Danfoss General Terms and Conditions of Purchase These General Terms and Conditions of Purchase (“Terms”) apply to all deliveries of products and services from a party (“Supplier”) to Danfoss A/S or its Affiliates (each of which is referred to as “Danfoss”). In these Terms “Affiliate” shall mean an entity directly or indirectly controlled by Danfoss A/S whether by shares or voting rights. No terms and conditions other than the Terms shall be binding upon Danfoss and Supplier unless agreed in writing by both Danfoss and Supplier. All terms and conditions contained in any communication which are different from or in addition to the Terms shall not be binding on Danfoss unless otherwise expressly agreed in writing by both Danfoss and Supplier. 1. Ordering and Order Confirmation Purchase orders will be issued by Danfoss in writing, by fax or electronically and will be binding at Supplier’s acceptance in writing, by fax or electronically. Any modifications of or comments to the purchase order by Supplier are binding only, if accepted by Danfoss in writing. If Supplier does not reject a Danfoss purchase order within three (3) working days after receipt or if Supplier commences the performance of any part of a Danfoss purchase order the purchase order will be deemed unconditionally accepted by Supplier. A purchase order issued by Danfoss and accepted by Supplier is hereinafter referred to as an “Order”. Products and/or services covered by an Order are hereinafter referred to as “Products”. 2. Terms of Delivery Delivery of Products shall be made pursuant to the Order. If the delivery terms are not specified in the Order deliveries shall be made DDP at the address designated by the ordering Danfoss entity. DDP shall be interpreted in accordance with the version of Incoterms valid on the time of Supplier’s acceptance of the Order. Danfoss is not obligated to accept early deliveries, partial deliveries or excess deliveries. 3. Delay Supplier shall use its best efforts to avoid delay in the delivery of Products. If Supplier has reason to believe that it will not be able to deliver Products at the agreed time of delivery, Supplier shall immediately notify Danfoss thereof in writing in order to agree the right priorities. For the avoidance of doubt it is outlined that such notice shall not relieve Supplier of its responsibility and liability to deliver on time. If Supplier does not deliver the Products on the agreed time of delivery Danfoss is entitled to liquidated damages as from the agreed delivery date, unless the delay is caused by Danfoss. The liquidated damages amount to two (2) percent of the total order sum per week or fraction of a week of the delay. The liquidated damages cannot amount to more than ten (10) percent of the total order sum. The liquidated damages shall fall due for payment at Danfoss’ written demand. Part deliveries shall not exempt Supplier from liability pursuant to this provision. Any delay beyond fourteen (14) days from the agreed delivery date is considered a material delay which entitles Danfoss to terminate the Order as well as any Order which is related to the delayed Order. Supplier’s payment of liquidated damages due to delay does not exclude the right of Danfoss to claim compensation for any direct loss in excess of the liquidated damages amount. This obligation on Supplier to compensate Danfoss’ loss shall exist irrespective of whether Danfoss chooses to terminate the Order or not. In the event of delay of products Danfoss may request Supplier to deliver the products by the fastest means of transport. If Danfoss’ request is reasonable based on the potential implication on Danfoss, Supplier shall meet Danfoss’ request. Any additional delivery charges in excess of those that would apply for the usual means of delivery shall be borne by Supplier. 4. Prices and Payment Unless expressly stated to the contrary, prices stated in an Order are (i) fixed and firm, (ii) exclusive of VAT (if any), but including all other costs, including, but not limited to taxes, duties, levies, charges, travel costs, expenses, incidentals etc. and (iii) inclusive of the costs of packaging. Payment terms are current month plus ninety (90) days from the date of undisputed invoice (+/- four (4) working days) . Where products are invoiced, invoicing may take place upon completion of delivery. Where services are invoiced, invoicing may take place only upon finalization and acceptance of services, or on a monthly basis if so specified in the Order. All invoices shall be in English and state Danfoss’ order number and the agreed terms of payment. Invoices without this information are not payable and will be returned to Supplier for correction and reissuance. 5. Confidentiality and Restricted Use Any non-public information, including, but not limited to, drawings, descriptions, specifications and any other documents which Danfoss has made or may make available to the Supplier (“Confidential Information”) shall remain the property of Danfoss and shall be treated as confidential by Supplier and its representatives and must not, without the written consent of Danfoss, be copied, reproduced, or transferred to third parties other than Affiliates or be used for other purposes than those intended when the Confidential Information was made available. Confidential Information shall be returned upon Danfoss’ request. 6. Warranties Concerning Services If Supplier provides services to Danfoss Supplier warrants that: (a) Supplier has the requisite expertise, knowledge and skills necessary to perform the services with a high standard of quality and in accordance with the terms and conditions of any Order; (b) the services will be performed in a workmanlike and professional manner in accordance with high industry standards; (c) Supplier has the right to enter into and fully perform any Order and Supplier’s performance of the services will not violate any agreement or obligation between Supplier and a third party; and (e) all services shall be in conformance with all applicable laws, rules and regulations of the country where the services are performed. 7. Warranty For a period of twenty-four (24) months from the date of delivery Supplier warrants that Products delivered (i) are designed and manufactured in a professional and workmanlike manner; (ii) are fit for any normal or agreed purpose; (iii) are free from defects in design, materials and workmanship; (iv) comply with applicable law; and (v) comply with agreed specifications and requirements. Supplier shall without undue delay - at Danfoss’ discretion – credit, repair or replace defective Products at Supplier’s cost and risk. Supplier shall reimburse Danfoss any documented, direct loss incurred as a result of defective Products including, but not limited to, inspection costs, dismantling and installation cost, freight, import and export duties, charges and taxes. Defective Products that have been replaced at Supplier’s cost shall be the property of Supplier and shall be returned to Supplier at Supplier’s risk and cost if Supplier requests so within thirty (30) days from Supplier’s receipt of Danfoss’ complaint. 8. Serial Failures in Products If the same type of defect occurs, within the warranty period of the Products and in minimum three (3) % of Products, however always at least ten (10) units, manufactured to the same design, which have been delivered by Supplier to Danfoss during any three (3) months’ period, such defect is considered a “Serial Failure”. All such Products delivered to Danfoss within the three months’ period are referred to as “Serial Failure Products”. Supplier shall without undue delay - at Danfoss’ discretion - repair or replace Serial Failure Products at Supplier’s cost and risk. Supplier shall compensate Danfoss any documented loss incurred as a result of a Serial Failure including, but not limited to, project management costs, analysis costs, advertising costs, inspection costs, recall costs, freight, import and export duties, charges and taxes. Serial Failure Products that have been credited or replaced at Supplier’s cost shall be the property of Supplier and shall be returned to Supplier at Supplier’s risk and cost if Supplier requests so within thirty (30) days from Supplier’s receipt of Danfoss’ complaint. 9. Product Liability Supplier shall defend, indemnify and hold Danfoss harmless from all claims and losses arising from personal injury or damage to property, provided that these are caused by defects in the Products. Supplier shall furthermore defend, indemnify and hold Danfoss harmless for losses and expenses incurred by Danfoss in the course of averting risk for death, personal injury or damage to property caused by Products, e. g. issuing warnings or initiating preventive recall actions. Supplier shall assume the defense of claims or losses with counsel approved by Danfoss, such approval not to be unreasonably withheld or delayed. Danfoss may, at its option and expense, be represented by counsel of its choice in any action or proceeding with respect to any such claims or loss. Supplier shall not settle any claim or loss without Danfoss’ written consent, which shall not be unreasonably withheld or delayed. If a product liability claim relating to Products is lodged by a third party against one of the Parties, the latter Party shall without undue delay inform the other Party thereof in writing. Supplier is obliged to let itself be summoned to the court or arbitrational tribunal examining claims for damages lodged against Danfoss on the basis of damage allegedly caused by a Product. 10. Insurance Supplier shall maintain and keep in force adequate business and products liability insurance and products and completed operations coverage. If Supplier delivers products to Danfoss Supplier’s insurance shall include recall covering such products. The insurance is to be in effect at a minimum for the term of the Parties’ business co-operation and for a period of five (5) years hereafter. As proof of such insurance Supplier shall prior to Supplier’s acceptance of a Danfoss purchase order provide Danfoss with an insurance Classified as Business Danfoss General Terms and Conditions of Purchase, version 2020-01
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