Purchase Order Standard Terms & Conditions
1. Definitions Applying to the Purchase Order Standard Terms and Conditions: In order to interpret these purchase order standard terms and conditions, in whole or in part, certain capitalized terms shall have meanings as set below, other terms that are defines in the UCC shall have the meanings attributed to them in the UCC.
1.1 “SEM” shall refer to Security Engineered Machinery Co., Inc. or its subsidiary, the originator of the P.O.
1.2 “Claims” shall refer to and include all actual and potential legal, equitable, statutory and administrative claims, causes of action, rights of indemnity, rights of contribution, liens and remedies of every nature, known or unknown or foreseen or unforeseen, regardless of whether any of them may have accrued or may accrue in the future.
1.3 “Goods” shall refer to goods or services or both ordered by SEM from Seller.
1.4 “Include,” in any form, shall be used as a term of enlargement, not of limitation and shall, as necessary, incorporate the phrase: “but not in limitation of the forgoing.” And need not be capitalized.
1.5 “Person” shall refer to any individual, sole proprietor, partnership (limited, limited liability or general), limited liability company, corporation, unincorporated association or any other similar or commonly recognized legal entity and need not be capitalized.
1.6 “P.O.” shall refer to this purchase order or the accompanying purchase order, in all events including these standard terms and conditions, whether such P.O. be transmitted in writing, by phone, electronically or otherwise.
1.7 “Seller” shall refer to the Seller identified on the P.O., the vendor of the Goods.
1.8 “Specifications” shall refer to all specifications, descriptions, drawings, artwork, samples, part number and name and other detail and data identifying or describing the Goods.
1.9 “UCC” shall refer to the Uniform Commercial Code as enacted in Massachusetts.
2. SEM’s Offer and Seller’s Acceptance: The P. O. constitutes an offer be SEM to purchase the Goods from Seller according to the Specifications, instructions and conditions set forth in or accompanying the P. O. If the P.O. follows any previous offer or proposal from Seller, SEM’s acceptance of any such offer or proposal is expressly made conditional on Seller’s assent to the additional or different terms contained herein. Absent SEM’s express written acceptance or confirmation of any such previous offer or proposal from the Seller, The P.O. is not acceptance or confirmation of any previous proposal from Seller, and the P.O. shall be deemed to be a rejection and counter-offer with respect to any such previous offer or proposal. Acceptance of any of the Goods shall not be construed as an acceptance or confirmation of any such previous proposal or offer. Seller shall be bound by the P.O. and its terms and conditions when it commences production or deliveries to SEM any of the Goods ordered, or when it performs any other act constituting legal acceptance, whether or not any such acceptance or confirmation purports to state terms and conditions additional to or different from those stated herein. SEM expressly objects to any rejects any such different or additional provisions, and none of such provisions shall be deemed to be a part of the P.O. or the contract between the parties respecting the subject matter hereof. No additional or different terms offered by Seller shall become part of the P.O. or the contract between the parties, the offer being expressly limited to the terms hereof.
3. Shipping Instructions: Whenever requested to do so, Seller will identify the Goods in the manner specified by SEM. Seller shall properly and carefully package the Goods to minimize risk of damage in transit. Packing slips must accompany the shipment. Invoices, packing slips and containers must bear the P.O. number, stock number, vendor lot number and description of item in a clearly visible position. Invoices and packing slips must be marked “complete” when final shipment is involved. SEM shall have the right at any time to specify the carrier or method of transportation and agrees, unless necessitated through fault of Seller, to compensate Seller for the excess cost of any specific transportation over the transportation cost for shipment in the manner specified in the P.O. SEM shall also have the right to require special, express or air shipments if Seller fails or will fail to meet the delivery requirements of the P.O. Seller shall reimburse SEM for any resulting additional transportation costs, unless due solely to causes beyond the control and without the fault or negligence of Seller. Unless expressly stated otherwise, Goods shipped pursuant to the P.O. are FOB SEM’s dock and must be shipped to assure arrival at “ship to” point free of damage and deterioration. Notwithstanding anything in the foregoing to the contrary, title to and risk of loss of the Goods shall pass to SEM only upon receipt of the Goods by SEM, and any rightful rejection or revocation of acceptance of any Goods by SEM shall immediately shift the risk of loss of such Goods, wherever located, to Seller. Seller agrees that any contrary provisions of section 2-509 and 2-510 or other provisions of the UCC or other applicable law shall not apply to the P.O. No changes will be allowed for boxing, containers or cartage unless agreed upon in writing or set forth specifically in the P.O. All containers, pallets, drums, carboys or like packaging material to be returned must be shipped by Seller on a no charge or consignment basis. Seller accepts all responsibility for the information provided on the NAFTA Certificate of Origin, letter or affidavits, including but not limited to, any liabilities resulting from inaccurate data on these documents or failure to comply with NAFTA requirements.
4. Delivery: Deliveries must be made at the times specified herein unless SEM is promptly notified and agrees in writing to alternate dates. Time is of the essence; Goods not timely delivered are non-conforming. Seller also agrees to pay whatever additional cost, expense, loss or damage SEM sustains as a result of any other deviation from the P.O., including lost sales, lost profits and any incidental or consequential damages, including cover (under the UCC) unless the delay is due to unforeseeable causes beyond the control and without the fault or negligence of Seller. If , for any reason, Seller is compelled to use material other than what is required by the Specifications, Seller must promptly notify SEM, SEM then shall have the option to cancel the P.O. without penalty or to agree in writing to the modification. Unless by special arrangement authorized in writing by SEM, SEM shall not be liable for material processed in excess of fabricating, processing or shipping instructions issued by SEM. Any over-shipments are made at Seller’s risk and shall be Seller’s responsibility, including minimum requirements without advance agreement and SEM reserves the right to reject and return the same at Seller’s expense. SEM shall have the right to cancel any future delivery on the P.O. for any reason upon thirty (30) days’ notice to Seller.
5. Inspection and Rejection: Seller shall provide and maintain an adequate inspection system covering the supplies, processing methods, special tooling, materials, workmanship and final product ordered under the P.O. Seller shall make its inspection records of all work and materials available to SEM during the performance of the P.O., and for such longer period as may be necessary. SEM shall have the reasonable right and opportunity to inspect and test all supplies, processing methods, special tooling, material , workmanship and final product ordered under the P.O. to the extent practicable at all times and places, including during the periods of manufacture. SEM shall not be deemed to have accepted any Goods until the expiration of a reasonable period of time for inspection after delivery which period of time shall not be less than sixty (60) days after delivery and SEM may thereafter revoke acceptance of nonconforming Goods. Seller acknowledges and agrees that SEM may inspect any commercial lot of Goods consisting of numerous units of the same product by inspecting only a reasonable sampling of such units and that SEM may revoke acceptance of any other units of such commercial lot which SEM at a later time discovers to be nonconforming. In case any Goods delivered are nonconforming in materials or workmanship or otherwise, SEM shall have the right, notwithstanding payment or any prior inspection or test, either to reject or revoke acceptance of such nonconforming Goods and to require that Seller promptly replace or correct at Seller’s own expense any such nonconforming Goods. If Seller fails promptly to replace or correct such Goods after SEM request Seller to do so, SEM, in its sole and absolute discretion, either may (1) by contract or otherwise, replace or correct such Goods and charge to Seller the increased cost occasioned to SEM thereby; (2) accept the delivery of such Goods, or accept such service, subject to a reduction in price reflecting the reduced value attributable to nonconformance; or (3) effect a cancellation for default subject to reimbursement by Seller to SEM of any damages resulting from such failure, including reimbursement for lost sales and profits and all incidental and consequential damages, including cover. Seller assumes all transportation and handling costs and the risk of damage to or loss of nonconforming Goods.
6. SEM Security Interest in Rejected Goods: Seller grants SEM a security interest in any of the Goods which SEM rightfully rejects or with respect to which SEM justifiably revokes acceptance, to secure payment by Seller of any portion of the purchase price paid by SEM and any damages suffered or losses incurred by SEM arising out of or relating to the defect or nonconformity giving rise to such rejection or revocation.
7. Warranty: Seller expressly warrants that all Goods covered by the P.O. (1) will conform to the Specifications; (2) will be properly labeled to disclose all materials used therein; (3) will be free of toxic lead paint and other known toxic materials; and (4) will be merchantable, of good quality and workmanship, free from defects and fit for the purposes intended. The limitation period set forth in section 2-275 of the UCC shall not be changed and any effort by Seller to do so shall be of no effect. Seller warrants that the use of any of the Goods, or of the products resulting from the services covered by the P.O. does not and will not infringe on any third party rights, including any patent, trademark, trade secret, trade dress or other intellectual property rights. SEM reserves the right at any time to make changes in the Specifications. Any difference in price or time for performance resulting from such changes shall be equitably adjusted, and the P.O. shall be so modified. Seller further warrants that all Goods and any related articles or labor to be furnished pursuant to the P.O. shall comply with the standards established pursuant to the Occupational Safety and Health Act of 1970 (29 USC 651 et seq., “OSHA”), as such act and standards exist at the time of shipment delivery or furnishing of such Goods, articles, or labor. Seller also warrants that all Goods and any related articles to be furnished pursuant to the P.O. shall comply with the statutory prohibitions against heavy metals in packaging under what is commonly known as CONEG legislation as such legislation exist at the tie of shipment, delivery or furnishing of such Goods. Seller agrees to supply to SEM from time to time updated material safety data sheets and all other documents and information required to be supplied under OSHA, CONEG and all other similar federal, state and local statutes, regulations and ordinances.
8. Certification: Where specified, unless otherwise agreed to in writing, Seller will provide all Certifications of Specifications to SEM’s satisfaction. Where applicable, Seller must provide a statement of FDA approval to SEM’s purchasing department. If any of the Goods are subject to the provisions of the Federal Food Drug and Cosmetic Act (21 USC 301, et seq.) , Seller will provide the written guarantee as contemplated by 21 USC 33©(2) that such Goods are not adulterated or misbranded. If Seller, pursuant to the P.O. delivers any hazardous chemicals or materials as that term is defined by OSHA or other similar federal, state, local statute, regulation or ordinance, Seller will provide SEM with a material safety data sheet relating to those hazardous chemicals or materials under 29 CFR 1910.1200 or other applicable provision.
9. Intellectual Property/License/Confidential information: To the extent, if any that the Goods include or embody any of SEM’s intellectual property, including trademarks, service marks, trade dress, copyrighted material or any other material, information or data which, in the form and manner presented, are proprietary to SEM, all such intellectual property shall be deemed confidential information and, as applicable, trade secret information and Seller shall have only a limited non-exclusive license to use the confidential information only to the extent necessary to complete the P.O. Seller must (1) employ safeguards appropriate for confidential information trade secrets; (2) not permit the use or disclosure of any confidential information to any person other than those who have a need to know to fulfill the P.O.; (3) report to SEM any attempted use of the confidential information in violation of the P.O. ; and (4) not reproduce or copy any confidential information except to fulfill the P.O. When no longer required to fulfill the P.O., Seller will return such confidential information or destroy it and provide acceptable proof thereof as SEM directs. Seller acknowledges that any breach of the provisions of this section would cause irreparable harm and therefore SEM, in addition to all other relief available at law or in equity or under the P.O., shall be entitled to equitable relief including injunctions and any other or additional relief available under the Uniform Trade Secrets Act as enacted in Massachusetts, including attorney’s fees even if the confidential information under consideration does not amount to a trade secret under that act.
10. Indemnity: Seller agrees to indemnity and hold SEM harmless from and against any and all Claims for any and all injuries or damages to any person or property, as well as any other Claims arising out of or related to a breach of any term or condition of the P.O. by Seller, its servants, employees, independent contractors, agents or representatives, including any breach of any express warranty provided in paragraph 7 herein or of any warranty provided or implied by law. Seller must provide adequate product liability insurance coverage listing SEM as an additional insured. Copies of all insurance policies must be provided to SEM upon request. Seller’s indemnification obligation shall include SEM’s attorney’s fees and expenses.
11. Prices: In all cases, (1) SEM shall not be billed at prices higher than those stated in the P.O.; (2) if no price is shown, SEM’s authorized agent must be notified of the price and must accept such price in writing prior to Seller filling P.O. Unless otherwise specified in the P.O., the price stated includes all charges for packing, hauling, storage and transportation FOB SEM’ dock. Except as otherwise required by federal or state laws, Seller agrees to pay any federal, state or local tax, or use tax which may be imposed upon the Goods. All taxes applicable to SEM and paid by Seller must be included in and shown separately on the invoice to SEM. Seller agrees that any price reduction made with respect to the items covered by the P.O. subsequent to its placement but prior to payment will be applicable to the P.O. Unless otherwise stated on the P.O., payment of the purchase price shall be due on or before sixty (60) days after the later of SEM’s receipt of; (1) Seller’s invoice or (2) the Goods. If the Seller is located outside the United States and deals in a currency other that the U.S. dollar, the parties will agree on a rate of exchange as of the time of the P.O. but if the parties fail to agree, SEM shall have the benefit of the more favorable rate of exchange based on the date of the P.O. or date of shipment of the Goods. SEM reserves the right to deduct, set-off or otherwise withhold payments determined by SEM to be due and owing by seller.
12. Events of Default: Seller shall be deemed to be in default if it violates any of the items of the P.O., if it fails to perform any of its obligations under the P.O., or if it performs or fails to perform any other act, whether pursuant to agreement or otherwise, which gives SEM reasonable ground to be insecure with respect to Seller’s future performance of the P.O. Seller further shall be deemed to be in default upon the occurrence of any of the following events, or of any other comparable event: (1) insolvency of Seller, (2) Seller’s filing of a voluntary petition in bankruptcy; (3) the filing of any involuntary petition to have Seller declared bankrupt provided it is not vacated within sixty(60) days from the date of filing; (4) the appointment of a receiver or trustee for Seller provide such appointment is not vacated within sixty (60) days from the date of such appointment; or (5) the execution by Seller of an assignment for benefit of creditors.
13. SEM’s Remedies Upon Seller’s Default: Upon default by Seller, SEM may exercise any an all the following rights and remedies in addition to such other rights and remedies as may be provided as well as all rights available under the UCC and otherwise at law and in equity: (1) reject or revoke acceptance or any or all of the Goods, whether or not such Goods are nonconforming and whether or not the condition or delivery thereof otherwise relates to, pertains to, concerns or gives rise to such event of default or (2) terminate the P.O. without obligation or liability whatsoever with respect to Goods not yet delivered to SEM at the time of such termination. SEM’s decision to pursue any one such remedy shall not deemed to be an election not to pursue any other remedy at the same time or any other time. In all cases, SEM shall be entitled to recovery of its reasonable attorney’s fees and expenses.
14. Equal Opportunity and Other Laws: By accepting the P.O., Seller warrants and certifies that the Goods have or will be produced in compliance with all applicable federal, state and local laws, rules and regulations, including the Fair Labor Standards Act; Executive Order No.11246, as amended; Section 503 of the rehabilitation Act of 1963, as amended; and (38USC2012) Vietnam Era Veterans Readjustment Assistance Act of 1974 and their implementing rules and regulations pertaining to equal opportunity employment. In the event any of the Goods are manufactured outside of the United States, Seller further agrees to comply with all applicable laws of the jurisdiction in which manufacturing occurs and in addition will insure that under no circumstances shall the Goods be manufactured or handled by indentured, slave or prison labor or by children under the age of 14 years or such older as may be imposed by the applicable law of the jurisdiction in which manufacturing occurs.
15. Conflicts: To the extent that there are conflicts between these standard terms and conditions and the accompanying purchase order or purchase agreement not including these standard terms and conditions, the conflicts shall be resolved in favor of the accompanying purchase order or purchase agreement without including these standard terms and conditions.
16. General: Except to the extent the P.O. may be referred to or incorporate by reference in any separate agreement between SEM and Seller, the P.O. shall constitute understanding and contract between Seller and SEM with respect to the subject matter hereof. SEM shall not be bound by any purported rescission or modification or waiver is set forth in writing signed by an authorized representative of SEM. No waiver of any provision of or default under such contract in any particular instance shall be deemed or construed a waiver of any other provision or default, whether similar or otherwise, in any other instance. All provisions of the P.O. providing for any act or activity or forbearance following fulfillment of the P.O. (including sections 7, 8, 9 and 10) shall survive fulfillment of the P.O. until such time as the provisions have been fulfilled or satisfied or until the period of time which is included in such provisions specifically or by reference has expired. Nothing in the P.O. shall be construed so as to make the parties partners or joint ventures; the relationship of the parties is that Seller is an independent contractor manufacturing the Goods for SEM. The P.O. is not assignable by Seller but may be assigned by SEM. Customer is solely responsible for complying with all laws applicable to the use of the goods. If any provision of the P.O. is held invalid by any court in a final decision from which no appeal can be taken, such provision shall be deemed modified to eliminate the invalid element and as so modified, such provision shall be deemed a part of the P.O. The invalidity of any provision of the P.O. shall not affect the force and validity of the remaining provisions. The contract between the parties shall be governed in all respects by and interpreted in accordance with the laws of the state of Massachusetts without application of its conflict of laws provisions. Seller agrees to the jurisdiction of the state and federal courts located in Massachusetts.