Which Clauses Decide Who Pays for a Late Coil Line?

Start With the Date You Can Actually Enforce

A delivery promise is worth nothing until it names a date both sides can measure. "Line ready in 12 weeks" is a wish. "FAT passed and packed for shipment by 14 March" is a clause.

Ask which event starts the clock. Most suppliers quote from deposit receipt rather than from order confirmation, and that difference is often two to three weeks on a first order.

On a recent enquiry the gap between order and deposit was 26 days, which pushed a February shipment into March without a single day of supplier delay.

Read the clause with a calendar in hand. If the deposit date depends on your finance committee, the supplier's schedule depends on your finance committee too.

If your deposit clears late because of an internal approval loop, the whole schedule slides and no penalty applies. That is not sharp practice; it is what the wording says.

The buyer's half of the clock matters just as much. Drawing approval, foundation drawing sign-off and utility data all sit on your side of the table.

A contract that penalises the supplier for a delay caused by your own late approval will not survive a serious dispute. Put both sets of obligations in the same table.

One Promise Hides Five Separate Dates

When a purchase order says "delivery in week 14", it is compressing four separate events into one number. Each event has a different owner and a different remedy.

Write all four into the payment schedule with dates attached. A milestone without a date is a description, not an obligation.

The FAT date deserves special attention because it is the one milestone the supplier fully controls. It should be a fixed date, not "approximately eight weeks after drawing approval".

A fixed FAT date also gives you a reason to send an engineer. Two days at the factory, acceptance sheet in hand, costs less than a week of site rework.

Book the FAT against a written test list: feed length accuracy, flatness, line speed, die protection response and a full coil change. Each item needs a pass number.

Liquidated Damages: The Number Behind the Clause

Liquidated damages convert delay into money without proving loss. The common shape in coil line contracts is 0.3% to 0.5% of contract value per week, capped at 5% to 10%.

Two numbers decide whether the clause has teeth: the weekly rate and the cap. A 0.5% rate capped at 5% gives you ten weeks of leverage.

A 0.2% rate capped at 2% gives you paperwork. On a $380,000 line the difference between those two structures is about $11,000 of exposure.

Liquidated damages only bite when the milestone is defined by evidence. Tie the clock to a dated FAT report signed by both parties, not to a promise made during a factory visit.

Keep the cap realistic. Suppliers price an uncapped penalty straight into the quotation, so you pay for protection you may never claim.

What the rate should cover

Set the weekly rate against the cost you actually carry, not against the machine price. Idle installation crew, crane hire and storage at port are the usual three.

A 40-tonne line that arrives three weeks late can easily cost $6,000 to $9,000 in standing charges before anyone mentions lost production.

Add the cost of money.

A line paid for but not producing sits on the balance sheet as working capital that returns nothing for as long as the delay lasts.

Those figures give you a defensible weekly rate. A rate pulled from a template, with no arithmetic behind it, is the first thing a supplier's lawyer attacks.

Who Owns the Risk While the Line Is at Sea

Risk transfer and cost transfer are separate questions, and FOB, CIF and DAP answer them differently. Buyers routinely assume the term with the lower price carries less risk.

For a 40-tonne line the packing specification matters more than the term. Six weeks of sea air will find every unsealed bearing and every bare machined face.

Ask for the packing list and the rust-prevention method in writing. VCI film, desiccant and sealed control cabinets cost little and prevent the most common arrival claim.

Inspect inside the survey window named in the policy. Most marine cover requires notice within three to seven days of discharge, and a late survey weakens the claim.

Photograph the crates before unloading and again afterwards. Damage that appears between those two sets of images is easy to attribute and hard to dispute.

Keep the packing list with the shipping documents. A claim for a missing control module is far stronger when the list shows it was packed.

The Costs a Penalty Clause Never Covers

A late line costs more than the delay itself, and the contract covers only a slice of it. Lost orders, idle labour and a delayed customer launch sit outside the cap.

Penalties also do not fix a machine that arrives complete but wrong. A line built for 380 V/50 Hz and shipped to a 460 V/60 Hz plant is not late. It is unusable.

Voltage, frequency, control voltage, air supply and foundation bolt pattern belong in the technical annex, not in an email thread that nobody opens in week 20.

One boundary that surprises buyers: a delay claim needs contemporaneous records. Meeting minutes, dated emails and a site log are what an arbitrator reads.

Reconstructed timelines built after the fact rarely hold, no matter how accurate they are. Ask your project engineer to keep a dated log from week one.

Four Lines to Change Before You Sign

These four edits cost nothing at signature and save most of the arguments later. Each one has been worth more to our buyers than any discount on the machine price.

• Warranty start. Count from SAT, not from shipment. A line that waits 90 days for foundations should not spend a quarter of its warranty in a warehouse.
• Acceptance criteria. Write ±0.05 mm feed accuracy at 200 SPM and 0.5 mm/m flatness into the FAT, with the test method and the gauge named.
• Spare parts pricing. Freeze the price list for five years and name a delivery window for the parts that stop the line.
• Retention. Hold 5% to 10% until SAT, and define what "SAT passed" means before the commissioning crew lands.

The wider cost model behind these clauses, from each spec line to the landed price, is mapped in the coil line guide library.

If you are still narrowing the machine itself, the line range lists the standard configurations and their footprints.