTIAL AND OTHER DAMAGES
P1 Notwithstanding anything to the contrary in this Contract, Contractor and its subcontractors and vendors of any tier and their respective affiliates and the directors, officers and employees of each shall not be liable for consequential, special, indirect, incidental, remote or punitive loss, cost or damage or any loss of use, profits, reputation, opportunity, financing, bonding capacity, product or production, or business interruption, and the cumulative aggregate liability of all of them for any other loss, cost or damage arising from or relating in any way to the Project or the Work shall be limited in the aggregate to an amount equal to the total compensation received by Contractor hereunder, and Owner releases and waives all claims for same in excess thereof. The provisions of this Section shall apply REGARDLESS OF WHETHER THE LIABILITY ARISES IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE, WHETHER ACTIVE, PASSIVE, SOLE, JOINT OR CONCURRENT) STRICT LIABILITY, PRODUCTS LIABILITY,
PROFESSIONAL LIABILITY, INDEMNITY, and CONTRIBUTION OR ANY OTHER CAUSE.
Section Q - DELIVERY
Q1 Delivery of any equipment shall be in material compliance with the schedule in Contractor’s Documentation and may include partial shipments. Unless Contractor’s Documentation provides otherwise, delivery terms are F.O.B. Contractor’s facility. All shipping terms per Incoterms 2010. Unless otherwise provided, packing of the equipment shall be in accordance with Contractor’s normal standards.
Section R – TITLE & OWNERSHIP
R1 Title. Title to the equipment and risk of loss or damage shall pass to Company at the designed delivery point, except that a security interest in the equipment, proceeds any replacement shall remain with Contractor until full payment of the purchase price,
and any additional amounts, have been paid to Contractor.
R2 Ownership of Materials. All devices, designs (including drawing, plans and specifications), estimates, prices, notes, electronic data and other documents or information prepared or disclosed by Contractor, and all related intellectual property rights, shall remain Contractor’s property. Contractor grants Company a non-exclusive, non-transferable license to use any such material solely for Company’s use of the equipment as intended (see the proposal and/or specifications), specifically installing, operating, maintaining and repairing the equipment. Company shall not disclose any such material to third parties without Contractor’s prior written consent