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Intellihot Inc. - Purchase Order Terms and Conditions

  1. AGREEMENT. These Purchase Order Terms and Conditions shall apply to any Purchase Order (a “PO”) issued to Seller by Intellihot Inc. or its worldwide subsidiaries and affiliated companies, hereinafter referred to as “Intellihot.”  Unless otherwise provided in a written agreement executed by Seller and Intellihot, each PO accepted by Seller, together with all documents expressly referenced in such PO, the Representations and Certifications form executed by Seller (if any) and these Terms and Conditions, shall constitute the entire agreement (the “Agreement”) between Intellihot and Seller with respect to the purchase, sale and delivery of the Products and/or Services described in such PO  (the “Products”) and the performance of any work described in the PO and shall supersede all prior agreements, understanding and representation between Seller and Intellihot with respect thereto.  Any additional or different terms stated by Seller in any proposal, quotation, confirmation, acknowledgement, invoice, or otherwise shall be of no force and effect, and no course of dealing, usage of trade, or course of performance shall be relevant to explain or supplement any term expressed in the Agreement.
  2. DELIVERY. Time is of the essence in the performance of Seller’s obligations under the Agreement.  Delivery must be affected within the time specified in this Agreement. If delivery is not timely made, Buyer may, in addition to its other rights and remedies, direct Seller to make expedited routing at Seller’s expense. The goods shall be properly packed, marked, loaded and shipped as required by this Agreement and by the transporting carrier. Unless Buyer instructs otherwise, the goods shall be shipped in a manner that will permit the lowest transportation rates to apply. Seller shall reimburse Buyer for all expenses incurred due to improper packing, marking, loading or routing. The risk of loss or damage in transit shall be upon Seller, except where shipment is by Buyer’s vehicle, in which case the risk of loss or damage shall pass to Buyer upon completion of loading. Seller shall not procure, produce or ship any goods unless authorized in writing by Buyer or as necessary to meet specific delivery dates. Shipments in excess of those authorized by Buyer or shipments received by Buyer in advance of the scheduled delivery date may be returned to Seller at Seller’s expense, and such determination shall be at the sole discretion of Buyer. Buyer may change shipping schedules or direct temporary suspension of such scheduled shipments.
  3. TITLE AND RISK OF LOSS. Seller warrants that it has good and clear title, free from any security interest, lien or other encumbrance to all Products to be delivered to Intellihot.  Title and risk of loss or damage to the Products shall pass to Intellihot upon delivery to the FOB point, subject to Intellihot’s right to reject non-conforming Products.  Notwithstanding the foregoing, risk of loss of any non-conforming Products or delivery shall remain with Seller unless and until Intellihot finally accepts such Products or deliveries.
  4. INSPECTION: ACCEPTANCE. Buyer reserves the right to inspect and test all Products and/or Services within a reasonable time after delivery to Buyer. In addition to all other rights provided by law, Buyer may reject any Products and/or Services that: (i) are damaged, (ii) do not conform to the specifications set forth in this Order and those which are provided to Supplier thereafter as well as all descriptions, models, samples, and other information and materials made available by Supplier (collectively “Specifications”) or the warranties, (iii) are not shipped correctly or on time, or (iv) are not properly packaged as required herein.  Any return and/or replacement of Products hereunder shall be at Supplier’s sole cost and expense. At Intellihot’s option, Intellihot may return non-conforming Products or work to Seller, freight collect or Intellihot may modify or adapt non-conforming Products or work to render it acceptable.  If Intellihot elects to return such non-conforming Products or work, Seller shall issue a return authorization number for all non-conforming Products or work within 24 hours after Intellihot’s request, such non-conforming Products or work shall be the property of the Seller.  If Intellihot elects to modify or adapt non-conforming products or work, Intellihot may offset all cost incurred in performing any such modifications and adaptations against any and all amounts otherwise due to Seller or, at Intellihot’s option, may bill Seller directly for such costs.
  5. PRICE AND PAYMENT TERMS. The prices of Products delivered, and work performed shall be as specified in the Intellihot PO.  All invoices must include at minimum, PO number, line on the PO to be invoiced, quantity shipped and verify received along with unit price as stated on PO.  Upon submission of proper invoices, Buyer shall process for payment.  Seller shall present all invoices for goods and services on a timely basis.  All invoices must be received by Buyer no later than sixty (60) days after the delivery of goods or completion of work.  Time is of the essence in this regard.  Any invoice received by Buyer later than said sixty (60) days shall be payable at Buyer’s sole discretion.   Intellihot shall pay for Products and work accepted per the terms specified on the PO or within forty-five (45) days after Intellihot’s acceptance of such Products and/or Services. Intellihot shall have no obligation to pay for any Products or work that is rejected or as to which acceptance is revoked in accordance with Paragraph 4 above.
  6.  REPRESENTATION / WARRANTY.  Seller represents and warrants that all Products delivered, and work performed under the Agreement shall be free from defects in workmanship and material and fit for the purposes for which such Products or work is intended.  Further, all Products delivered, and work performed shall contain all new materials, shall strictly conform to the requirements stated in the PO and all other specifications furnished by Intellihot therefore, and shall conform to Seller’s specifications to the extent such specifications are consistent with those provided by Intellihot.  The foregoing warranties shall remain in effect for a period of 12 months from the date of first use of the goods by Buyer or 12 months from the date of acceptance by Buyer or 12 months following the completion of Services, whichever occurs later. In the case of any latent defect or any defect caused or concealed by fraud or gross negligence the warranty period shall be extended until the expiration of (1) year after Intellihot’s actual discovery of such defect.  As a remedy for breach of any of the foregoing warranties, Intellihot may elect, at Intellihot’s option (a) the repair or replacement of non-conforming Products or work which shall be accomplished by Seller at no charge to Intellihot in accordance with Paragraph 4 above; (b) modifications or adaptations of the non-conforming Products or work at Seller’s expense in accordance with Paragraph 4 above; or (c) return of the non-conforming Products or work to Seller and a full return to Intellihot of the aggregate purchase price paid therefore.
  7. INFRINGMENT. In addition to the representations and warranties set forth in Paragraph 6 above, Seller represents and warrants that all Products delivered and work performed shall be delivered free of any claim that such Products or work infringes any patent, copyright, trademark, trade secret, or other intellectual property right of any third party, except insofar as such claims are based solely on Seller’s literal compliance with Intellihot’s written specifications for such Products or work.  Seller shall indemnify, defend and hold Intellihot and its customers harmless against any losses, damages, liability, cost and expenses (including reasonable attorney’s fees) arising out of or resulting from (a) any breach or alleged breach of the representations and warranties made by Seller in this Agreement, and (b) any claim, suit or proceeding brought against Intellihot for infringement of any patent, copyright, trademark, trade secret or other intellectual property right in connection with the Products or work.  Intellihot will notify Seller of any such claim and permit Seller, at Seller’s sole expense, to defend or settle such claim,  In the event that any Product or work is determined to infringe any intellectual property right of any third party, Seller shall, at Intellihot’s options, either; (i) obtain from such third party, at Seller’s sole expense, the right for Intellihot and Intellihot’s customers to continue using the infringing Product and/or work, or (ii) modify the Products and/or work at Seller’s sole expense so as to render them non-infringing while maintaining substantially identical fit, form and function or (iii)  refund to Intellihot the aggregate purchase price paid for all infringing Products and work.
  8. LIMITATION OF LIABILITY. In no event shall buyer be liable to seller for an incidental, indirect, special or consequential damages arising out of, or in connection with, this order, whether or not buyer was advised of the possibility of such damages.
  9. INDEMNITY. (a) Seller shall be responsible for the actions and failure to act of all parties retained by, through, or under Seller in connection with the performance of this Order. (b) Seller shall, without limitation, indemnify and save Buyer and its customers, and their respective officers, directors, employees and agents harmless from and against all claims and resulting costs, expenses and liability, which arise from claimed or actual infringement or violation of any trade secret, personal injury, death, or property loss or damage attributed to, or caused by, the Products or Services. (c) Should Buyer’s use, or use by its customers, of any Products or Services be enjoined, be threatened by injunction, or be the subject of any legal proceeding, Seller shall, at is sole cost and expense, (i) substitute fully equivalent non-infringing products or services; (ii) modify the Products or Services so that they no longer infringe but remain fully equivalent in functionality; (iii) obtain for Buyer and its customers the right to continue using the Products or Services; or (iv) if none of the foregoing is possible, refund all amounts paid for the infringing Products or Services.
  10. INTELLIHOT PROPERTY. All property used by Seller in connection with its performance under the Agreement which is owned, furnished , or consigned by Intellihot, or is charged to or paid for by Intellihot, including but not limited to materials, tools, dies, jigs, molds, patterns, fixtures, equipment, drawings, specifications and other technical documentations (the “property”) shall be and remain the property of Intellihot. Unless already so marked by Intellihot, Seller shall identify and conspicuously mark all Property as belonging to Intellihot and, upon request, shall furnish Intellihot a list of all Property being held by Seller.  All Property shall be used only for Seller’s performance under the Agreement and held in Seller’s risk and insured at Seller’s sole expense in an amount equal to its replacement cost, with loss payable to Intellihot.  Intellihot may inspect and/or remove any Property at any time at no charge to Intellihot, and Intellihot shall have reasonable access to Seller’s premises for such purpose.  Seller shall immediately return such Property to Intellihot upon Intellihot’s demand at Seller’s sole expense.
  11. PATENT AND DATA RIGHTS. Seller agrees to promptly disclose to Intellihot and, upon request, to assign to Intellihot, each invention conceived or first actually reduced to practice during the performance of the Agreement. Further, Seller hereby grants to Intellihot a royalty-free non-exclusive, unrestricted, irrevocable, world-wide license to use, duplicate, or disclose for any purpose whatsoever, and to authorize others to do so, all data and information (including but not limited to writings, recording, pictorial reproductions, drawings, computer programs, other graphics representation and work of any similar nature) required to be furnished and/or actually furnished to Intellihot under the Agreement.
  12. CONFIDENTIALITY;  PUBLICITY.  Except as is reasonably necessary for its performance under the Agreement, Seller shall not disclose to any person (including but not limited to any company affiliated with Seller and any consultant or independent contractor of Seller), or reproduce, or use any information furnished by Intellihot under the Agreement (whether or not marked as confidential or proprietary), and at Intellihot’s request Seller shall return all such information to Intellihot.  This includes any tangible or intangible non-public information in any form (including written information, oral statements or electronically stored data) which is acquired from the Buyer or its customers.  Further, Seller shall not issue any news releases, advertisement, publicity, or promotional material regarding the Agreement or Seller’s relationship with Intellihot without Intellihot’s prior written consent.  The provisions of this Paragraph 10 shall survive the termination or cancellation of this Agreement and/or any or all PO’s under the Agreement.
  1. CHANGES. Intellihot may at any time instruct Seller to make changes within the general scope of the Agreement in any of the following: (i) Intellihot’s drawings, designs, or specifications furnished to Seller; (ii) Seller’s method of shipment or packing; (iii) the quantities of product ordered; (iv) the place of delivery; and/or (v) the delivery schedule.  If any such change causes an increase or decrease in the cost of, or time required for, performance under the Agreement, Seller shall have thirty (30) days to request adjustments in the price and/or delivery schedule for Products directly affected by Intellihot’s changes.  To the extent that Intellihot agrees to such adjustments, Intellihot will revise the PO accordingly.  Any requests by Seller for adjustments under this Paragraph 14 shall be deemed waived if not asserted within such 30-day period and/or prior to shipment of such order, and failure to agree to an adjustment shall not excuse Seller from performing in accordance with the revised PO in the event that Seller makes changes in its design, manufacturing process, or specifications that affect products to be delivered or work to be performed under the Agreement, even if such changes do not materially affect the form, fit or function of such Products or work.  Seller shall inform Intellihot of such changes not less than (30) days before the Due Date in the PO specified for such Products or work.  Supplier shall give Buyer at least 180 days’ prior written notice before discontinuing the production of any Products covered by this Order, during which time Supplier shall accept final orders from Buyer at the negotiated price.  Any requests by Seller for adjustments under this Paragraph 14 shall be deemed waived if not asserted within such 30-day period and/or prior to shipment of such order, and failure to agree to an adjustment shall not excuse Seller from performing in accordance with the revised PO.  In the event that Seller makes changes in its design, manufacturing process, or specifications that affect products to be delivered or work to be performed under the Agreement, even if such changes do not materially affect the form, fit or function of such Products or work, seller shall inform Intellihot of such changes not less than (30) days before the Due Date in the PO specified for such Products or work.
  2. TERMINATION; CANCELLATION. Unless otherwise provided in a written agreement executed by Seller and Intellihot, Intellihot may terminate any PO or any portion thereof upon giving notice to Seller of such termination not less than two (2) business days prior to the earliest applicable Due Date set forth in the original PO and Intellihot will revise or revoke the PO accordingly. Within ten (10) business days after receiving notice of such termination, Seller shall advise Intellihot in writing of any cancellation charges it desires to impose as a direct result of such termination.  Cancellation charges can only consist of actual out of pocket costs incurred by Seller for unique material purchased or labor incurred to build product unique to Buyer.  To the extent such charges are deemed reasonable in Intellihot’s sole discretion; Intellihot will pay such cancellation charges within forty-five (45) days after the date of the Seller’s written request.  Any request by Seller for cancellation charges shall be deemed waived if not asserted within ten (10) business days after Intellihot’s termination notice.

Notwithstanding the foregoing, Intellihot may cancel any PO or portion thereof without charge at any time upon notice to Seller if; (a) Seller fails to timely perform any of its obligations under the Agreement and such failure is not cured within ten (10) days after written notice of such failure is delivered to Seller, and/or (b) there is or comes to be any material misstatement or omission in the Representations and Certifications submitted to Intellihot by Seller (if any).

  1. ASSIGNMENT. Seller shall not assign any of its rights or delegate any of its obligations under the Agreement without the prior written consent of Intellihot, and any assignments in violation of this provision shall be null and void.  Notwithstanding the foregoing Seller may assign claims for monies due or to become due under the Agreement without Intellihot’s consent, provided that Seller promptly furnishes Intellihot with two signed copies of all documentation evidencing such assignment and further provide that payment to any assignee shall be subject to setoff or recoupment of any present or future claims(s) that Intellihot may have against Seller.  Regardless of any such assignment, Intellihot shall continue to deal directly with Seller with respect to all matters other than payment of monies due under the Agreement.
  2. COMPLIANCE WITH LAWS. By acceptance of Intellihot’s PO, Seller is certifying that Seller is in full compliance with all applicable laws, regulations, and rules of all governmental authorities having jurisdiction and will obtain all necessary permits, licenses, and consents of all governmental authorities necessary for the performance of this Order.  Without limiting the generality of this Section, Supplier agrees to fully comply with all export and import laws and regulations of the United States, the European Union, and other countries, including, but not limited to, the United States Export Administration Regulations. 

This includes the Fair Labor Standards Act of 1938, as amended, and regulations issued thereunder.  The Agreement is subject to Executive Order 11246 and Labor Department Order No. 4, including revision of December 4, 1971, OPCCP order No. 14, January 14, 1972 section 503 of the Rehabilitation Act of 1973, section 402 of the Vietnam Era Veterans Readjustment and Assistance Act of 1974, the Americans with Disabilities Act of 1990, and all rules and regulations promulgated pursuant thereto, as any of such laws of regulations may be amended at any time, all of which are incorporated herein by this reference.

Upon request, Seller shall furnish Intellihot with satisfactory evidence of its compliance with the representation in the Paragraph 3.

  1. APPLICABLE LAW. This Agreement and any claim, dispute, action,

or issue arising out of or relating to this Agreement or the Services is governed by the laws of the State of Illinois without reference to conflict of laws principles. The parties hereby consent to the exclusive jurisdiction of, and venue in, the federal or state courts of competent jurisdiction located in Cook County in the State of Illinois for the purposes of adjudicating all such claims or disputes. The prevailing party in any legal proceeding shall be entitled to recover its reasonable attorney’s fees incurred in connection therewith.  The U.N. Convention of Contracts for the International Sale of Goods shall not apply to the purchase of Products or services by Intellihot.

  1. INSURANCE. At Seller’s own cost, Seller shall obtain and keep (until completion of this Order), worker’s compensation and general comprehensive liability insurance covering each occurrence of bodily injury and property damage in the amount of not less than USD$2,000,000 combined single limit, with special endorsements providing coverage for: (i) Products and Completed Operations Liability; (ii) Blanket Broad Form Supplier’s Liability; (iii) Blanket Contractual Liability; and (iv) Automobile Liability. If requested, Supplier shall furnish Buyer with a certificate evidencing the required insurance. If Supplier or any of its employees, consultants, or agents enter Buyer’s premises in the course of fulfilling this Order, they shall at all times comply with Buyer’s safety and security policy, a copy of which is available upon request.  The Seller’s insurance coverage is primary and noncontributory to that of Buyer’s.  Seller’s purchase of insurance coverage and the furnishing of certificates of insurance shall not release Seller of its obligations or liabilities under this Agreement.  In the event of Seller’s breach of this provision, Buyer shall have the right to cancel the undelivered portion of any goods or services covered by this Agreement and shall not be required to make further payments except for conforming goods delivered or services rendered prior to cancellation.
  2. INGREDIENTS DISCLOSURE. If any of the items ordered constitute or contain “hazardous or toxic chemicals” or “hazardous substances” or flammable or hazardous “petroleum products” as defined by any applicable Federal, State or local law, rule or regulation, Seller shall provide at the time of delivery all required notices and information, including without limitation, notices and information for OSHA, MSHA and Material Safety Data Sheets. Seller agrees to maintain such information current and shall provide Buyer with any amended, altered or revised information on a timely basis.  Seller warrants that the goods supplied under this Agreement do not contain any substance whose use is prohibited under Federal, State, or local law, including, but not limited to the Clean Air Act, the Toxic Substance Control Act, or the Federal Insecticide Fungicide and Rodenticide Act, and that any applicable requirements under these laws have been satisfied by Seller.  

If requested by Buyer, Seller shall promptly furnish to Buyer in such form and detail as Buyer may direct: (a) a list of all ingredients in the goods purchased; (b) the amount of one or more ingredients; and (c) information concerning any changes in or additions to such ingredients.  Prior to and with the shipment of the goods purchased, Seller agrees to furnish to Buyer sufficient warning and notice in writing (including appropriate placarding and labels on goods, containers, packing and vehicles used for shipment) of any “hazardous substance” which is an ingredient or a part of any of the goods, together with such special handling instructions as may be necessary to advise Buyer and third parties, including transportation carriers and Buyer’s employees, as to the degree of care and precaution that will best prevent bodily injury or property damage in the handling, transportation, processing, use, recycling or disposal of the goods.

  1. FORCE MAJEURE. Any delay or failure of either party to perform its obligations shall be excused if it is caused by an extraordinary event or occurrence beyond the control of the nonperforming party and without the nonperforming party’s fault or negligence, such as acts of God, fires, floods, windstorms, explosions, riots, natural disasters, wars and sabotage. Written notice of such delay, including the anticipated duration of the delay, must be given by the nonperforming party within ten (10) days of the event.  During the period of any delay or failure to perform by Seller, Buyer, at its option, may purchase goods from other sources and reduce its schedules to Seller by such quantities, without liability to Buyer, or cause Seller to provide the goods from other sources in quantities and at times requested by Buyer and at the price set forth in this Agreement.  If requested by Buyer, Seller shall, within five (5) days of such request, provide adequate assurance that the delay will not exceed such period of time as Buyer deems appropriate.  If the delay lasts more than the time period specified by Buyer, or Seller does not provide adequate assurance that the delay will cease within such time period, Buyer may, among its other remedies, immediately cancel this Agreement without liability.
  2. MISCELLANEOUS PROVISIONS. No addition or modifications to the Agreement shall be effective unless made in writing and signed by the respective representatives of Seller and Intellihot. Any delay or failure to enforce at any time any provision of the Agreement shall not constitute a waiver of the right thereafter to enforce each and every provision thereof.  If any of the provisions of the Agreement is determined to be invalid, illegal or otherwise unenforceable, the remaining provisions shall remain in full force and effect.  The rights and remedies expressly provided to Intellihot herein are not exclusive but are cumulative and in addition to any other rights and remedies available at law or in equity.