General Terms and Conditions of Purchase
1. Acceptance – Order of Precedence – Modification
These terms and conditions (“T&Cs”) are for the purchase of goods, services or goods and services described on the face of this document (collectively, “Goods”) and are issued by the purchasing entity identified on the face of this document (“Purchaser”) to the entity providing the Goods identified on the face of this document (“Supplier”). Purchaser rejects any additional or inconsistent terms or conditions offered by Supplier at any time and irrespective of Purchaser’s acceptance of or payment for Supplier’s Goods. Any reference to Supplier’s quotation, bid or proposal will not be deemed acceptance of any term, condition, or instruction contained in that document. No course of prior dealing or usage of the trade will be used to modify, supplement or explain any term herein. These T&Cs together with the specifications, drawings, or other documents executed between the parties, or any documents incorporated by reference, supersede any prior communications, representations, promises, or negotiations, whether oral or written, with respect to the subject matter of the Agreement. All contract documents related to these T&Cs are to be interpreted together as one agreement. However, if there is an irreconcilable conflict among the provisions of those contract documents, the following order of precedence applies: (a) any master agreement between the parties; (b) contract for labor services; (c) these T&Cs and any supplemental terms included or incorporated by reference; and (d) other contract documents agreed to in writing by the parties. These T&Cs shall not be changed or modified unless through a written amendment executed between the parties, specifically identifying that it is amending these T&Cs. If Supplier becomes aware of any ambiguities, issues or discrepancies between any existing contracts and/ or these T&Cs and any applicable specification, design or other technical requirement, Supplier will immediately submit the matter to Purchaser for resolution.
2. Delivery, Shipment and Packaging
2.1. Supplier will deliver Goods in accordance with the quantities, date(s), shipment locations and any other terms specified by the Purchaser. If delivery dates are not stated, Supplier will offer its best delivery date(s), which will be subject to acceptance by Purchaser. Unless otherwise directed, all Goods shipped in one day from and to a single location must be consolidated on one bill of lading or air waybill, as appropriate.
2.2. Supplier will, at its expense, deliver Goods by the most expeditious shipping method if the delivery schedule is endangered for any reason other than Purchaser’s fault. If Goods are delinquent to Purchaser’s requirements, Supplier will grant Purchaser first preference for Goods allocation and shipment. Purchaser reserves the right to reject, at no expense to Purchaser, all or any part of any delivery that varies from the quantity authorized by Purchaser for shipment. Supplier will not make any substitutions without Purchaser’s prior written approval. All items will be packaged in accordance with Purchaser’s instructions or, if none are specified, in accordance with good commercial practice in a manner sufficient to ensure receipt in an undamaged condition. As applicable, Supplier will ensure that all packaging conforms to the country of destination’s adoption of the ISPM15 solid wood packaging requirements, whether or not expressly indicated by Purchaser, and will designate conformance on the appropriate shipping documents. Purchaser reserves the right to charge the Supplier for any costs or damages incurred by Purchaser as a result of Supplier’s failure to comply with the applicable solid wood packaging requirements. Purchaser will not be liable for any discharge, spill or other environmental incident (including clean-up costs) involving any Goods shipped, until received by Purchaser. All containers will be properly marked for identification per the instructions of the Purchaser and contain a packing slip that details, at a minimum, the order number, product part number, detailed product description, total number of boxes in shipment, quantity of product shipped, and final delivery address. Items shipped in advance of Purchaser’s delivery schedule may be returned at Supplier’s expense. For domestic shipments, if requested by Purchaser, and for all international shipments, Supplier will give notice of shipment to Purchaser when the Goods are delivered to a carrier for transportation. The order number(s) must appear on all correspondence, shipping labels, and shipping documents, including all packing sheets, bills of lading and air waybills.
2.3. All Goods, unless specifically exempted by the destination country’s governing authorities, must be marked with the country of origin (manufacture) of the Goods in a conspicuous place as legibly, indelibly, and permanently as the nature of the article or container permits.
2.4. Supplier will provide Purchaser with (a) the Harmonized Tariff Schedule number, country of origin information or certificates, manufacturer’s affidavits, applicable free trade agreement (“FTA”) certificates, and any other documents or information Purchaser may require to comply with international trade regulations or to lawfully minimize duties, taxes, and fees, and (b) FTA certificates for all Goods that qualify under one or more FTAs. Supplier will provide Purchaser all documents, records, and other supporting information necessary to substantiate the Goods’ qualification under such FTA. Supplier will exert reasonable efforts to qualify the Goods under FTAs.
2.5. Within one business day after Supplier delivers the Goods to the carrier, Supplier will send Purchaser a complete set of shipping documents including the commercial invoice, packing list, and air waybill or three original parts of the combined through bill of lading, clean without notation, necessary to release the Goods to Purchaser’s custody.
3. Notice of Delay
Whenever anything delays or threatens to delay the timely performance, Supplier must immediately give notice to Purchaser of all relevant information with respect to such delay.
4. Excusable Delay (Force Majeure)
Any delay or failure of either party to perform its obligations shall be excused if and to the extent that the party is unable to perform due to Acts of God, restrictions, prohibitions, priorities or allocations imposed or actions taken by a governmental authority, or acts of war. Supplier’s ability to sell Goods at a more advantageous price or Supplier’s economic hardship in buying materials or processing necessary for manufacture of the Goods will not constitute an excusable delay event. The party affected by an excusable delay will promptly provide notice to the other, detailing the particulars and expected duration of the excusable delay, and will use its best efforts to remedy the delay if it is capable of being remedied. If Supplier’s delivery is delayed, Purchaser may, at Purchaser’s sole option, cancel deliveries that had been scheduled during the excusable delay period or elect to extend the period of performance commensurate with the excusable delay period. If an excusable delay occurs that affects delivery of Goods to Purchaser, Supplier will allocate its available supply of Goods in a manner that assures Purchaser of at least the same proportion of Supplier’s total output of Goods as was allocated to Purchaser prior to the excusable delay event. If delivery of any Goods is delayed for more than 30 days, Purchaser may, without liability, cancel all or any part of the purchase order. In addition to the termination right set forth in the preceding sentence, Purchaser shall have the right, at its sole election, to procure Goods from an alternate source until Supplier is again able to provide such Goods. Purchaser shall continue to pay Supplier for conforming Goods actually provided by Supplier and received by Purchaser, less any amounts payable by Purchaser to the alternate source for alternate Goods, but Supplier shall not be entitled to any additional payments as a result of the Force Majeure event.
5. Performance Assurance Plan
If Purchaser, in its sole discretion, determines there is a significant risk that Supplier will fail to meet its performance or delivery requirements, Purchaser may require Supplier to perform under a Purchaser Performance Assurance Plan. The Performance Assurance Plan may include specific reporting and performance requirements reasonably tailored by the Purchaser to ensure Supplier’s adequate performance as identified under the provisions of these T&Cs. Any failure by Supplier to satisfy the terms of the Performance Assurance Plan is a material breach of these T&Cs.
6. Shipping Terms, Title and Risk of Loss
6.1. Unless otherwise specified by the Purchaser, Supplier will deliver the Goods DAP (Incoterms®2020) at Purchaser’s location. Title to Goods passes to Purchaser upon receipt at Purchaser’s location.
6.2 The foregoing does not relieve Supplier of any responsibility for hidden damages discovered after acceptance of the Goods. Notwithstanding 6.1 above, title and risk of loss to Goods subject to a consignment stock agreement pass upon release of the Goods from the consignment stock. Purchaser may direct Supplier to ship the Goods to Purchaser or to any third party designated by Purchaser.
7. Import/Customs Compliance
Unless otherwise specified by Purchaser, Supplier assumes all responsibility and liability for any shipments requiring any government import clearance. If government authorities declare or otherwise impose countervailing duties, antidumping duties, or retaliatory duties on the imported Goods, Purchaser reserves the right to terminate any agreement between the parties or cancel the order in accordance with the Termination provisions of these T&Cs. Supplier will be debited for any duties, fees, or freight incurred by Purchaser due to Supplier’s failure to comply with these T&Cs.
All drawback of duties, and rights thereto, related to duties paid by Supplier or Purchaser upon importation of the Goods or any materials or components that enter into the manufacture of the Goods will accrue to the exclusive benefit of Purchaser. Such duty drawback rights include rights developed by substitution and duty drawback rights obtained from sub-tier suppliers related to the Goods. Supplier will provide Purchaser with all documents, records, and other supporting information necessary to obtain any duty drawback and will reasonably cooperate with Purchaser to obtain payment.
9. Purchaser-Supplied Materials, Tooling, Equipment and Technical Data
9.1. Title to any material, tooling, equipment or technical data that Purchaser pays for or provides to Supplier, including replacements thereof (“Purchaser Property”), will remain or vest with Purchaser. Supplier will conspicuously label Purchaser Property as such, maintain it in good condition, keep written records of the Purchaser Property in its possession and the location of such property, not allow any liens to be placed upon it, and not change its location without prior written approval from Purchaser. Supplier is responsible for inspecting and determining that the Purchaser Property is in useable and acceptable condition.
9.2. Supplier will use Purchaser Property exclusively for the performance of its duties unless otherwise authorized in writing by Purchaser’s authorized representative. Purchaser Property is intended for use at the Supplier’s site only or as otherwise authorized in writing by Purchaser’s authorized representative and, to the extent applicable, is subject to U.S. and other government export or re-export requirements. Supplier is responsible for any loss, damage or destruction of Purchaser Property and any loss, damage or destruction of any third-party property resulting from Supplier’s negligent use of Purchaser Property. Supplier will not include the cost of any insurance for Purchaser Property in the prices charged. Supplier will return Purchaser Property or dispose of it at Purchaser’s sole option in accordance with Purchaser’s written directions. Supplier shall deliver to Purchaser written certification of its compliance with this section 9.2 signed by an authorized representative of Supplier. Purchaser makes no representations and disclaims all warranties (express or implied) with respect to Purchaser Property.
Supplier will furnish the Goods at prices agreed between the parties. If prices are not stated, Supplier will offer its lowest prices subject to written acceptance by Purchaser. Unless otherwise provided, the prices include all packaging, applicable taxes and other government charges including, but not limited to, all sales, use or excise taxes, and all customs duties, fees or charges. To the extent that value added tax (or any equivalent tax) is properly chargeable on the supply to Purchaser of any Goods, Purchaser shall pay such tax as an addition to payments otherwise due to Supplier, provided that Supplier provides to Purchaser a value added tax (or equivalent tax) invoice, unless Purchaser or Purchaser Affiliates provide a tax exemption certificate or other evidence of their tax exempt status. Tax based upon or calculated by reference to income, receipts or capital or withholding taxes shall be the sole responsibility of the Supplier.
11. Price: Most Favored Customer and Meet or Release
Supplier warrants that the prices charged for the Goods are the lowest prices charged by Supplier to any of its external customers for similar volumes of similar Goods. If Supplier charges any external customer a lower price for a similar volume of similar Goods, Supplier must notify Purchaser and apply that price to all Goods ordered by the Purchaser. If, at any time prior to full performance by the Supplier of its duties under these T&Cs, Purchaser notifies Supplier in writing that Purchaser has received a written offer from another supplier for Goods similar to those to be provided by the Supplier and at a price lower, Supplier is obligated to immediately meet the lower price for any undelivered Goods and all future transactions. If Supplier fails to meet the lower price then Purchaser, at its option, may terminate the balance of the order/ transaction without liability.
12. Invoicing and Payment
No later than seven (7) days, or as otherwise agreed between the parties, from each shipment made or service provided, Supplier must submit an invoice, as well as email a copy, listing a description of the Goods provided and, as applicable, part numbers, quantity, and unit of measure, hours, and the unit and total prices along with the purchase order number issued by the Purchaser. Purchaser has no obligation to pay an invoice in the absence of a purchase order or if an invoice is not received within seven (7) days or any such time agreed between the parties. Any incidental charges such as royalties, selling commissions, non-recurring engineering, import duties, taxes, or other incidental charges must be separately itemized and identified on the invoice. The invoice must also include the following information in English, or in the destination country’s official language if required: (a) name and address of Supplier and the Purchaser entity purchasing the Goods; (b) name of shipper (if different from Supplier); (c) Purchaser’s purchase order number(s); (d) country of export; (e) detailed description of the Goods; (f) Harmonized Tariff Schedule number; (g) country of origin (manufacture) of the Goods, or if multiple countries of origin, the country of origin of each part shipped; (h) weights of the Goods shipped; (i) currency in which the sale was made; (j) payment terms; (k) shipment terms used; and (l) all rebates or discounts. The invoice will be accompanied (if applicable) by a signed bill of lading or express receipt evidencing shipment. Payment of an invoice does not constitute acceptance of the Goods and is subject to appropriate adjustment should Supplier fail to meet the requirements of these T&Cs. Payment terms are net 120 days from receipt of invoice and conforming Goods unless otherwise stated by the Purchaser or other written agreement executed by both parties. Payment will be scheduled for the first payment cycle following the net terms specified by the Purchaser.
Purchaser may deduct any amount owing from Supplier to Purchaser as a setoff against any amount due or owing to Supplier.
14. Quality Assurance.
Supplier agrees to allow Purchaser, during normal business hours, to make reasonable inspections of the facilities where Supplier and its sub-tier suppliers manufacture or process the Goods.
15.1. All Goods may be inspected and tested by Purchaser, its customers, higher tier contractors, and end users at all reasonable times and places. If such inspection or testing is made on Supplier’s premises, Supplier will provide, without additional charge, all reasonable facilities and assistance required for such inspections and tests. In its standard inspection and testing of the Goods, Supplier will use an inspection system accepted by Purchaser in writing. All inspection records, including sub-tier supplier records relating to the Goods, will be maintained and made available to Purchaser for a period as may be specified by Purchaser.
15.2. Notwithstanding any prior inspection at Supplier’s premises, the manner and place of final inspection and acceptance by Purchaser will be as determined by Purchaser in its sole discretion. Purchaser may inspect 100% or a sample of Goods, at Purchaser’s option, and may reject all or any portion of the Goods or lot of Goods if Purchaser determines them to be defective or nonconforming. If Purchaser performs any inspection (other than the standard inspection) due to discovery of defective or non-conforming Goods, any additional inspection costs will be paid by Supplier. No inspection, tests, approval, design approval or acceptance of the Goods relieves Supplier from responsibility for warranty or any latent defects, fraud or negligence. If the Goods are defective or otherwise not in conformity with the Purchaser’s requirements, the Purchaser may, by notice to Supplier: (a) rescind the order/ transaction as to such Goods; (b) accept such Goods at an equitable reduction in price; or (c) reject such Goods and require the delivery of replacements. Delivery of replacements will be accompanied by a notice specifying that such Goods are replacement Goods. If Supplier fails to deliver required replacements promptly, Purchaser may: (x) correct any retained defective or nonconforming Goods at Supplier’s expense; (y) replace them with Goods from another supplier and charge the Supplier the cost thereof, including cover and any incidental costs; or (z) terminate the order/ transaction for cause.
16.1. Supplier warrants to Purchaser and its successors, assigns, customers and end users that, upon delivery, and during the entire Warranty Period specified below, all Goods furnished (including all replacement or corrected Goods or components which Supplier furnishes pursuant to this warranty) will: (a) be free from defects in material, workmanship, and design, even if the design has been approved by Purchaser; (b) conform to applicable drawings, designs, quality control plans, specifications and samples and other descriptions furnished or specified by Purchaser; (c) be merchantable; (d) be fit for the intended purposes, to the extent the Goods are not of a detailed design furnished by Purchaser, and operate as intended; (e) comply with all applicable national and local laws, rules, regulations, and ordinances; (f) be free and clear of any and all liens, restrictions, reservations, security interests or encumbrances; and (g) not infringe any patent, published patent application, or any other intellectual property rights of any third party existing as of the date of delivery, and not utilize misappropriated third party trade secret information. Services will be performed in accordance with the highest standards in the industry. The Warranty Period will be for a period of 36 months from the date of delivery to the end user or such longer period of time as may have been accepted by Purchaser from Purchaser’s customer or the date on which any longer or broader government requirement covering the Goods ends. These warranties will survive any delivery, inspection, acceptance or payment by Purchaser for the entire Warranty Period. Claims for breach of warranty do not accrue until discovery of noncompliance, even if the Goods were previously inspected. The warranties provided are cumulative and in addition to any warranty provided by law or equity. Any applicable statute of limitations runs from the date of discovery. Goods that meet the preceding standards are collectively called “conforming Goods.” If conforming Goods are not furnished within the time specified by Purchaser then Purchaser may, at its election and in addition to any other rights or remedies it may have at law or in equity, have the nonconforming Goods repaired, replaced or corrected at Supplier’s expense. In addition to the costs of repairing, replacing or correcting nonconforming Goods, Supplier is responsible for all related costs, expenses and damages including, but not limited to: the costs of removal, disassembly, failure analysis, fault isolation, reinstallation, re-inspection and retrofit of the nonconforming Goods or of Purchaser’s affected end-product; all freight charges; all customer charges; and all corrective action costs (i.e., costs of additional inspection or quality control systems). Unless set-off by Purchaser, Supplier will reimburse Purchaser for all such costs upon receipt of Purchaser’s invoice.
16.2. Supplier accepts that breach of warranty can be calculated using statistical methods based upon representative samples as utilized by Purchaser in its reasonable discretion.
16.3. These warranties, and all other warranties, express or implied, survive delivery, inspection, acceptance and payment.
Supplier is liable for all costs or damages associated with any voluntary or involuntary recall of defective or potentially defective Goods or any products containing or incorporating such Goods including, but not limited to, recalls by a customer, regulatory agency or in accordance with applicable laws or regulations. Supplier will be solely responsible for administering any recall or will fully participate in the administration of any recall conducted by Purchaser or its customer(s) in relation to Goods as Purchaser may so direct. Each party will cooperate in making available records and other information reasonably required by the other party in connection with any recall. This Section 17 will survive any termination or expiration and apply for at least the same duration as Purchaser’s obligation to its customer(s).
Purchaser may: direct changes in the drawings, designs, specifications, method of shipment or packing, quantity, or time or place of delivery of the Goods; reschedule the services; or require additional or diminished services. Only authorized Purchaser representatives may issue changes, in writing. If any change causes an increase or decrease in the cost of, or the time required for, performance, an equitable adjustment will be made in the price, delivery dates or both, and such modification shall be made in writing accordingly. Any claim for adjustment under this provision may, at Purchaser’s option, be deemed to be waived unless asserted in writing (including the amount of the claim) and delivered to Purchaser within 30 days from the date of the receipt by Supplier of the Purchaser-directed change to the purchase order. If the cost of property made obsolete or excess as a result of a change is paid by Purchaser, Purchaser may prescribe the manner of disposition of the property. Notwithstanding any disagreement between the parties regarding the impact of a change, Supplier will proceed diligently with its performance, pending resolution of the disagreement.
19. Design and Process Changes
Supplier will make no changes to the design, materials, manufacturing location, sub-tier suppliers, or processes specified by the Purchaser, without the advance written approval of Purchaser’s authorized representative. Changes to a process include, but are not limited to, changes to the production process, changes in manufacturing equipment, or changes between a manual and automated process. This requirement applies whether or not there is a cost impact associated with the change and regardless of the type of change, including product improvements.
20. Stop Work
Purchaser may, at any time by notice and at no cost, require Supplier to stop all or any part of the work for a period of up to 120 days (Stop Work Order), and for any further period as Supplier and Purchaser may agree. Immediately upon receipt of a Stop Work Order, Supplier will comply with its terms. At any time during the stop work period, Purchaser may, in whole or in part, either cancel the Stop Work Order or terminate the work in accordance with the Termination section of these T&Cs. To the extent the Stop Work Order is canceled or expires, Supplier must resume work. Purchaser shall make payment only for Goods received and accepted at the time of issuing a Stop Work Order.
21.1. The non-breaching party may terminate all orders, in whole or in part, if the other party commits a material breach of these T&Cs and fails to remedy the breach within 30 calendar days following receipt of notice specifying the grounds for the breach. A material breach includes, but is not limited to, failure to deliver, late delivery or delivery of non-conforming Goods. The solvent party may terminate the existing relationship upon notice if the other party becomes insolvent or if any petition is filed or proceedings commenced by or against that party relating to bankruptcy, receivership, reorganization, or assignment for the benefit of creditors or a similar proceeding. Termination by Purchaser under this Section 21.1 will entitle Purchaser to all damages and remedies available at law or equity. Additionally, Supplier grants to Purchaser a fully paid up, non-exclusive, irrevocable license to Supplier’s Intellectual Property rights embodied or used in the Goods for Purchaser to make, have made and sell Goods using such Intellectual Property rights to fulfill Purchaser’s obligations to Purchaser’s customer(s).
21.2. Notwithstanding any firm time period or quantity, Purchaser may terminate any order in whole or in part at any time with or without cause upon 30 days’ prior written notice.
21.3. If Purchaser terminates any order under either Section 21.1 or 21.2 above, Purchaser’s sole liability to Supplier, and Supplier’s sole and exclusive remedy, is payment for Goods received and accepted by Purchaser prior to the date of termination, payment for which can be set off against any damages to Purchaser. Upon termination, Purchaser may require Supplier to transfer title and deliver to Purchaser any completed Goods and Purchaser will pay the price for such Goods subject to set off against any damages to Purchaser. Purchaser may also require Supplier to transfer title and deliver to Purchaser any or all property produced or procured by Supplier for performance of an order/ transaction and Supplier will be credited with the reasonable value thereof not to exceed Supplier’s actual cost or the purchase order value, whichever is less.
21.4. To the extent that any portion of a purchase order is not terminated pursuant to Section 21.1 or 21.2 above, Supplier will continue performance of that portion.
22. General Indemnification and No Exclusivity or Non-Compete Arrangement
22.1 Supplier will, at its expense, defend, indemnify and hold harmless Purchaser and its subsidiaries, affiliates and agents, and their respective officers, directors, shareholders, and employees, and Purchaser’s customers (collectively “Indemnitees”) from and against any and all loss, cost, expense, damage, claim, demand or liability, including reasonable attorneys’ and professional fees and costs and the cost of settlement, compromise, judgment or verdict incurred by or demanded of an Indemnitee arising out of, resulting from or occurring in connection with Supplier’s actual or alleged negligence, willful misconduct, or breach of these T&Cs. Supplier will have the right to conduct the defense of any such claim or action and, consistent with Indemnitees’ rights hereunder, all negotiations for its settlement; provided, however, in no event will Supplier enter into any settlement without Purchaser’s prior written consent, which will not be unreasonably withheld. Indemnitee may participate in such defense or negotiations to protect its interests. Prior to service or the filing of any significant pleading, motion, brief, discovery response or other document on behalf of Purchaser, Supplier will provide such documents to Purchaser for review and approval, which will not be unreasonably withheld. In no event will Supplier enter into any settlement against the Purchaser without Purchaser’s prior written consent, which will not be unreasonably withheld.
22.2 Supplier represents and warrants that there is nothing that will directly, indirectly, actually or potentially restrict or prevent Supplier in any way from fulfilling all its obligations, duties, and services, including without limitation any exclusivity or non-compete arrangement.
23. Intellectual Property Indemnification
With respect to the Goods provided hereunder, Supplier will, at its expense, indemnify and hold harmless Indemnitees from and against any and all loss, cost, expense, damage, claim, demand or liability, including reasonable attorneys’ and professional fees and costs and the cost of settlement, compromise, judgment or verdict including court ordered attorneys and professional fees incurred by or demanded from Indemnitees arising out of, resulting from, or occurring in connection with any actual or alleged: (a) patent, copyright or trademark infringement; (b) unlawful disclosure, use or misappropriation of a trade secret; or (c) violation of any other third party intellectual property right. Supplier will have the right to conduct the defense of any such claim or action and, consistent with Indemnitees’ rights hereunder, all negotiations for its settlement; provided, however, in no event will Supplier enter into any settlement against the Purchaser without Purchaser’s prior written consent, which will not be unreasonably withheld. Indemnitee may participate in such defense or negotiations to protect its interests. If any injunction or restraining order is issued, Supplier will, at its expense, obtain for Indemnitee either the right to continue to make, use, offer to sell, sell or import the Goods or replace or modify the Goods to make them non-infringing.
Supplier will maintain insurance with a carrier having a minimum AM Best rating of “A”VII, covering at least the following insurance: commercial general liability (including product liability, Personal and Advertising Injury, Medical Payments, Bodily injury and Property Damage, contractual liability, provide coverage for claims occurring worldwide and for services to be performed, completed operations liability) in a sum no less than $5 million per occurrence/$10 million aggregate ; automobile liability in a sum no less than $5 million; worker’s compensation in an amount no less than the applicable statutory minimum requirement; and employer’s liability in an amount of no less than $1 million. Requirements may be met by a combination of Primary and Excess Coverage. Excess coverage must follow form of the underlying policies. Each above insurance policy is to be occurrence based. Prior to the delivery of any Goods, Supplier will provide to Purchaser certificates of insurance evidencing, that Supplier maintains the foregoing insurance, which will provide that such coverage will name Purchaser, its parent and subsidiaries companies, and their directors, officers, employees, agents and affiliates as Additional Insureds on the Commercial General Liability and Automobile Liability; all policies will be primary, non-contributory and not excess coverage and will not be changed without 30 days advance written notification to Purchaser from the carrier(s). Except where prohibited by law, Supplier will require its insurers to waive all rights of recovery or subrogation against Purchaser, its subsidiaries and affiliated companies, and its and their respective officers, directors, shareholders, employees and agents. The amount of insurance carried in compliance with the above requirements is not to be construed as either a limitation on or satisfaction of the indemnification obligations under these T&Cs.
25. Confidentiality and Intellectual Property
25.1. All information, including without limitation specifications, samples, drawings, data, documents, materials, know-how, designs, inventions, processes and other technical, business or financial information, that: (a) has been or will be provided to Supplier hereunder by or on behalf of Purchaser; or (b) Supplier designs, develops or creates in connection with these T&Cs at Purchaser’s expense; or (c) Supplier designs, develops or creates to meet Purchaser-furnished requirements; or (d) is a derivative of (a), (b) and/ or (c) that the Supplier designs, develops or creates in connection with these T&Cs is deemed to be “Confidential Information” of Purchaser. All Confidential Information is deemed to be a “work made for hire” as defined in 17 U.S.C. § 101 made for Purchaser, with Purchaser having the sole right to obtain, hold and renew, in its own name or for its own benefit, intellectual property registrations or other appropriate protection. To the extent that exclusive title or ownership rights in such Confidential Information does not constitute a “work made for hire” and may not originally vest in Purchaser as contemplated hereunder, Supplier irrevocably assigns, transfers and conveys to Purchaser all right, title and interest therein to all Confidential Information, and will execute any and all necessary and further documents to assist Purchaser in the registration or protection of any intellectual property rights in the Confidential Information.
25.2. Purchaser’s Confidential Information will remain the property of Purchaser, may not be used by Supplier for any purpose other than for performing its duties and obligations under these T&Cs, may not be disclosed to any third party, and will be returned to Purchaser upon the later of (i) Purchaser’s written request, (ii) completion of its duties and obligations under these T&Cs, or (iii) termination or expiration of any agreement these T&Cs relate to. If, with Purchaser’s prior written approval, Supplier furnishes Confidential Information to a sub-tier supplier, Supplier will bind the sub-tier supplier to confidentiality requirements substantially identical to this provision and Supplier will remain responsible to Purchaser for any breach of this provision by its sub-tier suppliers. No disclosure, description or other communication of any sort will be made by Supplier to any third person of the fact of Purchaser’s purchase of Goods hereunder, these T&Cs, the substance of any discussions or negotiations concerning the transaction, or either party’s performance of duties and obligations.
25.3. Supplier acknowledges that Purchaser is the owner of all right, title and interest in, and to, any trademarks used in the provision of the Goods (the “Trademarks”). All goodwill resulting from the use of the Trademarks by Supplier, including any additional goodwill that may develop because of Supplier’s use of the Trademarks, will inure solely to the benefit of Purchaser, and Supplier will not acquire any rights in the Trademarks except those rights specifically granted in or given in writing by Purchaser. Supplier will use the Trademarks in strict conformity with these T&Cs, Purchaser’s directions and with Purchaser’s corporate policy regarding trademark usage. Supplier shall not: (a) use the Trademarks in any manner likely to diminish their commercial value or goodwill; (b) use any name, domain name, logo or icon likely to cause confusion with the Trademarks; (c) make any representation to the effect that the Trademarks are owned by Supplier rather than Purchaser; (d) file or obtain, or cause any third party to file or obtain, any applications or registrations or domain names for the Trademarks or any terms confusingly similar to the Trademarks; or (e) challenge the validity of Purchaser’s ownership or any registrations of the Trademarks. Supplier will not at any time, either during the life of or after the expiration of the transaction, contest the validity or any registrations of the Trademarks or assert a claim or any other right to manufacture, sell or offer for sale products under the Trademarks, or any trademark confusingly similar thereto.
26.1. Supplier will maintain suitably detailed records as may be necessary to adequately reflect Supplier’s compliance with these T&Cs. Supplier will permit Purchaser’s auditors to have access at all reasonable times to Supplier’s books and other pertinent records and Supplier will require each of its sub-tier suppliers to do likewise with respect to their books and records. Supplier and each sub-tier supplier will also furnish other information as may be needed by Purchaser’s representatives in auditing compliance.
26.2. Purchaser may perform audits up to two years following completion of Supplier’s duties. If, as a result of an audit, any invoice submitted by Supplier is found to be in error, an appropriate adjustment will be made to the invoice or the next succeeding invoice following the discovery of the error and will be paid promptly by Supplier or Purchaser, as the case may be. Supplier will promptly correct any other Supplier deficiencies discovered as a result of the audit.
27. Assignment and Subcontracting
Supplier will not assign any of its rights or obligations hereunder or subcontract all or any material aspect of the work called for hereunder without the prior written approval of Purchaser. Any assignment without Purchaser’s written approval will be voidable at the option of Purchaser. Purchaser may assign any of its rights or obligations hereunder to any of its subsidiaries or affiliates, or to any purchaser or successor to all or substantially all of the assets of the business or product line to which the transaction relates without Supplier’s consent and upon notice to Supplier.
28. Relationship of Parties/Independent Contractor
Nothing will be construed to place Supplier and Purchaser in an agency, employment, franchise, joint venture or partnership relationship. Neither party has the authority to obligate or bind the other in any manner and, except as expressly set forth herein, nothing contained in herein will give rise or is intended to give rise to rights of any kind to any third parties. Neither party will make any representation to the contrary. The parties agree that Supplier will perform its obligations as an independent contractor. Supplier retains the right to exercise full control of, supervision over and responsibility for Supplier’s performance hereunder, including the employment, direction, compensation and discharge of Supplier’s personnel, as well as compliance with workers’ compensation, unemployment, disability insurance, social security, withholding and all other laws, rules, codes, regulations and ordinances governing such matters.
29. Compliance with Laws and Integrity
29.1. Supplier will comply with all applicable national, international, state/provincial and local laws, regulations, ordinances and directives, including without limitation those related to the environment, health and safety, and Purchaser’s Code of Conduct (“Code”), California Prop 65 notification, Country of Origin declaration in performing its duties, rights and obligations hereunder. In addition, and to the extent Purchaser and its suppliers are required to comply with codes of conduct of Purchaser’s customers, Supplier will also comply with those codes of conduct. Supplier will maintain an integrity and compliance program acceptable to Purchaser and its customers and effective in preventing and correcting ethical violations and in maintaining compliance with laws.
29.2. Supplier shall maintain quality management standards pursuant to ISO/TS, QS or other related standards to ensure, among other things, the Goods are safe, reliable and of good quality pursuant to applicable industry standards.
29.3 The Goods furnished under this agreement will have been produced in compliance with all applicable governmental and regulatory requirements including, without limitation, the Hazard Communications Standard (MSDS) of the Occupational Safety and Health Administration, the Ozone Depleting Chemical Restrictions of the United States Environmental Protection Agency, and the restrictions set forth in the Montreal Protocol on ozone-depleting substances. The Goods will be free from the substances identified in Article 4.1 of the European Parliament Directive 2002/95/EC (RollS Directive) as that Directive is updated from time to time, or similar laws or regulations identified by Purchaser, restricting the use of hazardous materials in other jurisdictions. Additionally, Supplier will be responsible for all costs and liabilities for or relating to the recycling of Goods pursuant to the most current version of European Parliament Directive 2002/96/EC (WEEE Directive) as such Directive is implemented in each country, or similar laws or regulations identified by Purchaser.
29.4 Upon request, in a form and substance satisfactory to enable Purchaser to meet its compliance obligations with regards to Regulation (EC) No. 1907/2006 (“REACH”) or other laws or regulations requiring ingredient disclosure identified by Purchaser, Supplier will provide Purchaser with complete information regarding the chemical composition of any Goods (substances, preparations, mixtures, alloys or goods) supplied hereunder, including all safety information required under REACH and information regarding the registration or pre-registration status of any Goods pursuant to REACH registrations or applications for authorization pursuant to REACH unless Supplier notifies Purchaser in writing that it rejects such “Identified Use” in order to protect human health or the environment and specifies the reason for such rejection. In such case, Purchaser will have the right to terminate this contract without incurring any costs or damages. Supplier agrees to indemnify Purchaser for any costs, fines or damages incurred by Purchaser and arising from Supplier’s failure to comply with the provisions set forth above.
29.5 Supplier warrants that all representations and certifications furnished by Supplier as required by law or regulation in connection with this order are accurate, current and complete as of the effective date of this order, and that to Supplier’s knowledge no person has been paid a kickback or illegal gratuity in connection herewith. Supplier agrees to indemnify and hold Purchaser and its customers harmless for any loss, damage or expenses sustained because any certification or representation herein or required by law or regulation made by Supplier was inaccurate, non-current or incomplete or due to Supplier’s non-compliance with any applicable law or regulation.
29.6 Supplier agrees to provide Purchaser, within five (5) business days of Purchaser’s request, written certification stating the extent of Supplier’s compliance with this Section 29.6.
29.7 If this order is issued under a U.S. Government contract or subcontract the provisions set forth in Purchaser’s government requirements contract are incorporated herein by reference as though fully set forth.
29.8 Supplier agrees to comply with any End of Life Vehicle (ELF) laws or regulations of Purchaser or its customers’ requirements related to eliminating or controlling restricted substances in the Goods including, but not limited to, compliance with the Global Automotive Declarable Substance List (GADSL) requirements and data entry of materials in Supplier’s Goods into the International Material Database System (IMDS).
30. Applicable Law and Forum
The construction, interpretation and performance hereof and all transactions hereunder shall be governed by the laws of the State of Delaware, U.S.A. without regard to or application of its principles or laws regarding conflicts of laws, and excluding the United Nations Convention on the International Sale of Goods of 1980 (and any amendments or successors thereto). Any dispute not resolved by the parties shall be subject to the exclusive jurisdiction of the federal or state courts located in Delaware.
All Purchaser remedies set forth in herein are in addition to, and will in no way limit, any other rights and remedies that may be available to Purchaser at law or in equity.
All notices relating hereto must be in writing. Notices to the parties will be sent to their respective addresses. Notices must be delivered personally; or delivered by recognized overnight courier; or mailed certified first-class mail, postage prepaid; or sent by facsimile transmission to the facsimile number provided by Purchaser or Supplier respectively; or sent by electronic transmission (email) with proof of delivery. Any notice will be deemed given on the date delivered if delivered personally; three business days after being placed in the mail as specified; or upon confirmation receipt that it was transmitted satisfactorily if transmitted by facsimile or electronic transmission.
Any news release, public announcement, advertisement, publicity or any other disclosure, in connection hereto, to any third party except as may be necessary to comply with other obligations stated in hereunder requires prior written approval of Purchaser.
34. Headings and Captions
Headings and captions are for convenience of reference only and do not alter the meaning or interpretation of any provision herein.
The failure of either party to enforce at any time any of the provisions hereunder will not be construed to be a continuing waiver of any provisions hereunder, nor will any such failure prejudice the right of such party to take any action in the future to enforce any provisions hereunder.
If any provision of these T&Cs is held to be illegal, invalid, or unenforceable by applicable law, that provision will be severed from these T&Cs; the remaining provisions will remain in full force and effect; and a similar legal, valid and enforceable provision will be substituted in lieu of the severed provision.
37. Supply Chain Security
Supplier will implement the Business Partner Criteria of any Supply Chain Security Program that the country of import for the Goods may adopt such as the U.S. Customs-Trade Partnership Against Terrorism (C-TPAT) or the Canadian Partners in Protection (PIP) Program.
38. Ant-Bribery and Corruption.
38.1 Supplier agrees that it shall comply fully at all times with all applicable laws, including but not limited to anti-corruption laws, and that it has not, and will not, in connection with the manufacture or supply of the Goods, directly or indirectly, make, promise, authorize, ratify or offer to make, or take any act in furtherance of any payment or transfer of anything of value for the purpose of influencing, inducing or rewarding any act, omission or decision to secure an improper advantage on behalf of itself or Purchaser and warrants that it has taken reasonable measures, including the implementation of an internal anti-bribery and corruption policy, to prevent subcontractors, agents or any other third parties subject to its control or determining influence from doing so. For the avoidance of doubt, this includes facilitating payments, which are unofficial, improper, small payments or gifts offered or made to government officials to secure or expedite a routine or necessary action to which we are legally entitled (including, without limitation, the provision of transportation, meals or lodging). In addition, and without prejudice to the generality of the foregoing, Supplier agrees to comply with Purchaser’s Anti-Bribery and Corruption Policy and Code of Conduct, as may be amended from time to time.
38.2 Supplier shall not contact, or otherwise knowingly meet with any government official for the purpose of discussing activities arising out of or in connection with the supply of Goods to Purchaser, without the prior written approval of Purchaser and, when requested by Purchaser, only in the presence of a Purchaser designated representative.
38.3 Supplier shall inform Purchaser in writing if it is convicted of or pleads guilty to a criminal offence involving fraud or corruption, or becomes the subject of any government investigation for such offenses, or is listed by any government agency as debarred, suspended, proposed for suspension or debarment, or otherwise ineligible for government programs.
38.4 Supplier represents that except as disclosed to Purchaser in writing: (1) no significant shareholders (>25% shareholding), members of senior management team, members of the Board of Directors, or key individuals who will be responsible for Purchaser’s account are currently or have been in the past two years, a government official with actual or perceived influence which could affect Supplier’s performance; (2) it is not aware of any immediate relatives (e.g. spouse, parents, children or siblings) of the persons listed in the previous subsection (1) having a public or private role which involves making decisions which could affect Purchaser business or providing services or products to, or on behalf of Purchaser; (3) it does not have any other interest which directly or indirectly conflicts with its proper and ethical performance of its obligations under these T&Cs; and (4) it shall maintain arm’s-length relations with all third parties with which it deals for or on behalf of Purchaser in performance of its obligations under these T&Cs. Supplier shall inform Purchaser in writing at the earliest possible opportunity of any conflict of interest as described in this section that arises during the term hereof.
38.5 Purchaser shall have the right to conduct an audit of Supplier’s activities in connection with the supply of Goods to Purchaser to monitor compliance with the terms of this section. Supplier shall cooperate fully with such audit, the scope, method, nature and duration of which shall be at the sole reasonable discretion of Purchaser.
38.6 Supplier shall ensure that all transactions relating to Purchaser business are properly and accurately recorded in all material respects on its books and records and each document upon which entries such books and records are based is complete and accurate in all material respects. Supplier must maintain a system of internal accounting controls reasonably designed to ensure that it maintains no off-the-books accounts.
38.7 Supplier agrees that in the event that Purchaser believes that there has been a possible violation of the terms of this section, Purchaser may make full disclosure of such belief and related information at any time and for any reason to any competent government bodies and its agencies, and to whomsoever Purchaser determines in good faith has a legitimate need to know.
39. Human Rights and Ethical Standards
39.1 Supplier shall hold itself, its affiliates and subcontractors to the highest performance, ethical and compliance standards, including basic human rights, not engaging in any activity, practice or conduct which would constitute an offence under anti-slavery legislation encouraging fair and equal treatment for all persons, the provision of safe and healthy working conditions, respect for the environment, the adoption of appropriate management systems and the conduct of business in an ethical manner. In performing its duties under this Agreement, Supplier acknowledges the value and importance of performance and ethical behavior in its performance under this Agreement.
39.2 Supplier warrants that in relation to its performance of this Agreement: (i) it does not employ engage or otherwise use any child labour; (ii) it does not use forced labour in any form (prison, indentured, bonded or otherwise) and its employees are not required to lodge original identification papers or monetary deposits on starting work; (iii) it provides a safe and healthy workplace, presenting no immediate hazards to its workers; (iv) it does not discriminate against any workers on any ground (including race, religion, disability or gender); (v) it does not engage in or support the use of corporal punishment, mental, physical, sexual or verbal abuse and does not use cruel or abusive disciplinary practices in the workplace; (vi) it pays each employee at least the minimum wage, or a fair representation of the prevailing industry wage, (whichever is the higher) and provides each employee with all legally mandated benefits; (vii) it complies with the laws on working hours and employment rights in the countries in which it operates; (viii) it is respectful of its employee’s right to join and form independent trade unions and freedom of association; (ix) it has not been convicted of any slavery or human trafficking offences anywhere around the world and that to the best of its knowledge it is not currently under investigation, inquiry or enforcement proceedings in relation to any allegation of slavery or human trafficking offenses anywhere around the world; (x) it shall make reasonable enquires to ensure that its subcontractors have not been convicted of slavery or human trafficking offenses anywhere around the world; (xi) it shall have and maintain throughout the term of this Agreement its own policies and procedures to ensure its compliance with applicable law relating to anti-slavery, child labour and forced labour; and (xii) it shall implement due diligence procedures to ensure that there is no slavery or human trafficking in any part of its supply chain.
39.3 Supplier is responsible for controlling its own supply chain and shall encourage compliance with ethical standards and human rights by any subsequent supplier of goods and services that are used by Supplier when performing its obligations under this Agreement.
39.4 Supplier shall ensure that it has ethical and human rights policies and an appropriate complaints procedure to deal with any breaches of such policies. In the case of any complaints, Supplier shall report the alleged complaint and proposed remedy to Purchaser.
39.5 Purchaser reserves the right upon reasonable notice (unless inspection is for cause, in which case no notice shall be necessary) to enter upon Supplier’s premises to monitor compliance with the provisions of this section, and Supplier shall, subject to compliance with applicable laws, provide to Purchaser any relevant documents requested by Purchaser in relation thereto.
40. Conflict Mineral Reporting
Purchaser supports the disclosure of conflict minerals pursuant to Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 as may be amended from time to time (“Act”) designed to ensure that specified metals, specifically, gold, tin, tantalum and tungsten, are not being sourced from mines situated in the Democratic Republic of the Congo and surrounding countries (“DRC”). In this regard, Purchaser may from time to time request certain information from Supplier concerning the origin of metals that are used in the manufacture of Goods. Supplier agrees to submit to Purchaser, within fifteen (15) days of Purchaser’s written request, any and all information, documents and certifications reasonably required by Purchaser to accurately complete and fulfill conflict mineral reporting obligations, including Supplier certifications that the Goods are DRC “conflict free” as defined under the Act. Purchaser’s conflict minerals policy and Supplier’s obligations are subject to change and Supplier agrees to reasonably cooperate with any good faith inquiry related to Purchaser’s conflict minerals policy.
All provisions which by their nature should apply beyond its term will remain in force after any termination or expiration of any contract and/ or order entered between the parties including but not limited to those addressing the following subjects: Import/Customs Compliance, Price, Price: Most Favored Customer and Meet or Release, Spare Parts Pricing, Invoicing and Payment, Setoff, Warranty, Recall, General Indemnification, Intellectual Property Indemnification, Insurance, Confidentiality and Intellectual Property, Audit, Applicable Law and Forum, Publicity, and Survival.