GENERAL TERMS AND CONDITIONS
As used in these General Terms and Conditions:
a. “Buyer” means the person or entity that placed the order for Products and/or Services or on whose behalf the order is placed.
b. “F.O.B.” and any other delivery term used in these General Terms and Conditions shall be defined in accordance with the latest version of Incoterms.
c. “Products” means the products identified in Buyer’s Order Form.
d. “Purchase Agreement” means the written agreement between Buyer and Seller for the purchase of Products and/or Services, which shall consist of these General Terms and Conditions and Buyer’s Order Form.
e. “Purchase Price” means the price payable to Seller by Buyer for Products and/or Services.
f. “Seller” means LRAD Corporation, including any division or subsidiary thereof.
g. “Services” means the services identified in Buyer’s Order Form.
2. Ordering Procedure.
Orders by Buyer for Products and/or Services must be issued in written, or if subsequently agreed by the parties, electronic, order form (each an “Order Form”). Each such Order Form shall be in a form approved by Seller and shall specify, (a) with respect to any Products, if applicable, the (i) description and quantity of Products being ordered and (ii) requested location for delivery of Products (the “Delivery Location”), (b) with respect to any Services, if applicable, the description of Services being ordered, (c) the requested delivery date (the “Requested Delivery Date”), (d) other appropriate information as may be required by Seller to complete the Order Form, (e) the location to which the applicable invoice shall be rendered for payment, and (f) any other terms included in Seller’s Order Form, as may be amended by Seller from time to time. Seller reserves the right to make modifications and/or improvements to Products and/or Services before delivery to Buyer provided that the performance of Products and/or Services is not adversely affected and that neither the Purchase Price nor the delivery date is affected.
3. Purchase Agreement; Inconsistent Terms; No Order Form
These General Terms and Conditions govern the terms and conditions of the Purchase Agreement, including, without limitation, any Products and/or Services purchased by Buyer from Seller thereunder. Buyer acknowledges and agrees that any order, upon acceptance by Seller, shall be subject to these General Terms and Conditions. In the event of a conflict between these General Terms and Conditions and an Order Form or in the event no written or formal Order Form is issued by Buyer, the terms of these General Terms and Conditions shall control unless otherwise expressly agreed to in writing by Seller and Buyer. Buyer’s acceptance of Products and/or Services shall be deemed Buyer’s assent to all of the terms of these General Terms and Conditions even if no written or formal Order Form is issued by Buyer.
4. Receipt and Acceptance of Order Form by Seller.
Seller’s corporate office in San Diego, California will have the final authority with respect to the acceptance of any Order Form. If an Order Form is accepted, Seller shall confirm its acceptance of such Order Form to Buyer in writing. No Order Form shall be deemed accepted by Seller until Seller has accepted such Order Form in writing.
5. No Cancellation of Orders; Cancellation Charges.
Once accepted by Seller, Order Forms may not be canceled, reduced, changed or suspended by Buyer without Seller’s written consent and Buyer’s payment of reasonable and proper cancellation charges as determined by Seller. In the event of a cancellation of an Order Form by Buyer, Buyer shall pay cancellation charges in an amount equal to (a) Seller’s costs for all engineering, purchasing, material, and fabrication costs incurred prior to the date of cancellation (the “Costs”), (b) any cancellation charges due to any of Seller’s suppliers, and (c) either (i) twenty-five percent (25%) of the Costs, or (ii) ten percent (10%) of the Purchase Price, whichever is higher, to compensate Seller for its overhead and lost profit.
6. Shipment; Passage of Title
Seller’s shipping dates are approximate and are based on the timing of Seller’s receipt from Buyer of an Order Form which provides complete information and authorizes Seller to proceed with the manufacture and/or delivery of Products and/or Services. Any Products purchased by Buyer will be shipped by Seller to a common carrier (the “Carrier”) located near Seller’s factory using a shipping method and route determined solely by Seller based on product size, quantity, destination, and other considerations. All costs of shipping will be borne by Buyer, including, without limitation, any charges for any special services or special shipping arrangements (such as cartage, air freight, express, parcel post and multiple deliveries on one order). Buyer will install or engage a subcontractor to install Products at the Delivery Location. Seller shall have no obligation for the installation of Products unless otherwise agreed upon in writing by Seller. Title to Products purchased under the Purchase Agreement shall pass from Seller to Buyer upon delivery of Products to the Carrier. Any loss or damage discovered after delivery to the Carrier shall be the sole responsibility of Buyer.
7. Title; Risk of Loss.
Title to, ownership of, and risk of loss or damage to any Products purchased by Buyer shall pass to Buyer, and Buyer shall be responsible for insurance of Products, upon delivery of Products to the carrier. Buyer shall have sole responsibility for processing and collection of any claim of loss against the carrier.
Seller shall provide packaging for all Products, which will be shipped in accordance with recognized industry practice intended to be effective under normal shipping conditions. The cost of any special packaging requirements of Buyer shall be charged to Buyer.
9. Return of Products
Products may not be returned by Buyer without Seller’s prior written permission. Stock Products, when returned, will be credited at the lowest prevailing Purchase Price and subject to a minimum charge of fifteen percent (15%) for handling and restocking. Return shipping charges must be prepaid by Buyer. Nonstandard, special, or custom Products or product parts may not be returned by Buyer without Seller’s prior written consent and upon terms which indemnify Seller fully against any and all loss. In all situations, only Products in resalable condition will be accepted for return.
10. Payment Terms
Buyer shall pay the Purchase Price for Products and/or Services purchased hereunder as specified in and according to the payment schedule detailed in the Order Form. Unless otherwise specified in the Order Form or Seller’s applicable price list, all prices are F.O.B. Seller’s point of shipment and the terms of payment are Buyer shall pay a 30% deposit at the time of the order and the balance of 70% prior to shipment. Export letters of credit may be issued by non-U.S. based resellers in lieu of advance payment. Any requests for credit or non-standard payment terms shall be effective only if approved in writing by an authorized representative of LRAD. Interest at the rate of one and one-half percent (1.5%) per month or the maximum rate allowed by applicable law, whichever is lower, will be charged on past due Buyer accounts commencing after the last day of the first calendar month following the date of such invoice. Seller may suspend, credit, refuse shipment, or cancel any unfilled Order Form without any liability to Buyer should the Seller conclude that the Buyer’s credit is impaired. Seller may require full or partial payment or payment guarantee in advance of shipment whenever, in its opinion, the financial condition of Buyer so warrants. Payment by credit card may be subject to a service charge.
Prices do not include taxes. Buyer shall pay Seller, in addition to the price of any Products and/or Services purchased hereunder, any applicable excise, sales, use or other tax (however designated) imposed upon the sale, production, delivery or use of Products and/or Services ordered to the extent required or not forbidden by law to be collected by Seller from Buyer, whether or not so collected at the time of the sale, unless valid exemption certificates acceptable to the taxing authorities are furnished to Seller before the date of invoice.
12. Limited Warranty
a. Products. Seller warrants that on the date of shipment of any Products purchased hereunder, and for a period of one (1) year from the date of shipment of such Products, such Products shall be free from defects in materials and workmanship. Seller will repair or replace, in its sole discretion, any Product or Product part which fails to comply with the foregoing warranty and is returned to Seller’s factory within the warranty period.
b. The foregoing warranty shall not apply to any Products or Product parts which have been (a) repaired or altered by any party other than Seller, unless such repair or alteration has been specifically approved in writing by Seller, (b) subjected to misuse, negligence, or accident, or (c) used in a manner or in an application other than that recommended by Seller. Seller will not be responsible for any damage to any Product or Product part that occurs during or after shipment or during or after instillation.
Services. Seller warrants that any Services provided by Seller hereunder will be performed with all reasonable skill, care and diligence and in accordance with standard industry practice.
c. Buyer’s Limited Remedy for Seller’s Breach. BUYER’S SOLE AND EXCLUSIVE REMEDY FOR SELLER’S BREACH OF THE WARRANTY DESCRIBED IN THIS SECTION SHALL BE LIMITED TO (A), WITH RESPECT TO PRODUCTS, REPAIR OR REPLACEMENT OF DEFECTIVE PRODUCTS OR PRODUCT PARTS, AND/OR (B), WITH RESPECT TO SERVICES, CORRECTION OF ANY DEFECTS IN SERVICES PROVIDED BY SELLER AND REPORTED TO SELLER WITHIN SIXTY (60) DAYS AFTER COMPLETION OF SUCH SERVICES. FURTHER, SELLER DOES NOT WARRANT AND BUYER ACKNOWLEDGES AND AGREES THAT BUYER IS RESPONSIBLE FOR ENSURING THAT ANY PRODUCTS AND/OR SERVICES PURCHASED FROM SELLER COMPLY WITH APPLICABLE LOCAL, MUNICIPAL, STATE AND FEDERAL LAWS, ORDINANCES, REGULATIONS AND CODES, IF ANY.
13. Buyer’s Indemnification Obligations.
Buyer acknowledges that Buyer is solely responsible for use of the Products and that no aspect of Buyer’s use of the Products is at the direction of Seller. Buyer will indemnify, defend and hold Seller and its officers, agents, directors, and employees (each an “Indemnified Party”) harmless against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs, or expenses of any kind, including, without limitation, reasonable attorneys’ fees, that are awarded against any Indemnified Party, arising out of or related to any third-party claim made in connection with Buyer’s use of the Products.
14. Limitation of Liability; Commencement of Actions.
NOTWITHSTANDING ANYTHING TO THE CONTRARY STATED IN THE PURCHASE AGREEMENT, IN NO EVENT SHALL SELLER OR ITS SUBCONTRACTORS BE LIABLE FOR ANY LOSS, DAMAGE, COST OF REPAIRS, OR INCIDENTAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND, EVEN IF SELLER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF USE OF FACILITIES AND EQUIPMENT OR LOSS OF PROFIT, FOR ANY REASON, WHETHER BASED UPON ANY WARRANTY, OR WHETHER ARISING IN CONTRACT, TORT, NEGLIGENCE OR STRICT LIABILITY OR OTHERWISE ARISING IN CONNECTION WITH THE DESIGN, MANUFACTURE, SALE, USE OR REPAIR OF PRODUCTS AND/OR SERVICES SOLD HEREUNDER, NOR SHALL SELLER OR ITS SUBCONTRACTORS BE LIABLE TO INDEMNIFY BUYER AND/OR ITS SUBCONTRACTORS FOR ANY CLAIMS FOR ANY SUCH CONSEQUENTIAL, INCIDENTAL, INDIRECT, OR PUNITIVE DAMAGES. FURTHER, IN NO EVENT WILL SELLER’S LIABILITY TO BUYER EXCEED THE PURCHASE PRICE FOR THE SPECIFIC PRODUCTS AND/OR SERVICES GIVING RISE TO BUYER’S ACTION. ANY ACTION, REGARDLESS OF FORM, ARISING OUT OF THE PURCHASE AGREEMENT MUST BE COMMENCED BY BUYER WITHIN ONE (1) YEAR AFTER THE CAUSE OF ACTION HAS ACCRUED, OR TWO (2) YEARS FROM THE DATE OF SHIPMENT OR COMPLETION OF SERVICES, WHICHEVER EXPIRES FIRST.
15. Default; Remedies; Termination.
It shall be an event of default (“Default”) if any party shall: (a) fail or refuse to pay when due any monies payable under the terms of the Purchase Agreement and continue such failure or refusal for ten (l0) days after the payment due date; or (b) fail or refuse to comply with any other term, provision or covenant contained in the Purchase Agreement and such failure shall not be cured within thirty (30) days after written notice is provided by the non-defaulting party (to the extent such failure or refusal shall be curable); or (c) (i) make an assignment for the benefit of creditors, (ii) file a petition under any applicable law or statute relating to the bankruptcy or insolvency or be adjudged as bankrupt or insolvent in proceedings filed against it under any such law, or (iii) suffer the appointment of a receiver or trustee for all or substantially all of its assets, except an involuntary appointment removed within sixty (60) days after appointment. Upon the occurrence of a Default, the non-defaulting party shall have, in addition to any other rights or remedies available to the non-defaulting party pursuant to the terms of the Purchase Agreement, the right to terminate the Purchase Agreement upon giving written notice of such termination to the defaulting party, which shall be effective immediately upon delivery to the defaulting party. Upon expiration or termination of the Purchase Agreement for any reason, the parties shall abide by and uphold any rights or obligations accrued or existing under the Purchase Agreement on the date of such expiration or termination. The parties agree to continue to cooperate with each other in good faith to carry out an orderly conclusion of their relationship.
16. Force Majeure.
In the event either party is prevented by Force Majeure from performing any of its obligations under the Purchase Agreement, other than its payment obligations hereunder, such party shall give notice in writing to the other party with full particulars of such Force Majeure as soon as practicable after the occurrence of the Force Majeure event. Upon delivery of such notice, the obligations of the party delivering the notice, so far as they are affected by such Force Majeure, shall be suspended during the period of such Force Majeure and shall be remedied as far as and as soon as practicable by the party giving such notice. As used in the Purchase Agreement, the term “Force Majeure” means acts of God, strikes, lockouts, or other industrial disturbances, acts of public enemies, wars, insurrections, riots, earthquakes, fires, storms, floods, inability with reasonable diligence to obtain materials, delay in transportation by common carrier, and any other causes not within the control of the party claiming a suspension which by the exercise of due diligence such party shall not have been able to avoid or overcome. Seller shall not be responsible for any loss, delay or damage caused by a Force Majeure event.
If for any reason any licenses, authorizations or approvals are denied or revoked, or if there is a change in any such applicable laws, regulations, orders or requirements that would prohibit Seller from fulfilling the Purchase Agreement, or would in the reasonable judgment of Seller otherwise expose Seller to a risk of liability under applicable laws, regulations, orders or requirements, Seller shall be relieved without liability of all obligations under the Purchase Agreement. If either party is delayed or prevented from performance of its obligations by reason of this clause for more than one hundred and eighty (180) consecutive calendar days, either party may terminate the then unperformed portion of the Purchase Agreement by notice in writing given to the other party, without liability provided that Buyer shall be obliged to pay the reasonable cost and expense of any work in progress and to pay for all Products delivered and/or Services performed as at the date of termination. Seller may deliver by installments, and each delivery shall constitute a separate Purchase Agreement. Failure by Seller to deliver any one or more of the installments in accordance with their terms shall not entitle Buyer to terminate the whole Purchase Agreement or treat it as repudiated.
17. Inspection by Buyer.
Buyer shall inspect Products immediately upon the receipt thereof. All claims for shortfalls in quantity or for incorrect delivery or for any alleged defect in Seller’s performance under the Purchase Agreement, capable of discovery upon reasonable inspection, must be fully set forth in writing and received by Seller within five (5) days of Buyer’s receipt of Products. Failure to make any such claim within said period shall constitute a waiver of such claim and an irrevocable acceptance of Products by Buyer.
18. Seller’s Intellectual Property Rights; Confidentiality.
All design and detail drawings, data, material lists, tooling, equipment, procedures, engineering changes, inventions, trade secrets, copyrights , mask works, source code, object code, patents, patent applications, know-how, computer and/or product software and all parts thereof, trademarks and all other information, technical or otherwise, which was developed, made or supplied by or for Seller in the production of Products and/or Services sold hereunder will be and will remain the sole and exclusive property of Seller (or its licensors, if any). Buyer agrees not to reverse engineer any Products and/or Services purchased hereunder.
Buyer agrees to treat all information, including, without limitation, all proprietary information, provided by Seller hereunder as confidential (“Confidential Information”) and shall not make use of Confidential Information for purposes other than those contemplated by the Purchase Agreement, and shall not make Confidential Information available to third parties other than as required to carry out the installation and use of Products and/or Services.
19. Export Regulations.
Buyer agrees to comply fully with all laws and regulations concerning the export of any Products from the United States.
20. Entirety or Purchase Agreement; Amendment.
The Purchase Agreement, including these General Terms and Conditions and Buyer’s Order Form, embody the entire agreement between the parties regarding the subject matter hereof and supersedes any other agreements and arrangements, whether in written oral form, regarding the subject matter hereof. Except as otherwise provided in the Purchase Agreement, the Purchase Agreement may not be amended, extended or supplemented in any manner whatsoever except by the express written agreement executed by duly authorized corporate officers of both parties.
Any notice, agreement, or other communication required to be given under the Purchase Agreement shall be in writing and either personally delivered, delivered by certified U.S. mail (return receipt requested), postage prepaid, or delivered by overnight delivery by a nationally recognized courier, addressed to the parties at their addresses noted on page one of the Purchase Agreement or to such other addresses as maybe furnished in writing by either party to the other. Each notice or communication shall be deemed to have been received three (3) business days after the same was deposited in certified mail, or, if delivered in person via an internationally recognized overnight delivery carrier, as of the date so delivered. Notwithstanding the foregoing, Order Forms and other ordinary course of business communications may be sent by email or mail to the address identified by the parties from time to time, or by first class mail, postage prepaid.
In the event that one or more of the provisions of the Purchase Agreement is declared or held invalid, illegal or unenforceable by a court of competent jurisdiction, such provision(s) shall be interpreted as modified so as to be enforceable to the maximum extent permitted by law, and all other provisions hereof shall be given effect separately therefrom and shall not be affected thereby.
No waiver by either party of any provision of the Purchase Agreement shall be deemed or shall constitute a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver.
Each party represents and warrants that (a) it is duly organized, validly existing and in good standing under the laws of the state of its organization, and has full power and authority to enter into and perform its obligations under the Purchase Agreement, (b) it agrees to be bound by the Purchase Agreement, and (c) the person executing the Purchase Agreement on behalf of such party has been properly authorized and empowered to enter into the Purchase Agreement.
25. Headings Not Controlling.
The headings used in the Purchase Agreement are for reference purposes only and shall not be deemed part of the Purchase Agreement.
26. Successors and Assigns.
The Purchase Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. The Purchase Agreement is not assignable by either party without the prior written consent of the other party hereto, which shall not be unreasonably withheld, except that Seller may assign the Purchase Agreement to any person or entity (a) that is a parent, subsidiary or affiliate of Seller, (b) that acquires a controlling interest in the stock of Seller, (c) with which Seller merges or consolidates, or (d) to which Seller transfers all or substantially all of its assets.
27. Attorney Consultation.
Each party represents that it has had an opportunity to consult with independent legal counsel prior to signing the Purchase Agreement.
28. Counterparts; Electronic Signatures.
The Purchase Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. Electronic signature pages shall be deemed as sufficient evidence of a party’s consent and agreement to the terms of the Purchase Agreement.
29. Choice of Law; Arbitration.
The Purchase Agreement shall be governed by the laws of the state of California. Buyer agrees that all disputes and/or causes of action under the Purchase Agreement shall be resolved by binding arbitration by a single arbitrator from the San Diego office of the American Arbitration Association (“AAA”) in accordance with the AAA’s rules of Arbitration.
30. U.N. Convention.
Pursuant to Article 6 of the United Nations Convention on Contracts for the International Sale of Goods (the “UN Convention”), the parties agree that the UN Convention shall not apply to the Purchase Agreement.