1. The Contract
1.1 Parties. As used herein, Buyer shall mean JG Kern Enterprises and each of its consolidated subsidiaries, that become a party to a Contract as defined below. Seller shall mean any provider of Products and Services as defined below. The rights and obligations of the parties shall also extend to their directors, employees, agents, successors and assigns.
1.2 Offer and Acceptance. Each purchase order Buyer issues (“Purchase Order”) is Buyers offer to purchase the products (“Products”) and services (“Services”) identified in that Purchase Order. Seller will be deemed to have accepted a Purchase Order as issued (1) if Seller fails to object to it in writing within 10 business days after receipt and has begun or later begins performance under the Purchase Order, or (2) if Seller acknowledges in writing its acceptance of the Purchase Order. Upon acceptance, the Purchase Order together with these General Terms and Conditions and any other documents specifically incorporated in the Purchase Order or separately agreed to in writing, such as specifications, drawings, requirements of Buyers customer, or quality requirements, will become a binding contract between Buyer and Seller (collectively, the “Contract”). If Seller timely objects to a Purchase Order or proposes alternate or additional terms, the Purchase Order will become a Contract only if and when Buyer and Seller mutually agree in writing, even if Seller commences or has commenced performance under the Purchase Order. Specific terms and conditions on the Purchase Order and the other documents comprising the Contract will take priority over any inconsistent provision in these General Terms and Conditions.
1.3 Changes. Buyer may from time to time by notice to Seller make reasonable changes, within the scope of the Contract, to the drawings, specifications, materials, packaging, testing, quantity, time or method of delivery or shipment, or similar requirements prescribed in the Contract. At Sellers request with appropriate supporting documentation, the parties will agree upon an equitable adjustment to the Contract prices and times for performance as a result of Buyers changes. Contract changes must be in writing signed by Buyers authorized representative, and Buyer will not unreasonably withhold or delay consent to a Contract change proposed by Seller, provided however, that all engineering changes must be processed in accordance with Buyers product change request process.
2. Products and Service Requirements
2.1 Quantity. If quantities or delivery schedules are not specified in the Contract, they will be as reasonably determined by Buyer and stated in Buyers firm releases issued to Seller from time to time. Buyer may return over-shipments to Seller at Sellers expense. Buyers, or Buyers Customers downtime or overtime hours caused by Sellers under-shipments may be charged to Seller. Unless otherwise specifically stated in the Contract, the Contract is not exclusive and Buyer may purchase similar products and services from third parties, subject to Section 10.2.M
3. Delivery.
3.1 Packing and Shipment. Buyer may specify the method of transportation and the type and number of packing slips and other documents to be provided with each shipment. Seller will pack and ship Products in accordance with Buyers instructions, including labeling and hazardous materials instructions. If Buyer has not provided packing or shipping instructions, Seller will pack and ship Products in accordance with sound commercial practices. If Seller is required to use Buyers returnable packaging, Seller will be responsible for cleaning and returning the returnable packaging.
3.1 Packing and Shipment. Buyer may specify the method of transportation and the type and number of packing slips and other documents to be provided with each shipment. Seller will pack and ship Products in accordance with Buyers instructions, including labeling and hazardous materials instructions. If Buyer has not provided packing or shipping instructions, Seller will pack and ship Products in accordance with sound commercial practices. If Seller is required to use Buyers returnable packaging, Seller will be responsible for cleaning and returning the returnable packaging.
3.2 Delivery Schedules. Seller will deliver Products and Services in strict accordance with the Contract terms and Buyers or its logistics providers routing and other instructions. Unless otherwise stated in the Contract, Products will be delivered FOB Buyer’s dock and title will transfer upon receipt of the Products by the Buyers facility or other designated ship to location. If Products are not ready for delivery in time to meet Buyers delivery schedules, the party causing the delay will be responsible for additional costs of any resulting expedited or other special transportation. Any downtime or overtime hours (incurred by Buyer or Buyers Customer) caused by Sellers nonconformance of delivery schedule may be charged to Seller.
4. Inspection and Quality.
4.1 Inspection. Buyer or its customer may, upon reasonable advance notice to Seller, inspect production processes and Property and, subject to Sellers prior written approval, conduct testing at Sellers premises for the sole purpose of verifying Sellers performance under the Contract. Seller may restrict Buyers or Buyers customers access as necessary to protect proprietary information and may require appropriate indemnification and releases. Buyer is not required to inspect Products delivered or Services performed, and no inspection or failure to inspect will reduce or alter Sellers obligations under the Contract. 4.1 Inspection. Buyer or its customer may, upon reasonable advance notice to Seller, inspect production processes and Property and, subject to Sellers prior written approval, conduct testing at Sellers premises for the sole purpose of verifying Sellers performance under the Contract. Seller may restrict Buyers or Buyers customers access as necessary to protect proprietary information and may require appropriate indemnification and releases. Buyer is not required to inspect Products delivered or Services performed, and no inspection or failure to inspect will reduce or alter Sellers obligations under the Contract.
4.2. Quality. Seller will comply with all quality standards and procedures set forth by Buyer or Buyers customers. Seller also agrees to participate fully with Buyer and/or Buyers customers or other suppliers of Buyer with respect to value analysis and/or value engineering or other continuous improvement programs. All cost reductions achieved as a result of such efforts shall serve to reduce the total cost for the Products.
5. Prices and Competitiveness.
5.1 Prices. Prices for the Products are complete as set forth in the Purchase Order and unless stated otherwise includes all applicable federal, state, provincial, and local taxes other than sales, value added, or similar turnover taxes or charges. Seller may not modify prices or issue surcharges without Buyers written consent. Seller will separately invoice Buyer for any sales, value added, or similar turnover taxes or charges that Seller is required by law to pay or collect from Buyer. 5.1 Prices. Prices for the Products are complete as set forth in the Purchase Order and unless stated otherwise includes all applicable federal, state, provincial, and local taxes other than sales, value added, or similar turnover taxes or charges. Seller may not modify prices or issue surcharges without Buyers written consent. Seller will separately invoice Buyer for any sales, value added, or similar turnover taxes or charges that Seller is required by law to pay or collect from Buyer.
5.2 Competitiveness. Seller will be competitive in terms of delivery, quality, technology and service and give Buyer the best prices it offers to any other customer purchasing a comparable volume and mix of Products. Seller will reduce its prices at any time to maintain this warranty. Buyer may, upon reasonable advance notice, audit Seller to verify Sellers competitiveness, and Seller will supply Buyer with such documentation and information as is necessary for Buyer to conduct such audit. If Buyer believes that Seller is not competitive, then Buyer will promptly notify Seller in writing of the existence of the non-competitive situation. Seller shall have fifteen (15) days from the receipt of such notice to respond with lower pricing or otherwise remedy the non-competitive condition. If Seller fails to do so, Buyer may terminate all or a portion of this Contract pursuant to Section 13 hereto.
6. Payment.
Seller will promptly submit correct and complete invoices or other agreed billing communications with appropriate supporting documentation and other information reasonably required by Buyer after delivery of Products and performance of Services, and Buyer may withhold payment until a correct and complete invoice or other required information is received and verified. Payment terms are as set forth in the Contract or, if paid through Buyers authorized credit card, in accordance with the credit card terms. If not addressed, payment terms will be 60 days from the later of the delivery date or the date that Seller receives a complete and correct invoice. Unless otherwise agreed, Seller will accept payment by check or other cash equivalent, including electronic funds transfer or by authorized Buyer credit card if agreed to by Seller in advance. Buyer will pay Seller in the currency specified in the Contract or, if none is specified, the default payment currency will be United States dollars. All amounts due to Seller shall be considered net of indebtedness of Seller and its affiliates/subsidiaries to Buyer and Buyer shall have the right to setoff against or recoup from any amounts due to Seller and its affiliates/subsidiaries any amount as to which a bona fide dispute exists for any order by Buyer arising out of the Contract or any other transactions between Buyer and Seller and its affiliates/subsidiaries.
7. Product Warranties.
7.1 Sellers Warranties. Seller warrants to Buyer that during the warranty period specified in the Contract or for a period coterminous with the warranty extended by Buyer to Buyers customer, whichever is longer, (1) the Products will be new, free from defects in design (if Seller is responsible for design), workmanship and materials, and will conform to the specifications, drawings, samples, and performance requirements specifically incorporated in the Contract, be merchantable and fit for their intended purposes(s) and (2) Seller will transfer to Buyer ownership and good title to Products delivered and Services provided, free of all liens, encumbrances, and rights of third parties (except those created by Buyer). THE FOREGOING WARRANTIES ARE THE SOLE WARRANTIES AND ALL OTHER WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, ARISING BY LAW OR CUSTOM, ARE EXPRESSLY DISCLAIMED. 7.1 Sellers Warranties. Seller warrants to Buyer that during the warranty period specified in the Contract or for a period coterminous with the warranty extended by Buyer to Buyers customer, whichever is longer, (1) the Products will be new, free from defects in design (if Seller is responsible for design), workmanship and materials, and will conform to the specifications, drawings, samples, and performance requirements specifically incorporated in the Contract, be merchantable and fit for their intended purposes(s) and (2) Seller will transfer to Buyer ownership and good title to Products delivered and Services provided, free of all liens, encumbrances, and rights of third parties (except those created by Buyer). THE FOREGOING WARRANTIES ARE THE SOLE WARRANTIES AND ALL OTHER WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, ARISING BY LAW OR CUSTOM, ARE EXPRESSLY DISCLAIMED.
7.2 Non-Conforming Products. Except as otherwise specifically provided in the Contract and subject to Section 7.3, Buyers remedy for Products that do not conform to the warranties in Section 7.1 will be to (1) reject the non-conforming Products or Services, (2) require Seller, at Buyers option and at Sellers expense (including applicable shipping, administrative and labor costs), to either repair or replace the non-conforming Products, and/or (3) require Seller to implement at its expense containment, inspection, sorting, and other quality assurance procedures if Buyer reasonably determines (through statistical sampling or other quality assessments) that a substantial quantity of incoming Products does not conform to the warranties in Section 7.1. To the full extent possible, Buyer will provide Seller with access to any available warranty data related to the Products and any available field returned Products. Buyer will also provide Seller with an opportunity to participate in any root cause analysis performed by Buyer concerning the Products.
7.3 Recalls. This Section 7.3 applies to any voluntary or government-mandated offer by Buyer (or the vehicle manufacturer) to vehicle purchasers to remedy an alleged defect that affects motor vehicle 7.3 Recalls. This Section 7.3 applies to any voluntary or government-mandated offer by Buyer (or the vehicle manufacturer) to vehicle purchasers to remedy an alleged defect that affects motor vehicle safety or to address an alleged failure of a vehicle to comply with an applicable motor vehicle safety standard or guideline (a Recall). Except as otherwise stated in the Contract, Seller will be liable for costs and damages resulting from a Recall only if the Recall results in whole or in part from a failure of the Products to conform to the warranties in Section 7.1. If Seller is liable for a Recall, the extent of Sellers liability will be reasonably determined by Buyer on a case-by-case basis based on a good faith allocation of responsibility for the Recall. As a condition precedent to Sellers liability under this Section 7.3, Buyer must (i) notify Seller as soon as practicable after Buyer learns that a Recall being considered implicates the Products, (ii) provide Seller with available performance evaluations, accident reports, engineering investigations, and other data relating to the potential Recall, (iii) provide Seller a reasonable opportunity to participate in inquiries and discussions among Buyer, its customer, and governmental agencies regarding the need for and scope of the Recall, and (iv) consult with Seller about the most cost-effective method of modifying or replacing vehicle systems or component parts, including the Products, in order to remedy the alleged defect or non-compliance.
8. Product Liability.
8.1 Indemnification. Seller will indemnify and defend Buyer against third-party claims or demands for injury or death to persons, property damage, economic loss, and any resulting damages, losses, costs, and expenses (including reasonable legal fees), regardless of whether the claim or demand arises under tort, contract, strict liability, or other legal theories, if and to the extent caused by Sellers defective design or manufacture of Products or provision of Services, or its negligent acts or omissions in its performance under the Contract. This Section 8 will not apply to the extent that the injury, loss, or damage results from (1) Buyers specification of materials in the Products, (2) Buyers design of the Products, or (3) any alteration or improper repair, maintenance, handling, or installation of the Products by anyone other than Seller. 8.1 Indemnification. Seller will indemnify and defend Buyer against third-party claims or demands for injury or death to persons, property damage, economic loss, and any resulting damages, losses, costs, and expenses (including reasonable legal fees), regardless of whether the claim or demand arises under tort, contract, strict liability, or other legal theories, if and to the extent caused by Sellers defective design or manufacture of Products or provision of Services, or its negligent acts or omissions in its performance under the Contract. This Section 8 will not apply to the extent that the injury, loss, or damage results from (1) Buyers specification of materials in the Products, (2) Buyers design of the Products, or (3) any alteration or improper repair, maintenance, handling, or installation of the Products by anyone other than Seller.
8.2 Procedure. Buyer will notify Seller promptly after Buyer becomes aware of the basis for a claim under this Section 8. The parties will cooperate with each other to determine the root cause of a defect in or failure of the Products (and related systems and components) and an equitable allocation of responsibility among all responsible parties. Seller may examine and test all available Products and related systems and components that are subject to a third-party claim. Buyer will endeavor to include Seller in settlement discussions where indemnity has been or will be sought from Seller, and Buyer may not settle or compromise any third-party claim that gives rise to an indemnification claim without Sellers prior written consent, which will not be unreasonably withheld or delayed.
9. Compliance with Laws and Business Conduct.
Seller will comply with applicable laws, rules and regulations of the country where the Products are manufactured or the Services are performed. Seller will provide Buyer with material safety data sheets regarding the Products and, upon Buyers request, will provide Buyer with other information reasonably required in order to comply with applicable laws.
10. Intellectual Property Rights
10.1 Buyers Intellectual Property. Buyer does not transfer to Seller any patent, trade secret, trademark, service mark, copyright, mask work, or other intellectual property right (“Intellectual Property Right”) of Buyer in information, documents, or property that Buyer makes available to Seller under the Contract, other than the right to use Buyers Intellectual Property Rights to produce and supply Products and Services to Buyer.
10.2 Sellers Intellectual Property. Except as stated in this Section 10.2, Seller does not transfer to Buyer any Intellectual Property Right of Seller related to the Products or Services or incorporated in Buyers Property, other than the right to incorporate Products purchased from Seller in component parts and to sell those component parts to Buyers customers. If the Contract is terminated by Seller or Buyer pursuant to Section 12.1 (other than by Seller for Buyers Default), Seller grants to Buyer a non-exclusive right and license to use Sellers Intellectual Property Rights, subject to Section 14, to obtain from alternate sources products similar to the Products for use in vehicles or component parts covered by the terminated Contract. There will be no fee for this license if (1) Buyer terminates the Contract for Sellers Default, or (2) Seller terminates the Contract other than for Buyers Default or pursuant to Section 16. Otherwise, the parties will negotiate a reasonable fee for use of Sellers Intellectual Property Rights.
10.3 Infringement. (a) Subject to Section 10.3(b), Seller will indemnify and defend Buyer and its customers against claims, liabilities, losses, damages, costs, and expenses, including reasonable legal fees, arising out of the actual or alleged infringement by the Products of a third-party Intellectual Property Right. If a claim under this Section 10.3 results, or is likely to result, in an injunction or other order that would prevent Seller from supplying or Buyer from using Products for their intended purpose, Seller will at its option and expense either (i) secure a license of the Intellectual Property Right that permits Seller to continue supplying the Products to Buyer, or (ii) modify the Products so that they become noninfringing, so long as the modification does not materially alter the operation or performance of the Products, or (iii) replace the Products with non-infringing but practically equivalent Products. (b) Seller will have no liability under this Section 10.3 unless Buyer provides Seller with full information, cooperation, and assistance regarding, and authority to defend, a claim covered by this Section 10.3. Seller will have no liability under this Section 10.3 if and to the extent that a claim of infringement is based on (1) a Product modification made by Buyer or a third party, (2) a Product modification made by Seller at Buyers request, (3) use or interconnection by Buyer of the Product in combination with other products not made or sourced by Seller, or (4) Products made to specifications not provided by Seller.
11. Property.
11.1 Buyers Property. (a) Buyer will own the tooling, jigs, dies, gauges, fixtures, molds, patterns, supplies, materials, and other equipment and property used by Seller to manufacture, store, and transport Products or provide Services (“Property”) if (1) the Property is so designated in the Contract, or (2) Buyer or its customer has provided or paid for the Property (“Buyers Property”). Seller will assign to Buyer contract rights or claims in which Seller has an interest with respect to Buyers Property and execute bills of sale, financing statements, or other documents reasonably requested by Buyer to evidence its or its customers ownership of Buyers Property. Seller will indemnify and defend Buyer against claims or liens adverse to Buyers or its customers ownership of Buyers Property except those that result from the acts or omissions of Buyer or its customer. Seller will hold Buyers Property on a bailment basis and will be responsible for loss or damage to Buyers Property while in its possession or control. To the extent permitted by law, Seller waives any lien or similar right it may have with respect to Buyers Property. Buyer will be responsible for personal property taxes assessed against Buyers Property. (b) Seller will (1) at its expense maintain Buyers Property in good condition and repair, normal wear and tear excepted, throughout the useful life of Buyers Property, (2) use Buyers Property only for the manufacture, storage, and transport of Products for Buyer unless Buyer otherwise approves in writing, (3) adhere to all requirements related to Buyers Property including, but not limited to, requirements related to the marking and identification of Buyers Property as belonging to Buyer or its customer, and (4) not remove Buyers Property (other than shipping containers and the like) from Sellers premises without Buyers written approval. All replacement parts, additions, improvements, and accessories to Buyers Property will become part of Buyers Property unless they can be removed without damaging Buyers Property. (c) Buyer will pay for Buyers Property that it is required to purchase at the amount specified in the Contract or, if no amount is specified in the Contract, at (1) Sellers actual cost of the Buyers Property, if manufactured by a third party, or (2) Sellers actual cost of purchased materials, components, and services plus Sellers actual cost of labor and overhead allocable to the Buyers Property, if manufactured by Seller. Unless otherwise stated in the Contract, final payment for Buyers Property is due on the vehicle manufacturers PPAP (Production Part Approval Process) approval date. (d) Seller will immediately release to Buyer upon request, and Buyer may retake immediate possession of, Buyers Property and other property of Buyer or its customers at any time, with or without cause and without payment of any kind unless otherwise provided in the Contract. Seller will release the requested Property and other property to Buyer FOB Sellers plant, properly packed and marked in accordance with the requirements of Buyers carrier. If the release or recovery of Buyers Property or other property renders Seller unable to produce a Product, the release or recovery will be deemed a termination of the Contract with respect to that Product pursuant to Section 12 or 13, as applicable.
11.2 Sellers Property. Seller will own all Property that is not Buyers Property (Sellers Property). Seller will at its expense furnish, maintain in good condition, and replace when necessary Sellers Property needed to perform the Contract. While a Contract for Products remains in effect, Buyer may purchase Sellers Property used exclusively to produce those Products and not needed by Seller to produce Products or products for other customers, for a purchase price equal to the greater of fair market value or Sellers unamortized acquisition cost.
11.3. Scrap. All scrap recovered from raw material that is provided by Buyer or on Buyers behalf or that is generated during the manufacture of the Products belongs to Buyer. Accordingly, Buyer may, at its discretion, advise Seller at any time that it desires to take possession of scrap material or have it processed by Seller or a third party. Upon Buyers direction, Seller will cause the relevant material to be handled per Buyers instructions. At no time during the manufacture of the Products will Seller commingle scrap with scrap generated from production activities performed by Seller on behalf of other customers.
12. Term and Termination.
12.1 Generally. Each Contract will remain in effect for the term specified in the Contract (or until terminated if no term is specified) unless earlier terminated by Buyer (1) by reasonable (but not less than 60 days) notice to the Seller or (2) pursuant to Section 13 or 16. Upon termination of a Contract, Seller will assist Buyer as needed in locating an alternative source for the Products and Services and in moving production to the alternate source selected by Buyer. 12.1 Generally. Each Contract will remain in effect for the term specified in the Contract (or until terminated if no term is specified) unless earlier terminated by Buyer (1) by reasonable (but not less than 60 days) notice to the Seller or (2) pursuant to Section 13 or 16. Upon termination of a Contract, Seller will assist Buyer as needed in locating an alternative source for the Products and Services and in moving production to the alternate source selected by Buyer.
12.2 Results of Termination. Except for terminations pursuant to Section 13 or Section 16 hereof, if Buyer terminates a Contract, Buyer will purchase completed Products at the Contract price and work-in-process and raw materials at Sellers actual cost, in each case to the extent reasonable and authorized in Buyers firm releases.
12.3 Property Orders. If Buyer terminates a Contract for Buyers Property before it is fully performed (other than for Sellers Default), Buyer will (1) purchase the completed Buyers Property at the Contract price and work-in-process and raw materials related to the uncompleted work at Sellers actual cost, and (2) reimburse Seller for reasonable costs actually incurred by Seller as a result of the early termination, including the cost to store the items to be purchased and to relocate the work to an alternate source.
13. Default.
13.1 Events of Default. Time is of the essence with respect to all of Sellers performance obligations hereunder and, subject to Section 16, either party will be in Default under the Contract if it (1) fails to perform any obligation under the Contract and, if the non-performance can be cured, fails to cure the non-performance within 15 business days after notice from the other party specifying the non-performance or such shorter period as set forth in the notice if Buyer or Buyers customer production is threatened, (2) admits in writing its inability to pay its debts as they become due, commences a bankruptcy, insolvency, receivership, or similar proceeding, or makes a general assignment for the benefit of creditors, (3) becomes a debtor in a bankruptcy, insolvency, receivership, or similar proceeding commenced by a third party that is not dismissed within 30 days after commencement, or (4) fails to provide adequate assurance of performance under the Contract within three business days after written demand by the other party.
13.2 Remedies.
(a) Subject to Sections 7 and 8 (which provide the exclusive remedies for breach of warranty, Recalls, and products liability) and to the limitations in this Section 13.2, either party may exercise the remedies provided in this Section 13.2, which are cumulative and are in addition to all other rights and remedies available elsewhere in the Contract or by law. (a) Subject to Sections 7 and 8 (which provide the exclusive remedies for breach of warranty, Recalls, and products liability) and to the limitations in this Section 13.2, either party may exercise the remedies provided in this Section 13.2, which are cumulative and are in addition to all other rights and remedies available elsewhere in the Contract or by law. (b) Either party may recover from the other party actual out-of-pocket damages or costs caused by the other party’s breach of the Contract, regardless of whether the breach subsequently becomes a Default with the passage of time or giving of notice or both. (c) Upon the occurrence of a Default and while that Default is continuing, the non-defaulting party may terminate the Contract by notice to the defaulting party. If Seller is in Default, Buyers damages will include the reasonable costs actually incurred to relocate the work to an alternate source, and Buyer may purchase completed Products at the Contract price and work-in-process and raw materials at Sellers actual cost. If Buyer is in Default, Sellers damages will include (1) the Contract price for completed Products and Services and the actual cost of work-in-process and raw materials (which will become Buyers property upon payment in full), and (2) the cost of unreimbursed and unamortized research and development, capital equipment, Property, and supplies that are unique to the Products. (d) If Seller does not release or deliver Buyers Property or other property of Buyer or its customers in accordance with Section 11.1(d), Buyer may at Sellers cost (1) obtain an immediate court order for possession without notice and without posting a bond, and (2) enter Sellers premises, with or without legal process, and take immediate possession of Buyers Property and the other property. To the extent permitted by law, Seller waives any right to object to Buyers repossession of Buyers Property and the other property in a bankruptcy or other proceeding. (e) Except for claims for damages arising under sections 7 and 8 of these general terms and conditions or as otherwise expressly authorized in the contract, all indirect, special, consequential (including lost profits or market share or damage to brand value), incidental, punitive, and exemplary damages, whether or not foreseeable, are excluded under these General Terms and Conditions to the extent permitted by applicable law.
14. Confidential Information.
Trade secrets, specifications, drawings, notes, instructions, engineering data and analyses, compositions of matter, financial data, and other technical and business data which are supplied or disclosed by Buyer or Seller in connection with the Contract, in each case that are marked or otherwise identified as confidential or where their confidential nature is apparent at the time of disclosure (“Confidential Information”), will be deemed confidential and proprietary to, and remain the sole property of, the disclosing party. The receiving party may not disclose Confidential Information or use Confidential Information for any purpose other than as contemplated under the Contract without in each case the written consent of the disclosing party. Confidential Information will not include information that (1) is or becomes generally available to the public other than as a result of a violation of this Section 14 by the receiving party, (2) was obtained by the receiving party on a non-confidential basis from a third party who had the apparent right to disclose it, or (3) is legally required to be disclosed. Buyer and Seller will each use the same degree of care to safeguard Confidential Information that it uses to protect its own confidential information from unauthorized access or disclosure (but not less than a reasonable degree of care). Upon request by the disclosing party, the receiving party will promptly return or destroy the original and all copies of Confidential Information received.
15. Assignment and Subcontracting.
Seller may not assign or subcontract its duties or responsibilities under the Contract without the prior written consent of the other party, which will not be unreasonably withheld or delayed. Unless otherwise stated in the consent, any assignment or subcontracting by either party, with or without the required consent, will not relieve that party of its duties or obligations under the Contract or its responsibility for non-performance or Default by its assignee or subcontractor. If Buyer requires Seller to subcontract all or a portion of its duties or obligations under the Contract to a designated subcontractor, Seller will not be responsible for a breach of the Contract caused by that subcontractors failure to meet its warranty, delivery, or other contractual obligations.
16. Excusable Non-Performance.
A delay or failure by either party to perform its obligations under the Contract will be excused, and will not constitute a Default, only if (1) caused by an event or occurrence beyond the reasonable control of that party and without its fault or negligence and (2) the party unable to perform gives notice of the nonperformance (including its anticipated duration) to the other party promptly after becoming aware that it has occurred or will occur. If Seller is unable to perform for any reason, Buyer may purchase Products and Services from other sources and reduce its purchases from Seller accordingly without liability to Seller. Within three business days after written request by the other party, the non-performing party will provide adequate assurances that the nonperformance will not exceed 30 days. If the nonperforming party does not provide those assurances, or if the non-performance exceeds 30 days, the other party may terminate the Contract by notice given to the non-performing party before performance resumes.
17. Contingency Plans and Labor Contracts.
Seller will prepare contingency plans to satisfy Buyer requirements in the event of emergencies such as utility interruptions, key equipment failure, and field returns. In addition, Seller will notify Buyer of the contract expiration date at least six months before the expiration of a current labor contract that has not been extended or replaced. Buyer may thereafter direct Seller in writing to manufacture up to 30 days of additional inventory of Products, specifying the quantities of Products required and any packaging and storage requirements. Seller will use commercially reasonable efforts to comply with Buyers written directions prior to expiration of the current labor contract and until the current labor contract has been extended or a new contract completed. By authorizing the additional inventory, Buyer commits to buy the entire quantity of conforming Products requested and produced. Seller is responsible for carrying costs and any additional costs of manufacture.
18. Customs and Security.
18.1 Credits. Transferable credits or benefits associated with Products purchased, including trade credits, export credits, or rights to the refund of duties, taxes, or fees, belong to Buyer unless otherwise prohibited by applicable law. Seller will provide Buyer with all information and records relating to the Products necessary for Buyer to (1) receive these benefits, credits, and rights, (2) fulfill any customs obligations, origin marking or labeling requirements, and certification or local content reporting requirements, (3) claim preferential duty treatment under applicable trade preference regimes, and (4) participate in any duty deferral or free trade zone programs of the country of import. 18.1 Credits. Transferable credits or benefits associated with Products purchased, including trade credits, export credits, or rights to the refund of duties, taxes, or fees, belong to Buyer unless otherwise prohibited by applicable law. Seller will provide Buyer with all information and records relating to the Products necessary for Buyer to (1) receive these benefits, credits, and rights, (2) fulfill any customs obligations, origin marking or labeling requirements, and certification or local content reporting requirements, (3) claim preferential duty treatment under applicable trade preference regimes, and (4) participate in any duty deferral or free trade zone programs of the country of import.
18.2 Licenses. Seller will obtain all export licenses and authorizations and pay all export taxes, duties, and fees unless otherwise stated in the Contract, in which case Seller will provide all information and records necessary to enable Buyer to obtain those export licenses or authorizations.
18.3. Security. If Seller is shipping Products from locations outside the United States, Seller accepts responsibility for, and shall implement security measures to ensure the safe and secure transportation of goods throughout the supply chain and adhere to all applicable security requirements (including but not limited to factory and shipping container security) required under the Customs-Trade Partnership Act Against Terrorism (C-TPAT) sponsored by the United States Customs and Border Protection Agency.
19. Insurance.
Seller will maintain, at its own expense, the following minimum insurance coverages with insurers satisfactory to Buyer: (i) statutory workers’ compensation; (ii) employer’s liability in the amount of U.S. $1 million; (iii) commercial general liability (including products/completed operations and contractual liability coverage) in the amount of U.S. $3 million bodily injury or property damage per occurrence; and (iv) automotive liability (covering owned, non-owned, and hired vehicles) in the amount of U.S. $3 million bodily injury or property damage per accident. Such coverages can be provided under primary and/or excess policies. In addition, where applicable, Seller will maintain all risk property coverage (including transit) and theft coverage for Products, whether or not owned by Buyer, which have been ordered under the Contract and which are in the care, custody, or control of Seller, its agents, or contractors, and any other insurance coverages that Buyer deems appropriate. On the commencement of the Contract and each subsequent renewal of its insurance coverages, Seller will furnish Buyer with certificates of insurance evidencing such coverages, naming Buyer as an additional insured where deemed appropriate by Buyer, and requiring written notice to Buyer at least 15 days prior to the cancellation, reduction or non-renewal of coverage. Compliance with this Section 19 will not relieve Seller of its defense and indemnity obligations under any of these terms and conditions. These obligations will survive the expiration or cancellation of the Contract to the extent necessary to cover acts or events arising in connection with the performance of the same or the consequences of such acts or events.
20. Dispute Resolution and Governing Law.
20.1 Negotiation and Mediation. Buyer and Seller will first endeavor to resolve through good faith negotiations any dispute arising under the Contract. If a dispute cannot be resolved through good faith negotiations within a reasonable time, either party may request non-binding mediation by a mediator approved by both parties or, absent that approval, by the National Center for Dispute Resolution, however 20.1 Negotiation and Mediation. Buyer and Seller will first endeavor to resolve through good faith negotiations any dispute arising under the Contract. If a dispute cannot be resolved through good faith negotiations within a reasonable time, either party may request non-binding mediation by a mediator approved by both parties or, absent that approval, by the National Center for Dispute Resolution, however such request shall not impair or limit a party’s right to proceed immediately with litigation.
20.2 Litigation. In the event that any dispute cannot be resolved through negotiation or mediation (if mediation is agreed to by both parties), then either party may pursue litigation in accordance with applicable rules of the controlling jurisdiction. In any litigation instigated by the Seller against the Buyer, the parties agree that the litigation will be filed only the courts of the country in which the Buyer has its principle place of business, regardless of where the Seller may be located or the Products may have been designed, manufactured, sold or delivered.
20.3 Governing Law and Forum. Unless otherwise agreed in writing, the Contract will be governed by and interpreted according to the laws of the State of Michigan regardless of the laws that might otherwise govern under applicable principles of conflicts of laws. The United Nations Convention on Contracts for the International Sale of Goods will not apply to the Contract.
21. Miscellaneous.
21.1 Advertising. During and after the term of the Contract, Seller will not advertise or otherwise disclose its relationship with Buyer or Buyers customers without Buyers prior written consent, except as may be required to perform the Contract or as required by law. 21.1 Advertising. During and after the term of the Contract, Seller will not advertise or otherwise disclose its relationship with Buyer or Buyers customers without Buyers prior written consent, except as may be required to perform the Contract or as required by law.
21.2 Audit Rights. Seller will maintain records as necessary to support amounts charged to Buyer under the Contract in accordance with Sellers document retention policies. Buyer and its representatives may audit Sellers records of transactions completed within one year prior to the audit date, to the extent needed to verify the quantities shipped and that the prices charged match the Contract prices. Any audit will be conducted at Buyers expense (but will be reimbursed by Seller if the audit uncovers material errors in the amounts charged), at reasonable times, and at Sellers usual place of business.
21.3 Electronic Communication. Seller will comply with the method of electronic communication specified by Buyer in Buyers request for quotation and confirmed in the Contract, including requirements for electronic funds transfer, purchase order transmission, electronic signature, and communication. Seller will also make commercially reasonable efforts to comply with any modification to Buyers specified method of electronic communication after the date of the Contract, subject to Section 1.2.
21.4 Relationship of the Parties. Buyer and Seller are independent contractors, and nothing in the Contract makes either party the agent or legal representative of the other party for any purpose. Neither party has authority to assume or to create any obligation on behalf of the other party.
21.5 Waiver. The failure of either party to enforce any right or remedy provided in the Contract or by law on a particular occasion will not be deemed a waiver of that right or remedy on a subsequent occasion or a waiver of any other right or remedy.
21.6 Entire Agreement. The Contract constitutes the entire agreement between the parties with respect to its subject matter, and supersedes all prior oral or written representations or agreements by the parties with respect to the subject matter of the Contract. Unless and to the extent specifically incorporated into the Contract, Buyer rejects, in advance, all terms and conditions contained on Sellers quotation, sales forms, invoices, order acknowledgements and/or any Seller documents posted on internet web sites. This Contract will apply to all purchases made by Buyer unless specifically modified or waived in writing. Except as authorized in Section 1.2, no subsequent terms, conditions, understandings, or agreements purporting to modify the terms of the Contract will be binding unless in writing and signed by both parties.
21.7 Severability. A finding that any provision of the Contract is invalid or unenforceable in any jurisdiction will not affect the validity or enforceability of any other provision of the Contract or the validity or enforceability of that provision in any other jurisdiction.
21.8 Interpretation. When used in these General Terms and Conditions, including means including without limitation and terms defined in the singular include the plural and vice versa.
21.9 Notices. Any notice or other communication required or permitted in the Contract must be in writing and will become effective on the date of actual receipt if the date of actual receipt is a business day or on the next business day if the date of actual receipt is not a business day.
