Quality Criteria. 6.1 Seller must maintain a quality standard at least comparable to those furnished by Seller to Seller's preferred customers and at least equivalent to those offered to Seller's preferred customers as of Effective Date. Buyer may, during normal business hours, make reasonable inspections at such intervals as Buyer deems necessary of the facilities where Seller prepares and prints the Products. 6.2 If, during any calendar quarter during the term of this Agreement, defective Products attributable to Seller's faulty production exceed three percent (3%) of the aggregate Products shipped during such quarter, Buyer may give prompt written notice thereof to Seller, accompanied by evidence of Seller's faulty production or customers' problems with regard thereto. Within thirty (30) days of its receipt of such notice and accompanying materials, Seller shall pay or credit Buyer with the replacement or reproduction costs of such excess, which for the purposes of this Section 6.2 shall be equal to the product of two times Seller's direct costs of the paper, packaging, and/or other media used in the replacement or reproduction of the defective Products exceeding three percent of the aggregate Products shipped during such quarter. Buyer agrees that, except as provided in Section 9.1, the payment by Seller of such replacement or reproduction costs shall be Buyer's exclusive remedy for the production by Seller of defective Products. 6.3 Seller recognizes that it is the objective of Buyer to establish customer-centric quality assurance priorities, standards and metrics; and that Seller and Buyer shall work cooperatively to establish systems and procedures to produce consistent improvement and elevation of the actual quality levels attained. HOWEVER, UNDER NO CIRCUMSTANCES SHALL SELLER BE LIABLE TO BUYER OR ANY OTHER PERSON FOR ANY DIRECT OR INDIRECT DAMAGES BEYOND THE COST OF REPLACING OR REPRODUCING DEFECTIVE PRODUCT AS CONTEMPLATED IN SECTION 6.2 (WHETHER CONSEQUENTIAL, INCIDENTAL, SPECIAL OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, LOST PROFITS) ARISING OUT OF THE PRODUCTS OR ANY DELAYS OR ERRORS IN SHIPMENTS. OTHER THAN AS STATED IN THIS AGREEMENT, SELLER MAKES NO REPRESENTATIONS, WARRANTIES OR GUARANTEES, EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCTS, INCLUDING, WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Appears in 1 contract
Sources: Supply Agreement (Mod Pac Corp)
Quality Criteria. 6.1 Seller must maintain a quality standard at least comparable to those furnished by Seller to Seller's preferred customers and at least equivalent to those offered to Seller's preferred customers as of Effective Date. During the Term, Buyer may, upon no less than 48 hours prior notice and during normal business hours, make reasonable inspections at such intervals as Buyer deems necessary no more often than once per calendar month of the facilities where Seller prepares and prints the Products.
6.2 IfSeller agrees that, during any each calendar quarter month of the Term, Products produced and shipped during such month representing at least 97% of the term aggregate of this Agreementall Products shipped during such month shall be Free From Defects. For purposes hereof, defective "Free From Defects" shall mean that the Buyer has received no complaints from its customers regarding such Products that (a) relate to printing quality errors, cutting quality errors and/or shipping errors of Seller; AND (b) result in a reorder, refund or merchandise credit for such Products to the customer that is attributable to Seller's faulty production exceed three percent (3%) of the aggregate Products error. If any Product shipped during such quarterby Seller hereunder is alleged to be defective, Buyer may shall give prompt written notice thereof to Seller, accompanied by evidence of Seller's faulty production or customers' problems with regard thereto, for review and confirmation by Seller's quality control personnel as to Seller's responsibility. Within Assuming Seller concurs that the defect is Seller's responsibility, Seller shall credit Buyer's account for the full invoice price associated with the defective customer order. In addition, if, during any calendar month during the Term, the percentage of Products shipped by Seller that are "Free From Defects" is less than 97%, then, Seller shall also pay to Buyer, or credit Buyer's account, an amount equal to 10% of the total invoice value for all Products that were not Free From Defects shipped by Seller during such month. For purposes of ascertaining the percentage of Products that are Free From Defects in any given calendar month, Buyer shall provide Seller, following the conclusion of each calendar month, an accounting of all items shipped during such month and those items which Buyer alleges to be defective, so that the parties may agree to the amount of Products that were Free From Defect during such month. In the event of any dispute between the parties as to whether or not a particular shipment was defective or not, the parties will attempt to resolve such dispute in good faith within thirty days, failing which, such matter will be referred to an independent arbiter acceptable to by both parties.
6.3 Seller agrees that, during each calendar month of the Term, that Products representing at least 95% of the aggregate - of all Products shipped during such month (30measured at the individual unit level) days shall be delivered to the Buyer designated shipper on or before the ship by date for such Products as specified in Section 2.3. Any Product that is not so delivered as a result of its receipt Buyer's (a) failure to provide timely electronic order data to Seller in accordance with Section 2.3 hereof or (b) delivery to Seller of incorrect electronic order data in accordance with Section 2.3, shall be considered to have been timely shipped for purposes of this calculation. If during any calendar month during the Term, the percentage of Products delivered to the Buyer designated shipper on or before the ship by date for such notice and accompanying materialsProducts as specified in Section 2.3 is less than 95%, then, Seller shall pay to Buyer, or credit Buyer with the replacement or reproduction costs of such excessBuyer's account, which for the purposes of this Section 6.2 shall be an amount equal to the product of two times Seller's direct costs 10% of the paper, packaging, and/or other media used in the replacement or reproduction of the defective total invoice value for all Products exceeding three percent of the aggregate Products that were not timely shipped by Seller during such quarter. Buyer agrees that, except as provided in Section 9.1, the payment by Seller of such replacement or reproduction costs shall be Buyer's exclusive remedy for the production by Seller of defective Productsmonth.
6.3 6.5 Seller recognizes that it is the objective of Buyer to establish customer-centric quality assurance priorities, standards and metrics; and that Seller and Buyer shall work cooperatively to establish systems and procedures to produce consistent improvement and elevation of the actual quality levels attained. HOWEVER, UNDER NO CIRCUMSTANCES SHALL SELLER BE LIABLE TO BUYER OR ANY OTHER PERSON FOR ANY DIRECT OR INDIRECT DAMAGES BEYOND THE COST OF REPLACING OR REPRODUCING DEFECTIVE PRODUCT AS CONTEMPLATED IN SECTION 6.2 (WHETHER CONSEQUENTIAL, INCIDENTAL, SPECIAL OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, LOST PROFITS) ARISING OUT OF THE PRODUCTS OR ANY DELAYS OR ERRORS IN SHIPMENTS. OTHER THAN AS STATED IN THIS AGREEMENT, SELLER MAKES NO REPRESENTATIONS, WARRANTIES OR GUARANTEES, EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCTS, INCLUDING, WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Appears in 1 contract
Sources: Supply Agreement (Mod Pac Corp)