As Approved by the Silk Association of America, December 8,

Rule 1. Selling Terms shall be six per cent. ten days, sixty days dating. This means that bills are due and payable at the office of the seller, less a discount of six per cent., in seventy days from date of the invoice, the buyer having the privilege of anticipating the sixty days at the rate of six per cent. per annum within ten days from date of invoice.

Rule 2. Overdue Bills shall be paid upon the basis of a reduction in rate of discount, from the rate of six per cent. stated above, of one per cent. for each thirty days or fraction thereof beyond sixty days from date of invoice, and having become due net, shall be subject to an interest charge of six per cent. per annum.

Rule 3. Buyer's Credit. Seller may at any time alter or suspend credit when, in his opinion, the financial condition of the buyer warrants it. Williston - Section 575;

McLain, etc., Co. v. Trent Rubber Co., 275 Fed. 831. Pardee v. Kanady, 100 N. Y. 121, 2 N. E. 885; Wilton v. Berger, 196 App. Div. 121, 187 N. Y. Supp. 487; Lyonette v. K. Wilbur Dolson, 187 App. Div. 473, 175 N. Y.

Supp. 789; Melnick v. Borden, 185 N. Y. Supp. 305; Siegel v. Huebshman, 187 App. Div. 548,176 N. Y. Supp. 71.

Aff'd 230 N. Y. 571-(without opinion); Blumenthal v. Radow, 225 N. Y. 641, 121 N. E. 890; Corn Products Refining Co. v. Fasola, 94 N. J. Law 181, 109

Atl. Rep. 504.

Rule 4. Strikes and Casualties. Seller shall not be liable because of late or nondelivery due to strikes, fires or other causes beyond his control.

If by reason of any of the above causes, the production of the seller shall be partially or wholly curtailed, then the deliveries may be either proportionately or wholly suspended as the case may be, and resumed upon the removal of the difficulty and continued until the entire quantity purchased hereunder has been delivered; provided that if such delay in delivery of any portion shall be for more than 30 days, the aforesaid undelivered portion may be cancelled by the buyer, who shall, when requested by seller, state in writing whether he will elect to cancel. If the total period of delay in delivery of any portion due to any of the above causes exceeds 90 days, seller shall have the right to cancel such undelivered portion.

Davids v. Hoffman LaRoche Chemical Wks., 178 App. Div. 855, 166 N. Y. Supp. 179.1

1 See also clauses and cases cited at pages 677-680.

Rule 5. Deliveries. The acceptance of shipment by a railroad or other common carrier shall constitute a delivery.

Shipment made within two weeks after specified state of delivery shall constitute good delivery.

Where deliveries are specified to be made in or during several calendar months, each month's deliveries shall constitute a separate contract, and any installment of merchandise or part thereof delivered shall be paid for in accordance with the terms of this contract, regardless of claims by either party relating to any other delivered or undelivered merchandise.

Where agreed delivery dates cover several months, without stating specific quantity for each month, the delivery shall be deemed good only if made in substantially equal parts for each month specified.

Rule 6. Time Limit on Claims. Goods shall not be returned or allowance made after ten days from date of receipt by customer, nor after having been cut ox, otherwise changed from original condition, except for defects not ascertainable at the time of delivery.

Rule 7. Price Readjustment. Discounts or rebates shall not be made or contract price readjusted except for causes as per these rules.

Rule 8. Replacement Any goods rejected for proper cause must be replaced by seller and replacement accepted by buyer, except as hereinafter provided. Replacement must be made within 15 days after rejection has been agreed to by seller, or the right of the buyer to reject has been established by arbitration, if so ordered by the arbitrators; but where for any reason it is impossible for the seller to replace goods except at great difficulty or expense, the matter shall be determined by adjustment or arbitration in accordance with the rules of The Silk Association of America.

Rule 9. Warranties or Modifications. No warranties or modifications of contract shall be binding on either party unless in writing and signed by the party to be charged.

Rule 10. Confirmations. Orders placed with salesmen will not be binding on seller until accepted or confirmed by seller in writing.

Altkrug v. Whitman, 186 App. Div. 744,173 N. Y. Supp. 669.

Rule 11. Assortments. Where a contract covers the sale of goods, in which colorings, designs and assortments are not determined at time of sale, seller will submit colorings and designs for acceptance from which buyer agrees to furnish assortments or make selection, but failure of buyer to assort within a specified time will not release buyer from his contract.

Mosler Safe Co. v. Brenner, 100 Misc. 107, 165 N. Y. Supp. 336;

Crown v. Chiariello, 106 Misc. 511,175 N. Y. Supp. 167.

Rule 12. Deferred Deliveries. All goods in hands of seller either finished or in the gray at contract date of delivery and delivery of which is delayed by fault of buyer by reason of failure to furnish assortments, refusal to accept, or otherwise, may be billed at contract price and held at risk of buyer for delivery upon his order.

Rule 13. Adjustment and Arbitration. Disputes between seller and buyer arising from contracts based on these rules, shall be submitted to the Bureau of Adjustments and Complaints of The Silk Association of America. If an adjustment cannot thus be effected the matter must then be submitted to an Arbitration Committee composed of three members, one to be nominated by the buyer, one by the seller and these two shall select a third. One of the arbitrators must be an official arbitrator of The Silk Association of America and the arbitration shall be in accordance with the rules of such Association. The award shall be final and binding upon both parties.

Arbitration Law of the State of New York, Laws of 1920, Chapter 275;

Spiritusfabriek v. Sugar Products Company, 230 N. Y. 261, 130 N.E.288;

In re General Silk Importing Company Inc., 198 App. Div. 16,189 N. Y. Supp. 391.1

1 See also arbitration clauses and cases cited at pages 1-8.