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Ongoing Agreement For Sale Of Goods
ONGOING AGREEMENT FOR SALE OF GOODS
Agreement made [Date of Agreement], between [Name of Seller], of
[Address of Seller], [City of Seller], [State of Seller], in this agreement referred to as seller, and [Name of Buyer], of [Address of Buyer], [City of Buyer], [State of Buyer], in this agreement referred to as buyer.
RECITALS
A. The parties contemplate that buyer will purchase from seller and seller will sell to buyer certain product items on an ongoing basis;
B. To avoid having to resolve questions of conflicting terms and conditions on purchase orders and purchase order acknowledgments each time buyer places an order with seller, the parties are willing to enter into an agreement that sets forth the terms and conditions that will govern all such transactions between them.
In consideration of the above recitals and the covenants and conditions contained in this agreement, the parties agree as follows:
SECTION ONE: DEFINITION OF PRODUCT
The term product means those items for which buyer issues to seller a purchase order during the term of this agreement.
SECTION TWO: ISSUANCE OF PURCHASE ORDERS
Buyer may issue purchase orders [order] to seller from time to time. Each purchase order shall contain a description of the products ordered, the quantities and prices, the shipment schedule, the terms and place of delivery, and the following notation: This order is issued pursuant and subject to Agreement No. between seller and buyer. Every purchase order issued by buyer to seller following the effective date of this agreement and bearing such a notation shall be governed by and be deemed to include the provisions of this agreement. In the event of any inconsistency between the terms and conditions of this agreement and the terms of a purchase order, the terms and conditions of this agreement shall prevail.
SECTION THREE: TERM
The term of this agreement for purposes of purchase order placement shall commence on the effective date stated above and continue for a period of [number] [months] thereafter. This agreement shall be renewed automatically for similar -month periods unless either party, at least days prior to the end of any such -month period, gives the other party written notice of its intent not to so renew.
SECTION FOUR: CANCELLATION FOR CAUSE
Either party may cancel this agreement in the event the other party is in default of any of the material provisions of this agreement or is in default under any order, the such default is not cured within days of receipt by the other party of written notice from the party giving notice specifying the nature of the default and corrective action that may be taken, if any.
SECTION FIVE: TERMINATION
A. Buyer may terminate work under an order in whole or in part at any time by written notice to seller that states the extent and effective date of the termination. On receipt of the notice, seller shall, to the extent directed by buyer, stop work under the order, and take any necessary action to protect property in sellers possession that belongs to buyer or in which buyer has an interest.
B. If, within a reasonable length of time, the parties cannot agree on the amount of fair compensation to seller for the termination, buyer, in addition to making prompt payment of amounts due for material delivered or services performed prior to the effective date of termination, will pay to seller the following amounts without duplication: (1) the contract price for all material andor services that have been completed in accordance with the order and not paid for; (2) the actual costs incurred by seller that are properly allocable or apportionable under recognized commercial accounting practices to the terminated portion of the order, including the cost of discharging liabilities that are so allocable and apportionable; and (3) the reasonable costs of seller in making settlement under this agreement and in protecting the property in which buyer has or may acquire an interest. Payments made under this paragraph, exclusive of payments under the immediately following paragraph, shall not exceed the aggregate price specified in the order, less payments otherwise made or to be made.
C. With buyers consent and agreement or approval, seller may retain or sell any completed items, or any items, materials, or work in process, the cost of which is allocable or apportionable to the order under the immediately preceding paragraph, and will credit or pay the amounts so agreed or received, transfer title, and make delivery as buyer directs.
SECTION SIX: PACKING, SHIPPING, PRICING, AND PAYMENT
A. All items shall be suitably packed, marked, and shipped as designated by buyer or, in the absence of such a designation, in accordance with the requirements of common carriers in a manner to secure lowest transportation cost, and no additional charge shall be made to buyer.
B. Prices for products shall be based on delivery F.O.B. buyers facility in the City of , State of [State of Jurisdiction].
C. There will be no additional charges to buyer for packing.
D. Seller will insure shipments by commercial maritime shippers at full value plus percent. Seller will not insure air freight shipments for more than the minimum coverage offered by the carrier.
E. Shipments for which buyer is responsible for transportation charges must be properly described on the bill of lading to obtain the lowest applicable charge. The lowest valuation available must be declared when the carrier offers released valuation rates.
F. All local, state, and federal excise, sales, and use taxes, when applicable, shall be stated separately on sellers invoices.
G. Sellers invoices shall contain the following information: (1) buyers purchase order number; (2) part number; (3) description of goods shipped; and (4) quantity of goods shipped and unit price applicable to the goods.
SECTION SEVEN: DELIVERY
A. Seller shall expend its best efforts to conform to the mutually agreed delivery date(s) for products ordered pursuant to this agreement. The mutually agreed delivery date for purposes of purchase orders placed pursuant to this agreement shall be a date that allows, at the minimum, the lead time, expressed in weeks after receipt of order. In the event of failure of delivery on the delivery date, buyer will give seller written notice of delinquency allowing seller a reasonable time to cure. In no event shall seller be considered in default of its obligation under this agreement to deliver until days after the notice. Unless otherwise specified in connection with a particular order placed pursuant to this agreement, title to and risk of any loss of or damage to the products shall pass from seller to buyer when they are delivered as specified in the order, except for loss or damage resulting from sellers fault or negligence or failure to comply with an order. Passing of title upon the delivery shall not constitute acceptance of the products.
B. Seller shall notify buyer immediately of any circumstances that may cause a delay in delivery stating the estimated period and reasons for delay and, if requested by buyer, shall use additional effort, including premium effort, and shall ship via air or other expedited routing to avoid or minimize delay to the maximum extent possible, all at no change in the price, and without prejudice to any of buyers rights or remedies.
C. In spite of any other provisions of this agreement, if shipment cannot be or is not made within days after the date scheduled on any order, buyer may, upon knowledge of the fact and whether or not the delay would be excusable as provided below, terminate the order by written notice to seller and, in spite of any other provisions of this agreement, the termination shall be without cost to buyer and shall discharge all obligations and liabilities of the parties under the order except as to products delivered previously.
SECTION EIGHT: INSPECTION
Seller shall inspect and test all products prior to shipment to buyer. Notwithstanding any prior payment or inspection by buyer, all products shall be subject to final inspection and acceptance by buyer at buyers facility in the City of , State of , or in accordance with quality control standards to be agreed upon by buyer and seller. Final inspection and acceptance or rejection will be made by buyer within days after receipt of products, and failure of buyer to reject any product within days after receipt shall constitute acceptance. Should buyer reject any product for failure to conform to the requirements of an order, buyer shall notify seller of the rejection, giving detailed reasons for the rejection. Seller shall then have the option to repair or replace the nonconforming product within days at buyers or sellers facility. Rejected items to be returned to seller shall be shipped at sellers expense. Should seller fail to act to correct any nonconforming product within days after notice by buyer, then buyer may, at sellers risk and expense, return any nonconforming product to seller.
SECTION NINE: INSPECTION AT SOURCE
If an order indicates that any product is to be subject to inspection by buyer or its representative at sellers premises, seller, without cost to buyer, shall provide all reasonable facilities and assistance for the safety and convenience of the inspectors. At the time of inspections, seller shall make available to the inspectors copies of all drawings, specifications, and packaging data applicable to the items. The inspection shall be deemed as preliminary only and all items shall be subject to final inspection and acceptance at buyers facility.
SECTION TEN: EXCUSABLE DELAY
Neither party shall be liable to the other for damages for any delay arising out of causes beyond its reasonable control and without its fault or negligence.
SECTION ELEVEN: WARRANTY
Seller warrants to buyer that all products delivered under an order shall be free from defects in materials and workmanship, that all products will conform to the requirements of the order including, but not limited to, the applicable descriptions, specifications, and drawings that shall have been agreed to by the parties and, to the extent the items are not manufactured pursuant to detailed designs furnished by buyer, that all items will be free from defects in design and suitable for the intended purposes. The warranty period shall extend to final acceptance by buyer or buyers customer in accordance with the final acceptance test procedures as mutually agreed between buyer and seller, whichever occurs last.
SECTION TWELVE: CHANGES
A. As to any product, buyer reserves the right at any time to make changes in (1) its drawings and specifications, (2) methods of packaging and shipping, (3) schedules, (4) quantities, and (5) the place of delivery. Any difference in price or time for performance resulting from the changes shall be equitably adjusted and the order shall be modified accordingly in writing, but any claim by seller for any adjustment must be made in writing within days of the receipt of the change orders.
B. Seller shall not initiate or make any change or modification in the performance, specification, design, materials, or components in or of the product without, in each case, having received buyers prior written consent to any proposed change or modification. The acceptance of any product that has been so changed or modified without buyers prior written consent shall be subject to revocation and buyer may reject the product at any time in spite of any time limitations contained elsewhere in this agreement. Further, seller shall be liable and shall defend, indemnify, and hold buyer harmless for any claims or damages, direct or indirect, incidental or consequential, arising from or occasioned by any change or modification to the product that has not been approved by buyer, notwithstanding any other limitations or waivers of liability, warranty, or remedy contained in this agreement.
SECTION THIRTEEN: BUYERS DESIGN AND PROPERTY
A. Seller shall keep confidential the features of any equipment, tools, gauges, patterns, designs, drawings, engineered data, or other technical or proprietary information furnished by buyer, and will use the items only in performing under this agreement. In no event shall seller use data, designs, or information supplied by or on behalf of buyer or cause others to do so without buyers prior, express, and written consent. On termination of this agreement, seller shall return all such items and copies made by seller to buyer or make the other disposition as buyer directs or approves.
B. Any material furnished by buyer on other than a charge basis in connection with this agreement shall be deemed to be held by seller on consignment. Seller shall pay for any the material damaged, destroyed, or not satisfactorily accounted for. Buyer will specify acceptable scrap allowances, if any, and seller will pay for any amount in excess of the allowances at buyers cost. All tools, gauges, dies, and other equipment furnished to seller by buyer shall remain buyers property and shall be identified clearly by seller as Property of and shall be stored safely and not used except in performing pursuant to this agreement. The property, while in sellers possession, shall be maintained in good condition at sellers expense and shall be kept insured at sellers expense in an amount equal to the replacement cost, with loss payable to buyer. Buyer may remove its property from sellers premises at any time, with or without prior notice.
SECTION FOURTEEN: PATENT RIGHTS
When performance under this agreement involves sellers performance of experimental, developmental, or research work, seller shall promptly disclose to buyer and, on request, assign to buyer without additional compensation full and complete title to each improvement and invention conceived or reduced to practice thereunder, free and clear of any encumbrance or restriction, and, for this purpose, seller will procure the execution of all documents necessary to vest full title to the improvements and inventions in buyer. Additionally, where buyer decides to file foreign or domestic patent applications on the inventions, seller will procure the execution of all oaths, declarations, and other documents necessary to file the patent applications and to vest full title in buyer.
SECTION FIFTEEN: PATENT INDEMNITY
A. Seller warrants that any items purchased pursuant to this agreement, and the sale andor use of them, will not infringe any United States Letters Patent, and seller agrees to indemnify, defend, protect, and save harmless buyer, its successors, assigns, customers, and users of its products from all damages, costs, and expenses, including attorneys fees, arising from a claim for actual or alleged infringement of any patent by reason of the manufacture, use, or sale of items, and seller agrees at its own expense to undertake the defense of any suit against buyer brought on any such claim. If the use or sale of any such item is enjoined as a result of the suit, seller, at no expense to buyer, shall obtain for buyer and its customers the right to use and sell the item, or shall substitute an equivalent item acceptable to buyer and extend this patent indemnity to the item.
B. To the extent that items purchased pursuant to this agreement are manufactured in accordance with detailed designs furnished by buyer, buyer agrees to indemnify seller and hold seller harmless from all legal expenses that may be incurred as well as all damages and costs that may finally be assessed against seller in any action for infringement of any United States Letters Patent by any such item delivered pursuant to this agreement. Seller agrees promptly to inform buyer of any claim for liability made against seller with respect to any such item and seller agrees to cooperate with the buyer in every way reasonably available to facilitate the defense against any such claim.
SECTION SIXTEEN: INDEMNIFICATION
Seller agrees to indemnify and hold harmless buyer, its officers, agents, and employees, from and against any and all liabilities, damages, losses, costs, and expenses for injury or death of any officer, agent, or employee of seller, arising out of or in connection with products and services to be provided under this agreement. Buyer agrees to indemnify and hold harmless seller and its officers, from and against all liabilities, damages, losses, costs, and expenses for injury or death of any officer, agent, or employee of buyer, arising out of or in connection with products and services to be provided under this agreement. Seller and buyer also each agree to release and waive any liability of and claim against the other, its officers, agents, and employees, for loss of or damage to property, including loss of use arising directly or indirectly out of or in connection with the others performance under this agreement.
SECTION SEVENTEEN: CONFIDENTIAL INFORMATION
Seller shall regard as highly confidential all information developed by or communicated to it in the course of or in connection with its performance under this agreement, and shall not, without buyers prior, express, and written approval, make any oral or written disclosures of the confidential information, either during or after the term of this agreement, except to buyers employees and other authorized persons who may be designated to work with seller in performing under this agreement.
SECTION EIGHTEEN: NOTICES
All notices and other communications required or authorized under this agreement shall be given in writing either by personal delivery or by registered mail addressed to the respective party at the addresses indicated at the beginning of this agreement.
SECTION NINETEEN: COMPLIANCE WITH LAWS
In performing under this agreement, all applicable governmental laws, regulations, orders, and other rules of duly-constituted authority will be followed and complied with in all respects by both parties.
SECTION TWENTY: REMEDIES
The remedies reserved in this agreement shall be cumulative and in addition to any other remedies provided in law or equity. No waiver of breach of any provision of this agreement shall constitute a waiver of any other breach of the provision.
SECTION TWENTY-ONE: ASSIGNMENT
No assignment by either party of any rights, including rights to moneys due or to become due under this agreement, or delegation of any duties under this agreement or under any orders subject to this agreement, shall be binding upon the other party until its written consent has been obtained.
SECTION TWENTY-TWO: NON-WAIVER
Any failure by either party to enforce any provision of this agreement or of any order shall not constitute a waiver of the provisions or prejudice the right of either party to enforce the provision at any subsequent time.
SECTION TWENTY-THREE: HEADINGS
Headings used in this agreement are for convenience reference only and shall not affect the interpretation of the agreement.
SECTION TWENTY-FOUR: PARTIAL INVALIDITY
If any provision of this agreement or of any order is or becomes void or unenforceable by force or operation of law, the other provisions shall remain valid and enforceable.
SECTION TWENTY-FIVE: MODIFICATION
Oral statements and understandings are not valid or binding, and neither this agreement nor any order shall be changed or modified except by a writing signed by both parties.
SECTION TWENTY-SIX: GOVERNING LAW
This agreement shall be construed and enforced in accordance with the laws of the State of [State of Jurisdiction].
Each party to this agreement has executed it at [Place of execution] on the date indicated below.
Signature Date
Signature Date