Sales Terms & Conditions

Standard Sales Terms and Conditions Federal Broach & Machine Company

The Quotation and any resulting sale is expressly conditional upon the terms and conditions set forth below. Any additional or different terms or conditions submitted by Buyer shall be deemed objected to by Seller and shall be of no effect nor in any circumstance binding upon Seller unless specifically accepted by Seller in writing. If Buyer objects to any of these terms and conditions, said objection must be brought to the attention of the Seller by the Buyer in a written instrument separate from any purchase order or other printed form of Buyer. Said objection shall be deemed proposals for different terms and conditions and may be accepted only in writing by an authorized representative of the Seller.

Delivery dates are estimates and are based on prompt receipt of all necessary information from and / or performance by Buyer. Seller shall not be responsible for any delay. Unless otherwise specified in writing and accepted by Seller, delivery will be made and title will pass to Buyer F.O.B. point of shipment and the risk of loss of or damage to the equipment, components or tools shall pass to the Buyer at the point of shipment. If Buyer delays delivery of any items, Seller may invoice Buyer for said items and hold them at Buyer’s risk and expense pending instructions from Buyer.


(A) Seller warrants to Buyer that the equipment, components or tools which are manufactured and delivered by Seller pursuant to this Agreement will be free from defects in material and workmanship for a period of one year (or such other length of time specified in the quotation) from the date said equipment, component or tool is put into operation, but in no event later than eighteen (18) months from the date of shipment (six months after the expiration of the warranty period, if the warranty period is longer than one year). If any item of equipment, component or tool shall prove defective in material or workmanship during the above warranty period, Buyer shall within thirty (30) days notify Seller, in writing, of such defect and Seller shall, at its option, adjust, modify, repair or replace said item of equipment, component or tool, or refund the purchase price of said item. Seller shall have the option to have it returned to it, F.O.B. its factory, or to make such adjustment, modification, repair or replacement at the point of installation. However, with respect to any item of equipment, component or tool which has been improperly stored, installed, operated or maintained or which the Buyer has itself modified, replaced, adjusted, or repaired or has permitted modifications, replacements, adjustments, or repairs by third persons, without the consent of the Seller, the Seller shall have no obligation under this warranty provision. Items which are not manufactured but supplied by the Seller shall be covered by the warranty, if any, of the manufacturer or supplier thereof and the Seller shall not be responsible in any way for said terms.

(B) (Applicable only if a performance guaranty is included) Seller warrants that the equipment manufactured and supplied hereunder will, when equipped with Federal Broach and Machine Company specified and supplied components, broaches and / or cutting tools
operate in accordance with those specifications, if any, set forth in the clause or provision of the Agreement specifically identified as “PERFORMANCE GUARANTEE”. Satisfaction of the foregoing warranty will be determined by a test – also specified in such performance guarantee provision. The guarantee of performance specified in the provision on performance guarantee shall expire and shall be deemed satisfied either upon satisfactory completion of the Performance Test or if the Performance Test is not commenced within thirty (30) days after Seller notifies Buyer that the Equipment is ready for testing and is not completed within sixty (60) days thereafter. The sixty (60) day period will only be extended to reflect interruptions due to the fault of Seller. Seller may require preliminary tests before so notifying Buyer. Buyer at its expense shall furnish qualified testing and operating personnel for all tests and all materials for accomplishment of said tests. Seller at its expense shall furnish technical personnel for consultation with respect to all tests.

(C) (Applicable only if a performance guarantee is included) In the event that the Performance Guarantee, as set forth in the provision hereof relative to performance guarantee is not satisfactory upon conduct of the Performance Test as defined above as a sole result of a deficiency in the equipment, Seller shall, at its option, modify, adjust, repair or replace the equipment with the objective of attaining the guarantee and the Seller shall conduct subsequent Performance Tests in the same basis as described in (B) above.

(D)The warranties and guarantees provided in this paragraph 2 and the provision on performance guarantee, if any, shall be applicable only if the equipment and / or components shall be unloaded, stored, installed, operated, tested, maintained and protected from damage and damaging agents by Buyer in accordance with all drawings, operating and maintenance procedures and conditions of service which may at any time be specified by Seller.

(E) The Seller shall have no obligation hereunder until the Buyer has made the equipment available for any adjustment, modification, repair or replacement required. Buyer shall be responsible for and bear the costs of all removal and reinstallation of equipment and materials supplied by others which is necessary to provide Seller free access to any items of Seller’s supply to be modified, repaired, replaced or adjusted by Seller pursuant to 2(A) above and the provision on performance guarantee, if any.
Further, the Seller shall not be responsible for the performance of equipment or parts furnished by others or repairs or work done by others unless the same is specifically ordered by the Seller.


(G)The sole liability of the Seller and the exclusive remedy of the Buyer arising out of the manufacture, sale or furnishing of the equipment hereunder or its use whether arising under contract, tort (including negligence), strict liability or otherwise shall be the modification, adjustment, repair or replacement of the item of equipment, or component thereof, or refund of purchase price of the defective item of equipment, or component thereof, as set forth in paragraph 2 above. In no event shall Seller’s liability exceed the purchase price of the defective item. In applying this limitation, any expenses or damages paid or payable to the Buyer by the Seller under the Patents, Product Warranty or other provisions hereof shall be credited against the Seller’s maximum liability.

Notwithstanding any other provision of the Contract, in no event shall the Seller or its suppliers be liable, whether arising under contract, tort (including negligence), strict liability, or otherwise, for loss of anticipated profits, loss by reason of plant shutdown, non-operation or increased expense of operation, service interruption, cost of purchased or replacement power, claims of customers, cost of money, loss of use of capital or revenue, or for any special, incidental or consequential loss or damage of any nature arising at any time or from any cause whatsoever.

The Seller’s maximum liability arising from any cause whatsoever, including but not limited to breach of contract, tort (including negligence), strict liability or otherwise shall not exceed the Contract Price. In applying this limitation, any damages paid or payable to the Buyer by the Seller as well as any expense incurred by the Seller, under the Patent provision, Product Warranty and Performance Guarantees shall be credited against the Seller’s maximum liability.

The Seller’s Quotation is an offer made by the Seller and is subject to acceptance within the time period stated in the Quotation. However, Seller reserves the right to change or cancel this Quotation at any time prior to receiving written acceptance from Buyer. Prices listed in Seller’s Quotation become fixed upon Seller’s written acknowledgement of receipt of Buyer’s purchase order, but are subject to economic price adjustment (EPA) in accordance with the Economic Price Adjustment Clause, if said clause is included in the quotation.

Terms of payment are as stated in the Quotation. Pro rata payments shall become due as shipments are made. If shipments are deferred at the request of Buyer, payments shall become due on the date Seller is prepared to make shipment.

The prices provided for herein are exclusive of any present or future Federal, State, Municipal or other sales or use tax with respect to the products or services covered hereby, of any other present or future excise tax upon or measured by the gross receipts from this transaction or any allocated portion thereof or by the gross value of the products covered hereby and of any present or future property tax or other similar charge with respect to the products covered hereby. If the Seller is required by applicable law or regulation to pay or collect any such tax or taxes on account of this transaction or the products or services covered hereby, then such amount of tax shall be paid by the Buyer in addition to the prices herein provided.

During performance of work hereunder Seller shall maintain Comprehensive General Liability insurance policies to protect Seller’s legal liability and Workmen’s Compensation protection for Seller’s employees. However, Seller shall not accept any contractual liability for indemnity.

The Seller shall not be liable for any expense, loss or damage resulting from delay in or prevention of its performance of this contract where such delay or prevention is caused by fires, floods, Acts of God, strikes, labor disputes, labor shortages, lack of or inability to obtain materials, supplies or other equipment, riots, thefts, accidents, fuel or energy shortages, transportation delays, acts or failures to act of Government or Buyer, delay in obtaining licenses, major equipment breakdown, or any other cause whatsoever, whether similar or dissimilar to those enumerated above, beyond the reasonable control of the Seller. In the event of any delay or prevention arising by reason of the foregoing, the time for Seller’s performance shall be extended by a period of time equal to the time lost by reason of such delay or prevention.

Seller shall defend, at its own expense, any suit or action against Buyer based on a claim that the equipment, or any component thereof, manufactured and supplied by Seller constitutes an infringement of any United States patent in effect on the date of Seller’s Quotation, if notified promptly in writing and given authority, information and assistance for the defense of same, and Seller shall pay all costs awarded therein against Buyer. In case the equipment, or any component thereof, is held in such suit to constitute an infringement and its use is enjoined, Seller shall at its option and at its own expense: (a) Procure for the buyer the right to continue using said components or equipment; (b) Replace same with non-infringing components or equipment. (c) Modify it so it becomes non-infringing; or (d) Remove said components or equipment and refund the contract price, transportation and installation costs thereof. The foregoing obligation of the Seller applies solely to the components or equipment operating alone as a separate unit. Seller will have no responsibility when these components or equipment combined with other equipment results in infringement by virtue of the combination.

The seller’s obligation set forth in this paragraph 10 shall not apply to any component or equipment, or part thereof, which is based on Buyer’s design. As to such equipment or part, seller assumes no liability whatsoever for patent infringement.

All production rates of the equipment, as furnished by Seller, are estimates only, based on Seller’s understanding of accuracy limits, finish required, machinability of the material, amount of material to be removed, handling facilities provided and locating points as provided in Buyer’s process or part prints furnished to Seller at time of Quotation.

The Buyer may request changes in the specifications of the components or equipment purchased only upon written notice to the Seller and subject to such change in estimated delivery, selling price, and other affected items, plus additional charges for completed parts of the order no longer required due to the changes, as may be determined by the Seller.

The non-discrimination provisions of Executive Order 11246 and all applicable Federal regulations issued thereunder are incorporated herein by reference.

The rights and obligations of Seller and Buyer with respect to Seller’s Quotation and any resulting contract shall be governed by the laws of the State of Michigan.

No failure of Seller to insist on strict compliance of Buyer to any of these Terms and Conditions or to promptly exercise any right accruing from any default of Buyer shall impair Seller’s rights in case Buyer’s default or failure to comply with these Terms and Conditions continues or in case of any subsequent default or failure to comply with these Terms and Conditions by the Buyer.

Neither Seller nor Buyer shall have the right to assign right or interest in Seller’s Quotation or any resulting contract, unless such assignment is in connection with the transfer of all or substantially all of the assignor’s business.

In no event shall the Buyer be entitled at any time to set off against any amount payable by the Buyer in connection with this Contract any amount owed or allegedly owed by the Seller to the Buyer arising from this or any other transaction between the Seller and the Buyer or its predecessors or successors in interest.

The Seller shall not be called upon to make any allowance nor shall the Buyer offset against any amount otherwise payable by the Buyer under this contract for material, labor, repairs, or alterations made or ordered by the Buyer, unless authorized by the Seller in writing.

Purchasing Terms and Conditions

This purchase order is accepted by Seller's effectively communicating to Buyer its acceptance within seven days. Acceptance is conditioned on Seller's agreement that both the terms and conditions stated in the summarized order transmitted by Buyer and the detailed terms described herein are the sole terms and conditions for this order. Any acceptance contained herein is expressly made conditional on Seller's assent to the additional or different terms and conditions contained herein. This purchase order, with any attachments, constitutes the parties entire agreement. No waiver or modification of this agreement's terms shall be valid unless in writing and signed by the parties. Seller may not assign this order without the Buyer's prior written consent.

All charges for packing, hauling, storage and transportation to point of delivery are included in the purchase price unless otherwise specified. Seller will pay all delivery charges in excess of any delivery charges the Buyer has agreed to pay. All shipments must be accompanied by packing slips, which describe the articles, state the purchase order number and show the shipments destination.

The Buyer will not be liable for materials processed in excess of its releases, nor for over shipments in excess of quantities specified and the Buyer may return any over shipments at Seller's expense, which shall include handling, packaging, and transportation both ways.

The seller warrants that all articles and services will conform to drawings, specifications or samples provided by Buyer and will be merchantable, of good material and workmanship, and free from defects. Seller also expressly warrants that any articles, which are of Seller's design or specifications or are Seller's standard product, will be fit and sufficient for the purpose intended. All articles and services are subject to Buyer's inspection. Buyer's issuance of payment after inspection of, or receipt of articles, or services shall not constitute a waiver of any breach of warranty. Defective articles may be returned to the Seller for full credit or for replacement with new articles, at Buyer's option, and at the Seller's risk and expense including all charges for handling, packaging, and transportation both ways. No replacement of defective articles are to be made except as authorized by a replacement order.

The Buyer may at any time make changes in the drawings or specifications or delivery dates as to any articles, materials, or services covered by this purchase order. If such changes affect the cost or time required for performance and if Seller makes claim for adjustment in writing within 30 days of the date it receives notification of change, an equitable adjustment shall be made.

Title to and the right of immediate possession of any patterns, tools, jigs, dies, equipment or material furnished or paid for by the Buyer shall remain in Buyer. While retained by the Seller, such property shall be maintained in good and usable condition at no further cost to the Buyer. Any material furnished by the Seller and paid for by, or charged to the Buyer shall be held on consignments by the Seller and the Seller shall be responsible for any damage or loss thereto. Invoices for any patterns, tools, jigs, dies and equipment will be approved for payment only after production samples are accepted by the Buyer.

If any articles included in this purchase order are made according to designs, specifications or blue prints or by means of any patterns, tools or dies furnished by the Buyer, the Seller agrees that the same articles or parts will not be furnished to any other person and that such patterns, tools or dies will not be used on any articles or parts furnished to any other person without the Buyer's written consent.

The Seller warrants that any materials, supplies or other articles furnished to the Buyer, except those made to Buyers design will not infringe any United States or foreign patents and the Seller, upon due notice and at its own expense, will defend any suit or action which may be instituted against the Buyer or other persons using or selling the Buyer's products for the alleged infringement of any patent involving any of the articles covered by this order and the Seller agrees to pay all costs, damages, and profits recovered in any such suit or action.

The Buyer, without cost to the Buyer, and in addition to any other rights and remedies, reserves the right to cancel this order in whole or in part on account of defects in material, equipment, workmanship or quality, or if materials or any articles are not shipped as specified herein or in release orders issued hereunder, or are not in accordance with blueprints, drawings, specifications or written instructions issued hereunder, or in the event the Seller should make an assignment for the benefit of its creditors, or a receiver should be appointed for the Seller or its property or if proceedings in bankruptcy or for corporate reorganization should be filed by or against the Seller, or upon the Seller's failure to comply with any of the terms and conditions of this purchase order. In addition, the Buyer reserves the right to cancel this order at any time, in whole or in part, in the event governmental laws, regulations and/or administrative acts either directly or indirectly, require such suspension or cancellation or prevent the Buyer from carrying out the manufacture or sale for which the items ordered are being purchased. Buyer reserves the right to terminate this purchase order or any portion thereof if the items or any part thereof are no longer needed by Buyer and, in the event of such termination, Buyer will make settlement with Seller on an equitable basis which will cover Seller's actual cost to date of cancellation but will not include a profit.

Neither party shall be liable for defaults or delays due to acts of God or the public enemy, acts or demands of any government or any governmental agency, strikes, fires, labor difficulties, accidents, or other unforeseeable causes beyond its control and not due to its fault or negligence. Each party shall notify the other party in writing of the cause of such delay within five days after the beginning thereof. During the period of any such excusable delay by Seller, Buyer may, at its sole discretion, obtain the goods and services required herein from another source and Buyer's obligation to purchase same from Seller shall be diminished to the extent of such purchases from other sources. Buyer reserves the right to cancel this order if for any reason goods or services required herein are not delivered or deliverable by the specified delivery date and upon any such cancellation, Buyer shall have no further liability to Seller.

Seller agrees to fully observe and comply with all applicable Federal, State and local laws, rules, regulations and orders, and to defend, indemnify and save Buyer harmless from any act which may be instituted against Buyer or any liability which may be imposed upon Buyer as a result of Seller's failure to comply with such laws, rules, regulations and orders. Seller further agrees as a condition precedent to payment, to attach to or stamp on each invoice issued pursuant to this purchase order, the following statement: "We hereby certify that these goods were produced in compliance with all applicable requirements of Section 6, 7, and 12 of the Fair Labor Standards Act as Amended and of regulations and orders of the United States Department of Labor issued under Section 14 thereof "

12. TAXES:
The price as specified on the front of this order includes all taxes except Federal excise taxes, if applicable and state or local sales or use taxes, or similar taxes which the Seller is required by law to collect from the Buyer. Such taxes, if any, shall be separately stated on Seller's invoice and paid by Buyer unless an exemption is available.

Seller agrees to defend and save harmless Buyer and its subsidiaries, successors and assigns, customers and users of its and their products, against all suits at law or in equity from all damages, claims and demands arising out of the death or injury to any person or damage to property alleged to have resulted from the articles hereby ordered, and, upon the tendering of any such claim to Seller, to defend the same at Seller's expense as to all costs, fees, and damages.

The exercise or waiver by Buyer of any right or remedy provided herein shall be without prejudice to the subsequent exercise by Buyer of any right or remedy provided herein or by law. No local, general or trade custom shall effect any modification or variation of the terms of agreement herein.

In supplying any labor hereunder, Seller warrants that it is an independent contractor and undertakes performance hereof as such with sole responsibility for withholding, collecting and/or the payment of any federal, state and local payroll taxes, unemployment insurance or taxes, social security taxes, worker's compensation insurance or taxes or any other similar taxes or insurance as may be required by law, with respect to its employees in the performance of work hereunder.

Buyer and Buyer's customers shall have the right to visit Seller's premises, and the premises of Seller's subcontractors, for the purpose of verifying the adequacy of manufacturing systems and quality controls. Such verifications shall not relieve Seller of its obligations to establish, maintain and subject to third party review, a quality operating system. Such verification also shall not relieve Seller's responsibility to deliver products acceptable to Buyer.

If this order involves performance of labor or other services by Seller on the property of Buyer, Seller agrees to defend, indemnify and hold Buyer harmless from all claims and demands asserted for loss of life, personal injury, or property damage arising out of or resulting from the performance of such labor or services. Seller agrees to comply with all federal, state and local safety laws, rules and regulations to defend, indemnify and hold Buyer harmless against all liability for Seller's failure to comply. If Seller is required by this contract to perform work on Buyer's property, Seller agrees to follow any additional safety rules and regulations imposed by the Buyer covering Seller’s work and Seller agrees additional safety rules and regulations imposed by the Buyer covering Seller's work and Seller agrees to defend, indemnify and hold Buyer harmless from any liability for any damage or injury in any way caused by Seller's failure to comply with such rules or regulations or the failure of Seller's subcontractors, if any, to comply.

Title to any goods covered by this contract shall not pass to Buyer until delivery to Buyer at the final destination designated, and prior to such delivery Seller retains title to and all risk of loss, or damage (in transit or otherwise) to such goods.

In the event that Seller employs any subcontractor to perform any services or to provide goods required by this agreement Seller shall inform such subcontractor of all obligations Seller has to Buyer hereunder and shall incorporate in its agreements with said subcontractor identical obligations running from the subcontractor in favor of Buyer. Seller shall not employ any subcontractor without first obtaining written permission to do so from Buyer, which permission must, to be effective, conform to the requirements of paragraph 1, regarding modifications of the agreement.

Seller shall provide waivers of liens and affidavits as to all labor expended and materials and parts supplied in connection with this purchase order together with all invoices submitted to Buyer for payment.

This contract shall be governed by and construed in accordance with the laws of the State of Michigan.

In the event that any provision of this contract is found to be illegal or unenforceable, remaining provisions shall remain in full force and effect.

© 2013 Federal Broach & Machine Company

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