STANDARD PURCHASE ORDER TERMS AND CONDITIONS
These Terms and Conditions (“Terms”) shall apply to and be incorporated by reference into every Purchase Order (“PO”) issued by Buyer to Seller. By accepting a PO, Seller agrees to be bound by these Terms. These Terms, together with the PO and statements of work attached or referenced therein, constitute the entire agreement between the parties and supersede all prior or contemporaneous agreements, representations, and understandings, whether written or oral. No additional or alternate terms proposed or become part of the Agreement unless accepted in writing signed by Buyer. In the event of any conflict between these Terms and any other document, these Terms shall control.
1. Definitions
For purposes of these Terms: (a) “Deliverables” means all Goods, Services, work product, materials, documentation, software, inventions, or other items to be provided or created by Seller under a PO; (b) “Goods” means all tangible personal property, materials, equipment, parts, and supplies to be supplied under a PO; (c) “Services” means all services, labor, consulting, installation, maintenance, development, or other work to be performed by Seller under a PO; and (d) “Specifications” means any descriptions, drawings, samples, models, performance criteria, or other requirements set forth or referenced in the PO.
2. Acceptance and Formation of Contract
Each PO constitutes Buyer’s offer to purchase the Deliverables described therein. The Agreement becomes binding upon the earlier of: (a) Seller’s written acceptance or acknowledgment of the PO; (b) Seller’s commencement of performance, shipment of Goods, or rendering of Services; or (c) Seller’s issuance of an invoice referencing the PO. These Terms, the PO, and any attachments form the complete and exclusive statement of the terms of the Agreement.
3. Prices, Taxes, and Payment
All prices stated in the PO are firm and not subject to increase unless expressly agreed in writing by Buyer. Prices include all costs of packaging, labeling, insurance, and transportation to the FOB point unless otherwise stated on the PO. If Seller’s published or offered price to any third party for like quantities and quality is lower than the PO price during the term, Seller shall promptly notify Buyer and apply the lower price to all Deliverables under the PO going forward (most favored customer pricing). Payment terms are Net 60 days from the later of: (i) Buyer’s receipt of a correct and complete invoice referencing the PO number, or (ii) Buyer’s acceptance of the Deliverables, unless different terms are stated on the PO. Buyer may withhold payment for any disputed amounts or pending claims and may set off any amounts owed by Seller to Buyer against any amounts Buyer owes to Seller. Seller is responsible for all applicable taxes, duties, and governmental charges, except for taxes for which Buyer provides a valid exemption certificate. Prices exclude sales/use tax unless expressly stated.
4. Delivery, Shipping, Title, and Risk of Loss
Time is of the essence. Delivery and performance must occur strictly in accordance with the schedule and location specified in the PO. Early delivery requires Buyer’s prior written consent. Unless otherwise specified on the PO, all shipments of Goods are FOB Buyer’s designated facility or dock (destination). Title and risk of loss pass to Buyer only upon delivery to and acceptance by Buyer at the FOB point. Seller bears all risk of loss, damage, or delay in transit. Seller shall: (a) properly pack, mark, and label all shipments in accordance with good commercial practice and any Specifications; (b) include the PO number on all packing slips, invoices, bills of lading, and correspondence; (c) provide a detailed packing list with each shipment; and (d) use the carrier and routing specified by Buyer if any. Buyer may reject any COD shipments. If Seller fails to meet the delivery schedule for reasons not excused under Force Majeure, Buyer may, without liability: (i) cancel the PO in whole or in part; (ii) require expedited shipping at Seller’s sole expense; (iii) purchase substitute Deliverables elsewhere and charge Seller the difference (cover damages); or (iv) exercise any other rights or remedies available at law or in equity.
5. Inspection, Acceptance, and Rejection
All Deliverables are subject to Buyer’s inspection and approval within a reasonable time after delivery or performance. Payment or acceptance of any portion does not waive Buyer’s rights with respect to the remainder or any latent defects. Buyer may reject any Deliverables that: (a) do not conform to the PO, Specifications, samples, or warranties; (b) are defective in material, workmanship, or design; (c) are in excess of ordered quantities; or (d) are delivered late. Rejected Goods shall be returned to Seller at Seller’s risk and expense (including reasonable inspection, unpacking, repacking, and shipping costs), or held by Buyer at Seller’s risk and expense pending instructions. Seller shall promptly replace or correct rejected Deliverables at no additional cost to Buyer. Buyer’s failure to inspect or reject within any stated period does not relieve Seller of its obligations or constitute acceptance of non-conforming or defective Deliverables. Latent defects discovered after acceptance remain subject to all remedies.
6. Warranties and Representations
Seller represents and warrants to Buyer, its Affiliates, and their respective customers and end users that: (a) Seller has good and marketable title to all Goods, free and clear of all liens, security interests, and encumbrances, and has full right and authority to sell and convey the same; (b) All Deliverables shall conform strictly to the PO, and any other requirements; (c) All Goods shall be new (unless expressly specified as refurbished or remanufactured), merchantable, of good quality and workmanship, free from all defects in design, material, and safe for their intended use; (d) All Deliverables shall be fit for the particular purpose for which they are intended (to the extent such purpose is known to Seller or should reasonably be known) and for ordinary use; (e) All Services shall be performed in a professional, workmanlike manner consistent with industry standards by qualified, trained personnel, using new and high-quality materials where applicable; (f) All Deliverables shall comply with all applicable laws, regulations, codes, and standards (including safety, environmental, and consumer protection); (g) The use, sale, or possession of the Deliverables by Buyer and its customers will not infringe, misappropriate, or violate any third-party intellectual property, privacy, or other rights. These warranties are in addition to any implied warranties and survive termination or expiration of the Agreement. They run with the Goods and to all subsequent purchasers and users. Seller shall, at its sole expense and at Buyer’s option, promptly repair, replace, or reperform any non-conforming or defective Deliverables and reimburse Buyer for all related costs and damages (including cover costs and reasonable attorneys’ fees).
7. Changes and Modifications
Buyer may, at any time by written notice to Seller (email inclusive), direct changes to the PO. Seller shall promptly notify Buyer in writing of any resulting impact on price or delivery schedule and shall not proceed with changes that increase price or extend schedule without Buyer’s prior written approval of an adjustment. Seller shall not make any changes to the Deliverables or process without Buyer’s prior written consent.
8. Termination
Termination for Convenience. Buyer may terminate the PO or any part thereof for its convenience at any time by written notice to Seller. Upon receipt of notice, Seller shall immediately stop all work, cause its suppliers and subcontractors to stop, and take all reasonable steps to mitigate costs. Buyer shall pay Seller for: (a) Deliverables accepted by Buyer prior to termination; and (b) reasonable, documented, direct out-of-pocket costs necessarily incurred by Seller for work performed prior to termination that cannot be mitigated or reused. Buyer shall have no obligation to pay for work not performed, lost profits, or costs that Seller could have been avoided with reasonable efforts. Seller shall provide a detailed termination claim within thirty (30) days of notice. Termination for Cause. Buyer may terminate the PO immediately (or after any applicable cure period) by written notice if Seller: (a) breaches any term, warranty, or obligation under the Agreement and fails to cure within ten (10) days after notice (or immediately if the breach is not reasonably curable or involves safety, IP, or confidentiality); (b) fails to make progress so as to endanger timely performance; (c) becomes insolvent, files for bankruptcy, has a receiver appointed, or makes an assignment for the benefit of creditors; or (d) fails to provide adequate assurances of performance upon request. Upon termination for cause, Buyer may procure substitute Deliverables elsewhere and Seller shall be liable for all excess costs and damages incurred by Buyer. All of Buyer’s rights and remedies are cumulative.
9. Indemnification
Seller shall defend, indemnify, and hold harmless Buyer (“Indemnified Party”) from and against any and all claims, demands, actions, suits, proceedings, losses, damages, liabilities, costs, and expenses (including reasonable attorneys’ fees, expert fees, court costs, and settlement amounts) arising out of or relating to: (a) Any actual or alleged defect in the Goods or failure of the Services or Deliverables to conform to warranties or Specifications; (b) Any personal injury (including death) or property damage caused by Seller, its personnel, subcontractors, or the Deliverables; (c) Any actual or alleged infringement, misappropriation, or violation of any third-party intellectual property right, privacy right, or other right by the Deliverables or their use; (d) Any act, omission, negligence, or willful misconduct of Seller or its personnel or subcontractors; (e) Any violation of applicable law by Seller or its supply chain; and (f) Any claim by Seller’s employees, agents, or subcontractors for wages, benefits, or other compensation. Seller’s indemnification obligations include the duty to defend the Indemnified Parties upon tender of defense and shall survive termination. Buyer may, at its option, participate in the defense with its own counsel at Seller’s expense. Seller shall not settle any claim that imposes any obligation on, or admits any wrongdoing by, an Indemnified Party without Buyer’s prior written consent. Buyer may withhold amounts due to Seller to secure these obligations.
10. Insurance
Seller shall, at its sole cost and expense, procure and maintain throughout the term of the Agreement and for a period of one (1) year thereafter (or longer if required for completed operations or claims-made coverage), adequate insurance to protect Seller from claims: (a) under worker’s compensation and state disability acts; (b) for damages because of bodily injury, sickness, disease or death which arise out of any negligent act or omission of Seller; and (c) for damages because of injury to or destruction of tangible or intangible property, including loss of use resulting therefrom, which arise out of any negligent act or omission of Seller. Seller will maintain a commercial general liability insurance policy with limits of no less than one million dollars per occurrence and two million dollars in the aggregate ($1,000,000/$2,000,000) and Buyer shall be named as an additional insured on such commercial general liability policy. Seller shall provide certificates of insurance upon request and shall give Buyer at least thirty (30) days’ prior written notice of cancellation, non-renewal, or material reduction in coverage. The insurance requirements and limits are minimums and shall not limit Seller’s liability or obligations under the Agreement.
11. Intellectual Property and Work Product
All Deliverables and any inventions, improvements, works of authorship, data, or other intellectual property created, developed, or reduced to practice by Seller (alone or jointly) in the course of performing under the PO (“Work Product”) shall be considered “work made for hire” for Buyer under U.S. copyright law and all other applicable laws. All right, title, and interest in and to the Work Product, including all intellectual property rights therein, shall vest immediately and exclusively in Buyer upon creation. To the extent any Work Product is not deemed a work made for hire, Seller hereby irrevocably assigns, transfers, and conveys to Buyer all right, title, and interest in and to such Work Product, including all patents, copyrights, trade secrets, trademarks, and other intellectual property rights. Seller waives any and all moral rights, rights of publicity, or similar rights in the Work Product to the maximum extent permitted by law. Seller retains no rights in the Work Product other than a limited, non-exclusive, non-transferable, royalty-free, revocable license to use any of Seller’s pre-existing materials solely as embedded in the final Deliverables for the benefit of Buyer. Seller shall execute all documents and take all actions reasonably requested by Buyer to perfect, evidence, or enforce Buyer’s ownership of the Work Product and related rights. Buyer owns all rights in any feedback, suggestions, or ideas provided by Seller regarding Buyer’s products or services.
12. Confidentiality and Data Protection
Seller shall hold in strict confidence and not disclose, publish, or disseminate any non-public information disclosed by or on behalf of Buyer (including Specifications, pricing, business plans, customer lists, technical data, trade secrets, and personal information) (“Confidential Information”), and shall use such information solely for performing its obligations under the PO. Seller may disclose Confidential Information to its employees and subcontractors who have a need to know and are bound by written confidentiality obligations no less restrictive than these Terms. Confidentiality obligations shall survive termination for three (3) years, or indefinitely for trade secrets and personal information. Exceptions: information that (a) is or becomes publicly available through no fault of Seller; (b) was rightfully in Seller’s possession prior to disclosure without confidentiality obligation; (c) is independently developed by Seller without use of Buyer’s information; or (d) is rightfully received from a third party without restriction. If Seller is required by law to disclose, it shall provide Buyer prompt written notice (to the extent legally permitted) to allow Buyer to seek protective order or other remedy. Upon termination or Buyer’s request, Seller shall promptly return or securely destroy all Confidential Information and certify such destruction in writing.
13. Compliance with Laws and Ethical Conduct
Seller will comply in all material respects with all laws and regulations applicable to its activities under this Agreement, including without limitation all export control laws and regulations of the United States and other countries with respect to the subject matter hereof.
14. Limitation of Liability
EXCEPT AS SET FORTH BELOW, EACH PARTY’S TOTAL AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO ANY PO OR THESE TERMS (WHETHER IN CONTRACT, TORT INCLUDING NEGLIGENCE, STRICT LIABILITY, OR OTHERWISE) SHALL NOT EXCEED THE TOTAL AMOUNTS ACTUALLY PAID OR PAYABLE BY BUYER TO SELLER UNDER THE APPLICABLE PO DURING THE TWELVE (12) MONTH PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO THE CLAIM. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, PUNITIVE, EXEMPLARY, OR ENHANCED DAMAGES, INCLUDING BUT NOT LIMITED TO LOST PROFITS, LOST REVENUE, LOST DATA, LOSS OF BUSINESS OPPORTUNITY, OR COST OF COVER, REGARDLESS OF THE FORM OF ACTION OR THEORY OF LIABILITY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE LIMITATIONS IN THIS SECTION SHALL NOT APPLY TO: (A) SELLER’S OBLIGATIONS UNDER SECTIONS 9 (INDEMNIFICATION), 11 (INTELLECTUAL PROPERTY), OR 12 (CONFIDENTIALITY); (B) EITHER PARTY’S GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR FRAUD; (C) PERSONAL INJURY OR DEATH; (D) BREACH OF PAYMENT OBLIGATIONS; OR (E) ANY LIABILITY THAT CANNOT BE LIMITED OR EXCLUDED UNDER APPLICABLE LAW. BUYER’S LIABILITY FOR PAYMENT OF ACCEPTED DELIVERABLES SHALL NOT BE LIMITED BY THIS SECTION.
15. Force Majeure
Neither party shall be liable for any failure or delay in performance due to causes beyond its reasonable control and without its fault or negligence, including but not limited to acts of God, natural disasters, fire, flood, earthquake, epidemic or pandemic, war, terrorism, riots, government actions or embargoes, strikes or labor disputes (excluding disputes involving the affected party’s own workforce), or failures of utilities or transportation (“Force Majeure Event”). The affected party shall give prompt written notice, use commercially reasonable efforts to mitigate the effects and resume performance, and keep the other party reasonably informed. If a Force Majeure Event prevents performance for more than thirty (30) consecutive days, Buyer may terminate the affected PO(s) in whole or in part without liability upon written notice, and Seller shall be entitled only to payment for accepted Deliverables delivered prior to termination.
16. Assignment and Subcontracting
Seller may not assign, transfer, or delegate the PO or any rights or obligations hereunder, or subcontract any material portion of the work, without Buyer’s prior written consent (which may be withheld in Buyer’s sole discretion). Any attempted assignment is void. Buyer may assign or transfer its rights and obligations under the PO to any Affiliate or successor in connection with a merger, acquisition, corporate reorganization, or sale of all or substantially all assets, without consent. Seller shall remain fully responsible and liable for the performance of any approved subcontractor as if performed by Seller itself.
17. Notices
Any notices under this Agreement will be in e-mail and effective upon its mailing.
18. Governing Law, Venue, and Dispute Resolution
This Agreement will be governed by and construed in accordance with the laws of the state of Idaho excluding that body of law pertaining to conflict of laws. Any legal suit, action, or proceeding relating to this Agreement must be situated in the federal or state courts located in Kootenai County, Idaho. If any provision of this Agreement is for any reason found to be unenforceable, the remainder of this Agreement will continue in full force and effect.
19. Miscellaneous
(a) Waiver. No failure or delay by either party in exercising any right, power, or privilege under these Terms shall operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any other or further exercise. Any waiver must be in writing and signed by the waiving party to be effective. (b) Survival. The provisions of these Terms that by their nature should survive termination or expiration (including but not limited to Sections 6, 9, 11, 12, 14, 18, and 19) shall survive and remain in effect. (c) No Third-Party Beneficiaries. Except as expressly provided in Section 9 (Indemnification) nothing in these Terms confers upon any person or entity other than the parties any legal or equitable right or remedy. (d) Entire Agreement; Modification. This Agreement executed by the parties constitutes the complete and exclusive understanding and agreement of the parties and supersedes all prior understandings and agreements, whether written or oral, with respect to the subject matter hereof. No change shall be binding unless in a writing signed by authorized representatives of both parties. (e) Independent Contractors. The parties are independent contractors. Nothing in these Terms creates a partnership, joint venture, agency, or employment relationship. Neither party has authority to bind the other or incur any obligation on the other’s behalf.