TERMS & CONDITIONS
- Definitions:
- Terms and Conditions (Standard Terms and Conditions of purchasing products or “agreement” defined as any agreement that incorporates, by reference of attachment, these “Terms and Conditions”.
- Sonju Industrial, Inc. “Buyer” and/or “SI”
- “Supplier” equates with that entity providing products and services.
- “Party” or “Parties” means Buyer or Supplier, individually or collectively, as the context requires.
- “Lead Time” means the maximum time within which Supplier agrees to deliver Goods after receipt of a delivery requirement.
- “Party” or “Parties” means Buyer or Supplier, individually or collectively, as the context requires.
- “Terms and Conditions” means Sonju Industrial, Inc., Standard Terms and Conditions of Purchase – Product.
- Applicability:
- These purchasing terms and conditions apply to all present and future transactions between Sonju Industrial Inc. (SI) and its suppliers. The Supplier’s terms and conditions, which are not expressly recognized on us, do not impose any obligations on us, even if Sonju Industrial has not expressively repudiated them. The acceptance of the goods and services and payment therefore do not count as any recognition of the supplier’s terms and conditions of sale.
- Quotations
- The supplier should formulate their quotation in accordance with Sonju Industrial’s inquiry. In the event of deviations there from, the supplier is expressly to draw attention thereto in their quotation. The supplier will be bound by its quotation for a timeframe negotiated during the quoting process as this will be dependent on commodity, size of potential purchase, relationship with supplier and timing of customer fulfillment.
- Unless otherwise expressly agreed, estimates are binding and are to be submitted free of charge to us.
- Confirmation of Order
- Sonju Purchase Orders are to be confirmed in writing, giving a binding delivery date and Sonju Industrial’s order number and all other order details. Confirmation of purchase order will be deemed accepted at the prices and on the conditions specified by Sonju Industrial Inc. By accepting a purchase order, from Buyer, Supplier agrees to Buyer’s “Terms and Conditions,” set forth in this agreement, including any alteration, addition, and modification thereafter.
- If the confirmation of the order is at variance with the order, the anomalies must be expressively listed. These will be deemed to be a constituent part of the contract only if confirmed and agreed by Sonju Industrial in writing.
- Delivery Period
- Goods must be available on the agreed delivery date or within the agreed delivery period of fulfillment.
- As soon as the supplier is given reason to believe that the delivery date will be subject to change, he must notify us of this effect immediately on being made aware thereof, giving reasons therefore and a new delivery date. Any losses arising out of a breach of this duty are to be borne by the supplier.
- In the event that goods are delivered earlier than one month before the specified delivery date, Sonju Industrial will be entitled to refuse delivery or to return goods to the supplier at their expense.
- After the delivery date or delivery period has expired, the supplier will be in default without any reminder to that effect and may be responsible for paying all freight services and will forgo any “expedited” services per the purchase order.
- If the supplier defaults, he will be liable for the consequences of the delayed delivery, at minimum the sum of 1.5% per week of the value of the goods, without this requiring any proof of loss on Sonju Industrial. The supplier shall be free to prove that Sonju Industrial has suffered a lessor loss. After the expiration of a reasonable extension of time, Sonju Industrial will be entitled to decline the fulfillment of the customer’s undertaking and to demand compensatory damages, specifically to place hedging orders at the supplier’s expense. This will include any partial deliveries, even if the supplier is not responsible for his failure to meet the specified delivery date, Sonju Industrial will be entitled to withdraw from the contract, either wholly or in part, after the expiration of an extension of time with no result.
- Delivery
- The supplier will only be entitled to make partial deliveries if the goods are called off in partial quantities from them on the purchase order or at the request of Sonju Industrial. Acceptance of purchase order includes the delivery of goods to the agreed upon schedule therein. Partial orders not approved, or delinquent orders that do not meet requirements will result in delayed payment, and or no payment if parts are deemed non-conforming.
- Buyer reserves the right to “express freight” at Supplier expense if delivery date has been eclipsed.
- Failure to deliver goods per schedule can result in penalties from end user. In the case of such penalty, Sonju Industrial reserves the right to pass those penalties to the seller.
- Packing, transport, transfer of risk
- The seller will package goods in accordance with good commercial practice unless the Purchase Order includes specific instructions. Each shipping container shall be clearly and permanently marked as follows: (a) Seller’s name and address; (b) Consignee’s name, address and purchase order or purchase change order number; (c) Container number and total number of containers, e.g., box 1 of 4 boxes; and (d) Number of the container bearing the packing slip
- The costs of packing and transport of the goods to the place of fulfillment are to be borne by the supplier, unless otherwise agreed upon. This will also apply to the return of goods. If a separate charge for the packing materials is agreed, this is to be credited to us in full when they are returned carriage paid.
- In some cases, the product delivered may take time to inspect due to the size and/or quantity of the product delivered. The supplier agrees to allow Sonju Industrial a fair and reasonable amount of time to inspect the product (48 hours) for freight damage, and/or inspection compliance after receiving the product. Sonju Industrial will notify the seller by phone, writing or email of any discrepancies.
- The risk of the goods in transit is to be borne by the supplier. The risk will only pass to Sonju Industrial with the acceptance of the goods at the place of fulfillment. Sonju Industrial will not accept the costs of insurance in transit. Upon inspection, if goods have been determined that they were damaged during freight, Sonju Industrial will notify the seller in writing. After notification the seller is responsible for contacting the freight or delivery company used and negotiate damage and/or loss estimates, and will be responsible to repair or replace goods that meet the contractual obligations of the purchase order in a timely manner.
- Hazardous materials are to be marked as such, in a manner appropriate to the end user. The corresponding safety data sheets are to be delivered at the same time.
- Transfer of debt
- Debts may only be transferred to a third party with Sonju Industrial’s written agreement.
- Quality, Inspection, Acceptance and Rejection of Goods
- The supplier is to guarantee that goods and services comply with the statutory regulations governing safety, health and safety at work and the prevention of accidents, other statutory provisions, the latest recognized technological regulations, Sonju Industrial’s order documents and the characteristics which are not only guaranteed by the supplier but are also customarily incorporated and are necessary for the intended purpose.
- During the Inspection Period, Buyer may: (i) reject all or a portion of any nonconforming Goods; or (ii) accept all or a portion of such nonconforming Goods with a price reduction for the cost of repair or the diminution of value.
- The supplier is to apply a Quality Management System (QMS) of a suitable type and scope that documents processes/results in a suitable form which are retained with the Supplier for a minimum period specified in the Supplier Records section of this agreement. QMS must also address requirements for competence, including any required qualification of person and Supplier’s responsibility to ensure persons are aware of contribution to product safety and the importance of ethical behavior.
- Within 30 days of Supplier’s receipt of Buyer’s notification of a nonconformity, Supplier shall, at Supplier’s sole cost and expense, investigate the nonconformity, deliver to Buyer a written report of its investigation and conclusions, and formulate a corrective action plan acceptable to Buyer. Once approved by Buyer, Supplier must then timely implement such corrective action plan.
- If so requested, the supplier is to make test documents available, together with mixing ratios for the materials used.
- The supplier must notify SI immediately upon discovering a nonconforming product, to include products already shipped.
- Prior to shipping any nonconforming product to SI, written approval to ship must be received from SI, in addition all nonconforming products must be conspicuously labeled and written evaluation of nonconformance must accompany all nonconforming parts with a corrective action statement.
- Notwithstanding any other provision, in addition to the foregoing, Supplier shall be liable for Buyer’s actual costs, expenses, and damages related to or arising from nonconforming goods, including, but not limited to, labor and other costs related to transportation, expediting, removal, disassembly, failure analysis, fault isolation, assembly, reinstallation, re-inspection, retrofit, replacement, and any and all other such corrective action costs incurred by Buyer.
- Suppliers may not subcontract production or processing to another supplier without written consent from SI.
- If a counterfeit material condition is found at any stage of the supply chain, all parties involved with the production of the counterfeit material condition shall participate in an investigation to determine the root cause of the counterfeit material condition. Counterfeit Work shall be defined as work that contains items that have been misrepresented as having been designed or produced under an approved system or acceptable method. Counterfeit items shall be distinguished from non-counterfeit items by separating them at the lowest level.
- The supplier shall ensure that any counterfeit material condition is not delivered to SI.
- If any changes to certifications, registration, or accreditation occur, notification to Customer(s), Member(s), and Suppliers is required within 48 hours.
- Supplier required to identify special requirements, critical items, or key characteristics; and
- The use of statistical techniques for product acceptance and related instructions for acceptance by SI as specified by purchase order to satisfy standards.
- Changes in Process or Method of Manufacturing. Seller agrees that it will not invoke any changes in its processes, method of manufacturing, product, suppliers or facilities during the term of this purchase order without Sonju Industrials prior written consent, and any contemplated changes will be submitted to Sonju for reasonable evaluation prior to any change.
- Any changes to manufacturing need to be provided in writing prior to making changes.
- Any changes to the process will result in the Supplier to perform a First Article Inspection, but not before notifying the Buyer immediately.
- Supplier Records
- All suppliers of Sonju Industrial must maintain quality records with a retention time of 20 years. Minimum for all documents SI at random intervals may request copies of such documents to verify product compliance.
- Sonju Industrial reserves the right at any time to request quality documents and records.
- Sonju Industrial manufactures sensitive products for the Department of Defense and major primes who mandate ITAR requirements and non-disclosure agreements. SI’s customers require its documentation (i.e. digital data, drawings, parts lists) to be properly secured during and after the manufacturing process. In most cases, these requirements call out that the documentation to be destroyed or returned once the manufacturing process has been completed. To comply, SI has the right to request in writing that the documentation has been destroyed or has been returned.
- By accepting SI’s purchase orders you grant the right of access by SI, its customers and regulatory authorities to all facilities involved in the order and to all applicable records. By accepting SI’s purchase orders you may be audited by SI and/or its customers at any time to ensure compliance.
- All SI suppliers must submit independent (third party) material verification within the packing slip for all material shipped to SI if requested.
- Guarantee/Warranty
- Sonju Industrial will check goods and services on receipt for completeness and quality within the framework of Sonju Industrial’s capabilities and in a reasonable scope. For complaints of obvious defects, a period of 7 days after receipt by us or (in the case of direct business) by Sonju Industrial’s customer will be deemed to have been agreed.
- For complaints of concealed defects, a period of 28 days will apply after the discovery of the defect on Sonju Industrial’s premises or after the receipt of the notification of the defect by Sonju Industrial’s customer to us.
- If a consignment or service is defective, Sonju Industrial will be entitled, at Sonju Industrial’s discretion, to demand repairs or a fee replacement consignment and, without exception, to a refund of the costs associated with the delayed completion of Sonju Industrial’s order. After the expiry of an extension of time without result, Sonju Industrial will be entitled to rectify the defect or to have it rectified, at the supplier’s expense or to withdraw from the contract or to reduce the purchase price.
- In case of breaches of duty attributable to the supplier or breaches of duty arising from the transfer of a guarantee or from the risk entailed in a procurement by the supplier, Sonju Industrial will be entitled to demand compensatory damages, also compensatory damages instead of the completion of the order after the expiry of a reasonable extension of time without result.
- If no provision is made for a longer period by law or the usual market code of practice, claims arising out of breaches of duty will be barred by the statute of limitations after 36 months. In the case of a replacement consignment, the period of limitations will start anew from the time of the fulfillment of Sonju Industrial’s claims. In the case of repairs, this will be confined to those parts of the consignment which have been repaired.
- The supplier will assign to us, by way of fulfillment, all the debts owed to SI by his subcontractor arising in connection with the breach of duty. If necessary, he is to hand over to us all the documents necessary to enforce the said debts.
- The supplier is expressly to waive any plea of a delayed complaint. Payment of the invoice by us does not constitute any recognition of the freedom from defects of the delivered article.
- Liability
- If, based on statutory provisions, a breach of official safety regulations, an infringement of the protected rights of third parties or for any other reason, Sonju Industrial is made liable, Sonju Industrial will be entitled to demand repayment from the supplier of the loss incurred by us if the supplier’s consignment or service was the original cause of the loss incurred. This will also apply to the costs arising in connection with any prosecution or recall action whatsoever.
- Production materials supplied by Sonju Industrial.
- Production materials supplied by SI or made for SI which includes but not limited to (illustrations, drawings, models, tools, tooling, fixtures, inspection tools, samples, gauges, working documents, etc.) may only be used for the purpose of compiling the quotation Production materials supplied by SI may not be made accessible to third parties without Sonju Industrial’s written agreement.
- The acceptance or takeover of production material does not mean that Sonju Industrial waives claims under the guarantee or for compensatory damages, or that Sonju Industrial accepts the liability for dimensional discrepancies, faults of infringements of patents, or licenses or other third-party rights.
- The Supplier is liable for any damages that occur (other than normal wear and tear) while in possession of SI supplied materials and hardware procured and paid for by buyer.
- Payment Terms
- Payment of invoices shall be negotiated between Buyer and Supplier before granting/accepting purchase order.
- Payment will occur (to the agreed payment terms) after the goods have been inspected for shipping damage, and/or validating part compliance per drawing and purchase order requirements are satisfied. This includes paperwork including but not limited to any certifications, including first article requirements or any “flow down” requirements. Any delays due to partial deliveries, paperwork, or non-compliance will result in delayed payments.
- Payment of the invoice will commence when the product has been received by the purchase order and the payment terms within. Partial deliveries, or quantities ordered that do not meet the agreed schedule will be paid when those items are received in full.
- Invoices must include Sonju Industrial’s order number and all the other order details, the designation of individual prices and the number and date of the delivery.
- Secrecy/Intellectual Property/Proprietary Information
- All inquiries, orders, papers, packages, and any other correspondence, together with material supplied for the preparation of the quotation or completion of the order are to be considered as business secrets and treated with confidentiality. This also applies to anonymous transfers. Subcontractors are to be placed under a corresponding obligation.
- The supplier may only make use of his business connection with us in publicity with Sonju Industrial’s prior written agreement.
- Proprietary Information” shall mean all information, knowledge, or data (including without limitation financial, business, and product strategy information; product specifications; product designs; procedures; studies; tests; and reports) in written, electronic, tangible, oral, visual, or other form, (i) disclosed by, or obtained from, Buyer, or (ii) conceived, created, acquired, or first reduced to practice in connection with an Order. If Buyer furnishes Buyer Items to Supplier, such Buyer Items shall be used and the information obtained therefrom shall be treated as if it was Proprietary Information disclosed in connection with an Order.
- All Sonju Industrial Inc. documentation and data and Sonju’s customer documentation and data are considered proprietary and subject to nondisclosure without Sonju Industrial written permission.
- Obsolescence
- The Supplier shall notify Buyer in writing when a component, part, or any goods or services become obsolete. Supplier shall notify Buyer at least 24 months prior to an anticipated obsolescence occurs.
- If Supplier cannot fully mitigate Buyer’s risk associated with the anticipated Obsolescence issue by executing a Last Time Buy, then Supplier shall prepare a detailed Obsolescence replacement plan that assesses available alternatives and possible design modifications, including the associated testing and qualification. Such a plan shall be mutually agreed to by the Parties. In no event shall Buyer accept any cost increase due to Obsolescence of the Goods or any component thereof.
- Indemnification
- Supplier shall indemnify and hold harmless Buyer, Buyer’s Customers, insurers, Affiliates and their employees, agents, officers, and directors from and against all suits, claims, judgments, awards, losses, damages, costs, or expenses (including attorneys’ fees) relating to, arising out of, or caused by (i) Supplier’s performance hereunder, (ii) any act or omission of Supplier, or (iii) any Goods or Services. Supplier’s indemnification obligation hereunder covers, without limitation, injuries, sickness, diseases (including occupational disease whenever occurring), or death of Supplier employees.
- Taxes
- Unless otherwise stated in the Order, all payments or prices are exclusive of any transactional taxes, including sales and use, value-added, goods and services, or any other taxes, fees, or duties (“Taxes”) levied in regard to any of the transactions covered by the Order. Buyer is not responsible for any tax based on Supplier’s income, payroll, or gross receipts. Any Taxes that Supplier is required to collect from the Buyer shall be separately stated on the invoice and the Supplier shall be responsible for remitting any such Taxes to the relevant tax authority.
- Inspection and Audit Rights
- Supplier and Supplier Personnel shall at any time, and after reasonable notice by Buyer, grant to Buyer, Buyer’s authorized representatives, Buyer’s Customers and to any competent regulatory authority, (i) unrestricted access to (or if requested by Buyer, provide to Buyer copies of) Supplier’s books, records, and documentation related to compliance with the Order (including, without limitation, those pertaining to physical and network security and data privacy and protection procedures and controls), wherever such books and records may be located; and (ii) access to Supplier’s premises to perform any type of inspection, test, audit, or investigation with respect to Supplier’s premises and network, for the purpose of enabling Buyer to verify compliance with the requirements set forth in the Order or for any other purpose indicated by Buyer’s Customers or said authority in connection with the design, development, certification, manufacture, sale, use, or support of the Goods or Services.
- Any corrective action requested by Buyer, Buyer’s Customers, or any said authority following any such inspection, test, audit, or investigation shall be implemented by Supplier at Supplier’s cost.
- Insurance
- Commercial General Liability Insurance and Umbrella Liability Insurance, including Premises Liability and Contractual Liability, in which the limit of liability for property damage and bodily injuries, including accidental death, shall be at a minimum, a combined single limit of $5,000,000 for any one occurrence.
- In addition to the insurance requirements set forth above, Supplier also agrees to secure, maintain, and require its subcontractors to maintain, the additional insurance coverages and limits and
- Workers Compensation Insurance per U.S and State law in the minimum amount of $1,000,000 for any one occurrence.
- Force Majeure
- Supplier shall be liable for any failure or delay in performance in connection with an Order, except where such failure or delay results from causes that are, at one and the same time, unforeseeable, unavoidable, outside of its control and without its fault or negligence, provided Supplier gives Buyer, within 3 days of Supplier’s learning of such cause, written notice to the effect that a failure or delay by Supplier will occur or has occurred (a “Force Majeure Event”). If a failure or delay in performance is caused by an event affecting any of Supplier’s subcontractors, such failure or delay shall not be excusable unless such event is a Force Majeure Event as defined above and the good or service to be provided by such subcontractor is not obtainable by Supplier from other sources in time for timely delivery of the Goods to Buyer. Buyer may cancel any Order without liability to Supplier for its purchase of any Goods affected by Supplier’s failure or delay in performance and, if the delay is expected to last for a period that could impact deliveries to Buyer’s Customers, Buyer may cancel, without liability, any portion of or the entire Order.
- Assurance of Performance
- At any time, if Buyer, in its reasonable discretion, believes that Supplier may not have the ability, for any reason, to continue performing any Order, including, without limitation, any material change to Supplier’s financial condition, balance sheet, or its credit or similar rating, Buyer may request, and Supplier shall provide, written adequate assurances from Supplier of its ability, desire, and intent to continue performing. Buyer will specify the nature of its concerns, and Supplier will provide Buyer with documents, financial data, or other information needed to satisfy Buyer’s concerns. Further, Supplier will immediately notify Buyer in the event Supplier believes it may be unable to pay its debts when due or there is a material change in Supplier’s financial position, balance sheet or its credit or similar rating. In the event either or both Parties have concern about Supplier’s ability to continue its performance, the Parties will coordinate to ensure that Buyer receives Goods and Services without interruption in accordance with the Order. Supplier will assist and compensate Buyer for the costs associated with transitioning to another supplier, Buyer assuming the production of the Goods or performance of the Services itself, protecting the tooling and other equipment necessary for production of the Goods and performance of the Services, and taking other reasonable steps to ensure the Goods are produced and Services performed without interruption according to Buyer’s Specifications. Buyer shall also have the right to require Supplier to (i) obtain a guarantee from a controlling party of, or a secured party to, Supplier, if applicable, and (ii) implement remedial actions directed by Buyer to improve Supplier’s performance under the Order.
- Termination for Default
- Buyer may, by written notice, terminate the Agreement or any Order, or any portion thereof, for default without any liability or obligation whatsoever to Supplier for the portion terminated, in the following circumstances: (i) Supplier fails to perform any obligation hereunder (other than a delivery obligation) and fails to cure such obligation within 10 days (or as otherwise mutually agreed) (the “Cure Period”); (ii) Supplier fails to perform any delivery obligation hereunder; (iii) when Buyer has reasonable grounds for insecurity, and Supplier fails to provide adequate assurances of performance in writing within 10 days following Buyer’s demand or, (iv) should Supplier (a) become insolvent, (b) become unable to pay its debts as they mature, (c) make a general assignment for the benefit of creditors, or (d) have a receiver appointed for the whole or any substantial part of its assets or become in any way the subject of a bankruptcy petition (each in Subsection (iv), a “Supplier Insolvency”). Notwithstanding the foregoing, if a cure is not possible within such Cure Period, Supplier shall submit to Buyer, within a period of 10 days after receipt of notice from Buyer specifying such failure, a detailed plan to cure such failure (including related time period) acceptable to Buyer in its sole discretion, provided, however, that if such a cure plan is approved by Buyer, Supplier’s subsequent failure to comply with such cure plan shall be deemed a default hereunder, and Buyer may terminate immediately without additional cure periods.
- Buyer shall have no liability in relation to those Goods and Services terminated for Supplier’s default. Supplier shall be liable to Buyer for all expenses, costs, and damages including increased re-procurement costs, requalification costs, and other non-recurring costs, except in the circumstance of any failure or delay constituting a “Force Majeure Event” as set forth in the Section herein entitled “Force Majeure”.
- General Provisions
- The place of fulfillment for deliveries or services is Kalispell, MT or a delivery address specified by us. The place of fulfillment for payments is Kalispell, MT.
- The legal venue will be Kalispell, MT, the location of the supplier’s registered office or the fulfillment, whichever Sonju Industrial chooses.
- If any of the individual provisions of these General Terms and Conditions of Business are or becomes invalid, this will not affect the legal validity of the other provisions. The parties to the contract have a duty to replace the invalid provision by another provision, which most closely approaches it in its commercial effect.
