Terms and Conditions

Terms and Conditions of PURCHASE

TERMS AND CONDITIONS OF PURCHASE

These Terms and Conditions of Purchase (the Terms) are incorporated into every Purchase Order through which YGM Steel Fabrication LLC, or their affiliated entities (collectively “YGM”) purchases Goods from supplier (Seller). Seller is the entity designated as such on the Purchase Order. The Goods are the products, parts, components, Tooling, or services, the delivery of which is the subject of the Purchase Order.

Application
1. The Purchase Order governs Seller’s deliveries of the Goods to YGM. YGM objects to any other terms or conditions, including any terms of Seller.
2. The Purchase Order is the entire and final agreement between YGM and Seller and supersedes any prior or contemporaneous negotiations or agreements regarding the Goods.
3. The Purchase Order may only be amended in a writing signed by YGM.
Offer and Acceptance
1. A Purchase Order is YGM’s offer to Seller. YGM may revoke any Purchase Order prior to its acceptance under Section 2.2, at any time without incurring any liability to Seller.
2. Seller accepts the Purchase Order by agreeing to it in writing or taking any step in furtherance of performing its obligations under the Purchase Order, including engineering, design, development, manufacturing, procuring raw materials or equipment, or beginning to manufacture the Goods.
Fixed-Quantity and Requirements Contracts
1. Fixed-Quantity Contracts: If the Purchase Order states a specific quantity, then Seller must supply YGM with the quantity specified, and YGM must purchase from Seller that quantity of Goods at the price indicated. Seller must deliver the Goods to the locations and at the times in the Purchase Order or in any Release issued by YGM.
2. 100% Requirements Contracts: If the Purchase Order does not state a quantity, or if the Purchase Order states the quantity as “0,” “REQ,” “100% REQ,” “100%,” “AS REL,” the Purchase Order is an exclusive 100% requirements contract. YGM must order from Seller all of the Goods that YGM needs during the Term of the Purchase Order (as defined below), Seller must deliver all of the Goods ordered, and YGM must pay for those Goods. Seller will deliver the Goods in the quantities, at the times, and to the locations in any Release issued by YGM. If YGM’s needs for the Goods are determined by the needs of its customer, YGM will determine its needs, including quantities and delivery dates, and communicate those to Seller through Releases.
Firm Delivery Dates and Quantities / Capacity
1. The Purchase Order or Release may specify a firm quantity of Goods or a firm quantity of raw materials or components, as well as a firm delivery date. All firm quantities and delivery dates are binding on both YGM and Seller.
2. Unless the Purchase Order states otherwise, the only firm quantities on a Release are for the first four weeks (for finished goods) and the following four weeks (for raw materials only).
3. All quantities and delivery dates in the Purchase Order, any Release, or any other document are estimates, are for planning purposes only, and YGM has no obligation to Seller.
4. If Seller delivers Goods in advance of the firm delivery schedule, YGM may either: (A) return the Goods at Seller’s expense; or (B) withhold payment for the Goods until the scheduled delivery date.
5. Delivery of the goods will be set by Incoterms stated on the Purchase Order. If the Purchase Order is silent as to delivery, it will be FOB destination with freight prepaid.
6. Risk of loss and title to Goods passes to YGM upon delivery. Passage of the risk of loss and title shall not constitute YGM’s acceptance of the Goods.
7. If Seller will be unable to meet a delivery date, Seller must, at YGM’s request, surrender all tools and devices which have been paid for in full or in part by YGM that are required to produce the Goods.
8. Seller must maintain sufficient capacity to satisfy any quantities, including estimated quantities, in the Purchase Order or any Release.
Price and Payment
1. The price in the Purchase Order is a fixed price and represents the total price for the Goods. All prices are in U.S. dollars and include all storage, handling, packing, freight, insurance, taxes, duties, and any other charge of any nature. Seller represents and warrants that the prices charged to YGM are no less favorable than those Seller extends to its customers for like goods. YGM’s liability is limited to the price for the Goods shown on the Purchase Order.
2. Seller will invoice upon delivery of the Goods. For shipments that cross national borders (exports), the required documentation must be provided to parties identified by YGM no later than the time of shipment.
3. Payment terms are stated on the face of the Purchase Order. If the Purchase Order is silent, the default payment term is net 60.
4. YGM is not obligated to pay for defective Goods.
5. Seller may not assign its claims against YGM to any other party.
6. If YGM’s customer requires YGM to reduce its price during the term of the Purchase Order, then Seller must also reduce its price to YGM in a proportionate amount.
Tariffs
1. For the Goods which YGM is the importer of record, YGM will pay the applicable tariffs, subject to this Section 6.1. If, after acceptance of the Purchase Order, a tariff rate change will cause YGM to incur a Total Piece Price (including the Price stated on the Purchase Order and the new tariff) in excess of 5% above the Baseline Total Price (calculated by the Price on the Purchase Order and the tariff at the time the Purchase Order is accepted), YGM reserves the right to do any or all of the following: (1) terminate in whole or in part the Purchase Order by providing written notice to Seller; or (2) provide written notice to Seller of its request for an equitable reduction to the Price, to include a reduced Price for that portion of the Total Piece Price that exceeds 5% over the Baseline Total Price.
Duration
1. The duration of the Purchase Order is the term as stated on its face, or if no term is stated, the life of each program into which the Goods are ultimately incorporated, including model refreshes as determined by YGM’s customer, and including any period during which YGM is obligated to provide service or replacement parts incorporating the Goods to YGM’s customer (the Term). Nothing in this section affects YGM’s right to terminate the Purchase Order.
2. Seller may not terminate the Purchase Order before the end of the Term.
3. Upon the expiration or termination of any Purchase Order, Seller will cooperate with YGM and provide all reasonably requested support and information required to facilitate YGM’s sourcing of the Goods to a replacement Seller.
Packaging, Shipping, and Proof of Origin
1. All Goods must be properly packed, labeled, and shipped to ensure the lowest transportation costs, using customary care and diligence. Seller will be liable for any damage due to faulty packaging.
2. Seller must immediately obtain all documents and other information required under customs provisions or any other applicable state provisions, including drawback documents, proofs of origin, and other information relating to the origin of the Goods and the materials they contain under commercial law or provisions governing preferential trade.
3. If YGM determines a carrier or a means of transport, Seller must ship the Goods with that carrier and means of transport.
Subcontracting
1. Seller may not subcontract any of its obligations under a Purchase Order.
2. If Seller subcontracts any of its obligations under the Purchase Order, Seller remains directly responsible to YGM for the performance of those obligations.
Force Majeure
1. Any delay or failure of either party to perform its obligations under the Purchase Order will be excused to the extent that Seller is unable to produce, sell, or deliver, or YGM is unable to accept delivery, buy, or use, the Goods, directly as the result fires, floods, windstorms, explosions, riots, natural disasters, wars, and sabotage (excluding all labor issues) (collectively, a Force Majeure Event). Written notice of the Force Majeure Event (including the anticipated duration of the delay) must be given by the affected party to the other party as soon as possible (but in no event more than 10 days after the Force Majeure Event occurs).
2. During any Force Majeure Event affecting Seller’s performance, YGM may, at its option, purchase the Goods from other sources and reduce its order in whole or in part from Seller, without liability.
3. Seller will use all diligent efforts to ensure that the effects of any Force Majeure Event are minimized and, as promptly as possible, resume full performance under the Purchase Order. If requested by YGM in writing, Seller will, within five days after YGM’s request, provide adequate assurances that the delay in Seller’s performance resulting from the event will not exceed 30 days. If the delay lasts more than 30 days or Seller does not provide those adequate assurances, YGM may immediately terminate the Purchase Order without liability to Seller.
Quality and Compliance with Specification
1. All Goods delivered under the Purchase Order must strictly comply with the Specifications. The Specifications include drawings, written specifications, and samples or prototypes approved or provided by YGM.
2. Any change of the Goods or of materials, tools, or production processes (including the location of manufacture) requires the prior written consent of YGM.
3. YGM reserves the right to make, or require Seller to make, modifications to the Goods, the Specification, or the production processes at any time. Seller will, within ten days of the date it is notified of a modification by YGM, demonstrate the effects of the modification on the price and delivery date through a cost breakdown with supporting documentation. If the modification requires any deviation in price or delivery date, YGM and Seller will agree on an appropriate adjustment in writing.
4. Seller must observe the standards, statutes, and other rules and regulations relevant to the Goods of the countries in which the products containing the Goods are marketed and are manufactured. Seller will provide all required inspection documents and certificates.
5. Seller will control the quality of the Goods in regular intervals and will present the agreed inspection documents.
6. To the extent that any public authority competent for safety, emissions rules, or the like requests access to the production process and the inspection documents of YGM, Seller will, on YGM’s request, grant the authorities the same rights at Seller’s premises and provide all reasonable support.
Notice of Defects
1. YGM is not required to perform incoming inspections of any Goods. Payment by YGM is not acceptance of nonconforming Goods.
2. Any inspection by YGM or its customer is not acceptance of the Goods or a waiver of strict performance and does not relieve Seller of any liability or warranty for the Goods.
Warranties and Warranty Claims
1. Seller warrants that:
  1. The Goods conform to all applicable Specifications and other requirements for the Goods;
  2. The Goods are free from any defect in design, workmanship, production, and material;
  3. The Goods are of merchantable quality;
  4. It is aware of the particular purpose for which the Goods will be used, and that all Goods are fit for that particular purpose; and
  5. It conveys good and clear title to all Goods free and clear of all liens and encumbrances.
2. Defective Goods are Goods that fail to conform with any warranty in the Purchase Order, including those in Section 13.1.
3. If Seller delivers Defective Goods, YGM, in its sole discretion, may: (A) request that Seller, at Seller’s own risk and expense, rework the Defective Goods or replace the Defective Goods with Goods that conform to the Purchase Order; or (B) if the Defective Goods are already in the production process of YGM, its customer, or its ultimate OEM end customer, at Seller’s cost and expense, have the Defective Goods replaced or reworked by YGM, its customer, or a third party. If the Defective Goods have already been installed in a product and delivered to YGM’s customer and YGM does not receive the Defective Goods from its customer for inspection, Seller will accept the determination of YGM’s customer as a reasonable determination that the Goods are Defective Goods.
4. Seller is liable for and must reimburse YGM for all direct and indirect costs incurred by YGM or its customer in connection with the delivery of a Defective Good (including costs for transport, examination, handling, sorting, dismantling, material, and work).
5. The warranty period for delivered Goods begins upon delivery of the Goods and continues through the longest of: (A) 48 months after delivery; (B) the warranty period provided by applicable law; or (C) the warranty period offered by YGM’s customer to end-users for the Goods installed on or as part of a product or vehicle.
6. Nothing in this section waives or alters YGM’s rights with respect to any claims for damages or costs according to any applicable statutes or laws, including any claims under product-liability laws, or any indemnity claims by YGM against Seller.
Recall and Other Field Actions
1. If YGM, its customer, or the manufacturer of the products into which the Goods, or products, components, or systems containing the Goods, have been assembled, performs a recall, any other field- or garage-action, or a customer-service campaign, either upon its own initiative or upon the decision of any public authority (a Recall), Seller will be liable to YGM for all damages in connection with the Recall to the extent that the Recall results from the delivery of Defective Goods or from any other breach of the Purchase Order by Seller.
Liability
1. Seller’s liability for any breach of the Purchase Order or the Terms includes YGM’s direct, indirect, incidental, and consequential damages, and any other damages or other remedies available under law or equity. Seller will reimburse YGM for any attorney’s fees, other professional fees, and court costs incurred by YGM to enforce its rights under the Purchase Order.
2. Seller must pay YGM for any loss caused by Seller’s breach of the Purchase Order, or that arises from or relates to warranty, defect, product-recall, or product-liability claims asserted by any party against YGM, or that arises from or relates to any injuries to persons, including death, or damage to property. A loss includes any amount YGM is legally responsible for or pays in any form, including any judgment, settlement, fine, penalty, damages, cost, or expense, including attorney’s or other professional fees.
3. Seller, at YGM’s option and at Seller’s expense, will defend claims made against YGM arising out of the Goods. In the alternative, YGM may elect to defend the claim itself and Seller must reimburse YGM all costs and expenses of defense, including attorney’s and other professional fees.
4. If any third party asserts any claim against YGM arising out of the delivery or performance of Seller, Seller will indemnify YGM to the extent Seller would be directly liable to the third party.
5. YGM is not liable to Seller for anticipated profits or for special, incidental, or consequential damages under any circumstances. YGM’s liability for a claim of any kind or for any loss arising out of or in connection with or resulting from each Purchase Order, the Goods, or any other agreement between YGM and Seller is limited to any amounts due Seller through a termination claim hereunder.
6. No action by YGM, including the payment for Goods or acceptance of a later delivery, is a waiver of any of its rights under the Purchase Order, including its rights to pursue any claim against Seller.
Insurance
1. Seller must maintain comprehensive general liability insurance with extended product liability with coverage for assembly and disassembly costs and recall insurance with an appropriate limit of indemnity, at least $2,000,000 per occurrence. Seller must provide YGM with evidence of the insurance upon request.
2. Seller’s liability is not limited to its insurance coverage.
Proprietary Rights and Rights of Use
1. Seller warrants that the Goods do not infringe any domestic or foreign patents, utility models, copyrights, or other intellectual-property rights (Proprietary Rights) of any third party. Seller will indemnify YGM from and against all claims, damage, or demands arising out of the actual or alleged infringement of Proprietary Rights by use or sale of the Goods.
2. Where the use of the Goods by YGM requires Proprietary Rights of Seller, Seller grants YGM the free of charge world-wide irrevocable right to use, sell, repair, or copy the Goods.
3. If a Purchase Order contains development work paid for by YGM, either by means of a unique payment or through the price of the parts, any and all results of that development work, including any Proprietary Rights, are the exclusive property of YGM.
Tooling and Other Provided Property
1. All tools, parts, templates, devices, jigs, gauges, fixtures, other appurtenances, and related drawings and forms (collectively, “Tooling”), equipment or material that is either provided to Seller by YGM or its customer; is paid for or is to be paid for directly or through amortization by YGM; or is Tooling identified on the face of any Purchase Order; as well as any and all replacements, additions, attachments, accessories, and maintenance (collectively “Provided Property”), are the property of YGM, and are held by Seller on a bailment basis only.
2. Seller may only use the Provided Property for production of Goods under a Purchase Order.
3. Seller must maintain all Provided Property in good condition and replace it if necessary, all at Seller’s cost. Seller bears the risk of loss of and damage to the Provided Property while the Provided Property is in its possession or control. Seller must insure the Provided Property in the event of loss to an amount equal to the replacement cost that would have to be paid to YGM or its customer, all at Seller’s cost. Seller must hold YGM harmless from and against any claim, liability, costs, or damages arising from or related to the assembly, use, safekeeping, or repair of the Provided Property.
4. Seller grants YGM the irrevocable option to acquire possession of and title to any tools that are necessary for, and specific to, the production of the Goods (Necessary Tools). To exercise this option, YGM must pay to Seller the Necessary Tools’ net book value, less any amounts already paid to Seller by YGM or amortized via the purchase price of the Goods. Seller warrants to YGM that it is not using the Necessary Tools for production of goods to any customer other than YGM.
Delivery of Service and Spare Parts
1. For Goods that will be incorporated into products for vehicles, Seller will supply YGM with 100% of its requirements for service and spare parts for 15 years after the end of production. During this 15-year period, the price will be the price on the most recent production Purchase Order.
Confidentiality
1. The parties will treat as trade secrets any and all commercial and technical details they learn of through the business relationship created by the Purchase Order. Drawings, models, templates, samples, or similar items may not be made available to unauthorized third parties. The parties may not reproduce any of these items unless permitted within the scope of operational requirements and within the scope of copyright, patent, trademark, or trade-secret law.
Default and Remedies for Default
1. Default means:
  1. Seller’s repudiation, breach, or threatened breach of any of the terms of any Purchase Order or other contract between YGM and Seller, including any of Seller’s warranties or delivery obligations (e.g., YGM may terminate any or all of its Purchase Orders with Seller if Seller breaches any one of its Purchase Orders);
  2. Seller’s failure to provide adequate assurance of Seller’s ability to perform timely any of Seller’s obligations under a Purchase Order or Release; or
  3. Seller’s failure, after being provided with the notice, to remain competitive with respect to price, quality, delivery, technology, payment terms, or customer support.
2. In the event of a Default, YGM may, in its sole discretion:
  1. waive all or any part of the Default;
  2. agree in writing to any modification of the Purchase Order:
  3. terminate the Purchase Order for cause in whole or in part;
  4. purchase goods in substitution for those to be supplied by Seller under the Purchase Order and charge Seller for any excess costs resulting from that purchase; and
  5. exercise any other legal or equitable rights or remedies it has.
Seller May Not Stop Deliveries
1. Under no circumstances may Seller cease deliveries that are required by the Purchase Order. Seller acknowledges that its failure to deliver as required by the Purchase Order will cause irreparable harm, and that if it does stop deliveries, preliminary and permanent injunctive relief should be granted in YGM’s favor, compelling Seller to resume and continue deliveries as required by the Purchase Order.
Termination
1. Termination for convenience: YGM may terminate all or any part of a Purchase Order at any time and for any business reason by giving 30 days’ written notice to Seller.
2. Termination due to customer termination: If YGM’s customer terminates all or any part of its order with YGM for any reason, YGM may terminate all or any part of a Purchase Order by giving written notice to Seller. A notice period of 30 days or of any other length is not required—the termination may be immediate.
3. Termination for cause: YGM may immediately terminate all or any part of a Purchase Order without any liability to Seller in the event of any Default by Seller.
4. Seller may not terminate the Purchase Order.
Termination Claims and Obligations
1. Once it receives notice of termination, Seller, unless otherwise directed in writing by YGM, must (A) immediately terminate all work under the Purchase Order or Release; (B) transfer title and deliver to YGM the usable and merchantable finished Goods, work in process, and raw materials and components that Seller produced or acquired in accordance with firm Release amounts under the Purchase Order and that Seller cannot use in producing Goods for itself or for others; (C) take actions reasonably necessary to protect all property in Seller’s possession in which YGM has an interest; and (D) at YGM’s request, cooperate with YGM in resourcing the Goods covered by the Purchase Order.
2. If the termination is for convenience, YGM will pay to Seller the following amounts without duplication: (A) the Purchase Order price for all finished and completed Goods; (B) Seller’s reasonable actual cost of the usable and merchantable work in process and raw materials and components transferred to YGM; and (C) Seller’s reasonable actual costs of carrying out its obligations to YGM under this section.
3. If the termination is for cause, Seller is not entitled to any further payments by YGM.
4. YGM is not liable for and is not required to make payments to Seller, directly or on account of claims by Seller’s subcontractors, for any alleged losses or costs, including loss of anticipated profit, unabsorbed overhead, interest on claims, product-development and engineering costs, facilities and equipment rearrangement costs or rental, unamortized depreciation costs, obsolescence costs, or general and administrative burden charges resulting from termination of the Purchase Order or otherwise.
5. Within 30 days after the effective date of termination for convenience, Seller must furnish to YGM its termination claim, together with all supporting data.
Compliance with Laws and Certifications
1. Seller will comply with all applicable laws, rules, regulations, orders, conventions, or standards enacted by the United States of America and/or the United Arab Emirates that regulate the manufacture, labeling, transportation, licensing, approval, or certification of products or services, including those relating to environmental matters, data protection and privacy, wages, hours and conditions of employment, subcontractor selection, discrimination, occupational health and safety, and motor vehicle safety, and each Purchase Order incorporates by reference all the clauses required by the provisions of those laws, orders, rules, regulations, and ordinances. Among other things, Seller will comply with the Occupational Safety & Health Act, 29 U.S.C. §§ 651 et seq., the Toxic Substance Control Act, 15 U.S.C. §§ 2601 et seq., and any state statutes implementing these or similar federal laws that apply to any place of Seller’s performance.
2. For Goods imported into the United States and/or the United Arab Emirates, Seller will: (A) be certified for deliveries into the United States by the U.S. Customs & Border Protection and/or certified for deliveries into the United Arab Emirates by Dubai Customs, in compliance with the Customs-Trade Partnership Against Terrorism (C-TPAT), and maintain that certification for the Term; and (B) accept, implement and comply with all applicable Trade Security Programs, including recommendations or requirements of the C-TPAT initiative (http://www.cbp.gov). Seller will indemnify and hold YGM harmless from and against any liability, claims, fines, demands, or expenses (including attorney’s or other professional fees) arising from or relating to Seller’s failure to accept, implement, or comply with C-TPAT.
3. All purchased materials used to manufacture the Goods must satisfy current governmental and safety constraints on restricted, toxic, and hazardous materials, as well as environmental, electrical, and electromagnetic considerations applicable to the country of manufacture and sale. Prior to shipment, Seller will furnish applicable Material Safety Data Sheets as well as information on the safe use and hazards associated with use of the Goods. Seller must be in compliance with ISO14001, TS16949 and ELV or their successors, as amended from time to time.
4. Seller will indemnify and hold YGM from and against any liability claims, demands, fines, or expenses (including, without limitation, attorney’s or other professional fees) arising out of or in connection with Seller’s failure to comply with the provisions of Section 24.
General Provisions
1. If any provisions of the Purchase Order, any Release, these Terms, or any other related or incorporated documents is found invalid, the validity of the remaining documents and Terms will be unaffected. The parties will replace the invalid provision with a provision that comes as closely as possible in terms of economic results to the invalid provision.
2. In the event of a conflict between the language in a Purchase Order, these Terms, or any other documents incorporated into the Purchase Order or Terms, the documents control in the following order of supremacy: (1) the Purchase Order; (2) the Terms; and (3) any documents incorporated into the Purchase Order or Terms.
3. Governing Law: The Purchase Order, including these incorporated Terms, is governed by the laws of the state of Washington. The provisions of the United Nations Convention on Contracts for the International Sale of Goods do not apply. Any conflict-of-laws or choice-of-law provisions or principles that would require application of the laws of a jurisdiction other than those of the state of Washington are excluded.
4. Jurisdiction: Any action arising under or relating to a Purchase Order or the Goods is subject to the exclusive jurisdiction of the state and federal courts sitting in Michigan or Washington, without giving effect to any principles relating to conflicts or choice of law. The parties consent to the jurisdiction of the state and federal courts in Michigan and Washington. YGM reserves the right to bring a lawsuit in any court with jurisdiction over Seller if necessary.
5. Exclusive Venues: The exclusive venues in which any dispute arising under or relating to the Purchase Order or supply of the Goods may be litigated are the state and federal courts in Michigan and Washington.

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