Purchasing Terms

STANDARD MANUFACTURING TERMS & CONDITIONS OF PURCHASE

1. Interpretation
   • Definitions:

• Adverse Impacts: means a potential or actual human rights harm, including human rights harms resulting from harms to the environment, which one or both parties have either caused, contributed to, or are directly linked to (through their products, services, and business relationships).
• Business Day: a day other than a Saturday, Sunday or public holiday in England, when banks in London are open for business.
• Business Hours: the period from 9.00 am to 5.00 pm on any Business Day.
• Conditions: the terms and conditions set out in this document as amended from time to time in accordance with clause 4.
• Contract: the contract between the Customer and the Supplier for the sale and purchase of the Goods in accordance with these Conditions.
• Customer Materials: has the meaning set out in clause 8.
• Delivery Date: the date specified in the Order, or, in the Commercial Terms.
• Delivery Location: the address for delivery of Goods as set out in the Order or in the Commercial Terms.
• Force Majeure Event: means any circumstance not within a party's reasonable control including acts of God, flood, drought, earthquake or other natural disaster; epidemic or pandemic; terrorist attack, civil war, civil commotion or riots, war, threat of or preparation for war, armed conflict, imposition of sanctions, embargo, or breaking off of diplomatic relations; government ordered lockdown or shelter in place equivalents and resulting consequences; nuclear, chemical or biological contamination or sonic boom; any law or any action taken by a government or public authority, including imposing an export or import restriction or actions due to a pandemic or other national or international health or environmental emergency, quota or prohibition, or failing to grant a necessary licence or consent where such failure is not reasonably foreseeable; collapse of buildings, fire, explosion or accident; any labour or trade dispute, strikes, industrial action or lockouts (other than in each case by the party seeking to rely on this clause, or companies in the same group as that party); non-performance by manufacturers suppliers or subcontractors for whatever reason; interruption or failure of utility service.
• Goods: the goods (or any part of them) set out in the Order or in the Commercial Terms.

Homeworker: Any person whose employment is predominately carried out in their home or in other premises of their choice, other than the workplace of the employer; for remuneration; and which results in a product or service as specified by the employer as defined by ILO Convention 177.

• Human Rights and Environmental Due Diligence (HREDD): a process appropriate to its size and circumstances to identify, prevent, mitigate, and address adverse human rights and environmental impacts.
• Mandatory Policies: the Customer's business policies and codes listed in Schedule 1 as amended by notification to the Supplier from time to time.
• Order: the Customer's order for the Goods, as set out in the Customer's purchase order form.
• Specification: any specification for the Goods, including any related plans and drawings set out in the Commercial Terms.
• Subcontractor: Facility (or domestic premises for Homeworking) where production aspects are undertaken and work directly with the principal facility.
  • Interpretation:
    • A person includes a natural person, corporate or unincorporated body (whether or not having separate legal personality).
    • A reference to a party includes its [personal representatives,] successors and permitted assigns.
    • A reference to legislation or a legislative provision is a reference to it as amended or re-enacted. A reference to legislation or a legislative provision includes all subordinate legislation made under that legislation or legislative provision.
    • Any words following the terms including, include, in particular, for example or any similar expression shall be interpreted as illustrative and shall not limit the sense of the words preceding those terms.
    • A reference to writing or written excludes fax but not email.

2. Basis of contract and Orders
   • These Conditions apply to the Contract to the exclusion of any other terms that the Supplier seeks to impose or incorporate, or which are implied by law, trade custom, practice or course of dealing.
   • The Order constitutes an offer by the Customer to purchase the Goods in accordance with these Conditions.
   • The Order shall be deemed to be accepted on the earlier of:
     • the Supplier issuing a written acceptance of the Order; and
     • the Supplier doing any act consistent with fulfilling the Order,

at which point the Contract shall come into existence.

• The Supplier waives any right it might otherwise have to rely on any term endorsed upon, delivered with or contained in any documents of the Supplier (including but not limited to Terms and Conditions incorporated in the Supplier’s invoice).
• For any change to an agreed Order (including, but not limited to, cancellations, change orders, quantity increases or decreases, or changes to design specifications) requested by Customer or Supplier, Customer and Supplier shall consider the Adverse Impacts of such change and take action to avoid or mitigate Adverse Impacts, such as by increasing the price to accommodate overtime wages, extending the deadline, or by allowing responsible subcontracting.
• Forecasting:

The Customer shall establish forecasting processes that take into account Supplier’s production capacity and end customer demand. Customer shall share initial and updated forecasts in a timely manner to allow Supplier a sufficient time to meet Customer’s ongoing requirements. Nevertheless, neither forecasts nor projections are binding on Customer or Supplier unless otherwise agreed.

• Production capacity and deadlines:
  • The Customer and Supplier shall cooperate to establish the production capacity of the Supplier to meet the requirements of the Customer. Such cooperation shall include dialogue between Customer and Supplier and may also include inspections of records and facilities.

 

• The Customer and Supplier agree to collaborate to set reasonable deadlines that take Supplier’s production capacity into account. Such deadlines and other aspects of the timeline shall be renegotiated between the parties as necessary to avoid Adverse Impacts that may result from delays, deadlines, or other timing requirements.

• Samples:

Samples, whether produced as part of the style development process or after the style has been adopted, as well as the processes related to samples, shall be managed by both parties to minimise the financial burdens on the Customer and Supplier. Digital samples shall be used where appropriate. The Customer shall provide feedback on all samples, and the parties shall agree expeditiously on design and related matters to enable Supplier to begin manufacture.

3. The Goods
   • The Supplier shall ensure that the Goods shall:
     • correspond with their description and any applicable Specification;
     • be of satisfactory quality (within the meaning of the Sale of Goods Act 1979) and fit for any purpose held out by the Supplier or made known to the Supplier by the Customer expressly or by implication, and in this respect the Customer relies on the Supplier's skill and judgement;
     • where they are manufactured products, be free from defects in design, material and workmanship and remain so for twenty-four (24) months after delivery; and
     • comply with all applicable statutory and regulatory requirements relating to the manufacture, testing, recyclability, compostability, labelling, packaging, storage, handling and delivery of the Goods.
   • The Supplier shall ensure that at all times it has and maintains all the licences, permissions, authorisations, consents and permits that it needs to carry out its obligations under the Contract.
   • The Customer may inspect and test the Goods at any time before delivery and within 4 weeks after delivery. The Supplier shall remain fully responsible for the Goods despite any such inspection or testing and any such inspection or testing shall not reduce or otherwise affect the Supplier's obligations under the Contract.
   • If following such inspection or testing the Customer considers that the Goods do not conform or are unlikely to comply with the Supplier's undertakings at clause 1, the Customer shall inform the Supplier and the Supplier shall immediately take such remedial action as is necessary to ensure compliance.
   • The Customer may conduct further inspections and tests after the Supplier has carried out its remedial actions.
4. Delivery
   • The Supplier shall ensure that:
     • the Goods are properly packed and secured in such manner as to enable them to reach their destination in good condition;
     • each delivery of the Goods is accompanied by a commercial invoice and a delivery note which shows the date of the Order, the Purchase Order (“PO”) number (if any), the type and quantity of the Goods (including the code number of the Goods, where applicable), certification standard (if relevant), special storage instructions (if any) and, if the Goods are being delivered by instalments, the outstanding balance of Goods remaining to be delivered, the commercial invoice; and
   • The Supplier shall deliver the Goods:
     • on the Delivery Date;
     • at the Delivery Location; and
     • during the Customer's normal business hours, or as instructed by the Customer.
   • Delivery of the Goods shall be completed on the completion of unloading the Goods at the Delivery Location.
   • If the Supplier:
     • delivers less than 95% of the quantity of Goods ordered, the Customer may reject the Goods; or
     • delivers more than 105% of the quantity of Goods ordered, the Customer may at its discretion reject the Goods or the excess Goods and any rejected Goods shall be returnable at the Supplier's risk and expense.

If the Supplier delivers more or less than the quantity of Goods ordered, and the Customer accepts the delivery, a pro rata adjustment shall be made to the invoice for the Goods.

• The Supplier shall not deliver the Goods in instalments without the Customer's prior written consent. Where it is agreed that the Goods are to be delivered by instalments, they may be invoiced and paid for separately. However, failure by the Supplier to deliver any one instalment on time or at all, or any defect in an instalment shall entitle the Customer to the remedies set out in clause 5.

5. Customer remedies
   • If the Goods are not delivered on the Delivery Date, or do not comply with the undertakings set out in clause 1, then, without limiting any of its other rights or remedies, and whether or not it has accepted the Goods, the Customer may exercise any one or more of the following rights and remedies:
     • to terminate the Contract;
     • to reject the Goods (in whole or in part) and return them to the Supplier at the Supplier's own risk and expense;
     • to require the Supplier to repair or replace the rejected Goods, or to provide a full refund of the price of the rejected Goods [(if paid)];
     • to refuse to accept any subsequent delivery of the Goods which the Supplier attempts to make;
     • to claim damages for any other costs, loss or expenses incurred by the Customer which are in any way attributable to the Supplier's failure to carry out its obligations under the Contract.
   • Where the Supplier remedies its default under Clause 5.1 within the time period notified to it by the Customer, the Customer may at its sole discretion choose not to enforce any or all of the rights of the remedies set out in Clause 5.1(a) to (f).
   • These Conditions shall apply to any repaired or replacement Goods supplied by the Supplier.
   • The Customer's rights and remedies under these Conditions are in addition to its rights and remedies implied by statute and common law.
6. Title and risk

Title and risk in the Goods shall pass to the Customer on completion of delivery.

7. Price and payment

The price of the Goods shall be the price set out in the Order. The Customer and Supplier shall collaborate to agree on a price, taking into account the scope and size of the contract, that accommodates the costs associated with upholding responsible business conduct, including the payment of a fair wage to workers. This includes progress towards the local Living Wage if this is not currently paid by the Supplier. Supplier shall provide open costings to Customer, inclusive of labour costs. These costings will be used to ensure product cost is enough for fair wages to be paid and price negotiations will not inhibit wages being paid. 

• The price of the Goods:
  • excludes amounts in respect of value added tax (VAT), which the Customer shall additionally be liable to pay to the Supplier at the prevailing rate, subject to the receipt of a valid VAT invoice; and
  • includes the costs of packaging, insurance and carriage of the Goods.
• Volume discounts shall be calculated by reference to the Product Prices and the volume ordered. The discounts shall be exclusive of any VAT and other discounts, and any incidental costs payable in respect of the Products.
• No extra charges shall be effective unless agreed in writing with the Customer.
• The Supplier may invoice the Customer for price of the Goods plus VAT at the prevailing rate (if applicable) on or at any time after the completion of delivery. The Supplier shall ensure that the invoice includes the date of the Order, the invoice number, the Customer's order number, the Supplier's VAT registration number and any supporting documents that the Customer may reasonably require. The Customer shall collaborate with Supplier to agree on commercial terms, including payment and delivery terms. These terms should not impede the ability for the Supplier to respect HREDD. Any delays in payments or delivery from either party will be communicated in writing with an explanation. 
• The Customer may at any time, without notice to the Supplier, set off any liability of the Supplier to the Customer against any liability of the Customer to the Supplier, whether either liability is present or future, liquidated or unliquidated, and whether or not either liability arises under the Contract. If the liabilities to be set off are expressed in different currencies, the Customer may convert either liability at a market rate of exchange for the purpose of set-off. Any exercise by the Customer of its rights under this clause shall not limit or affect any other rights or remedies available to it under the Contract or otherwise.
• Charges, chargebacks or liquidated damages will only be used in exceptional circumstances, with pre-agreement between Supplier and Customer. They will only be levied by the Customer after a discussion and fact finding to understand the root causes. These may be used in the event of delays, non-conformity of the goods, or any other default (including a HREDD-Related Default). The Customer will keep a log of Supplier evaluations and ensure that any liquidated damages are a reasonable and fair pre-estimate of loss.

8. Customer materials

The Supplier acknowledges that all materials, equipment and tools, drawings, specifications, and data supplied by the Customer to the Supplier (“Customer Materials”) and all rights in the Customer Materials are and shall remain the exclusive property of the Customer. The Supplier shall keep the Customer Materials in safe custody at its own risk, maintain them in good condition until returned to the Customer on request at any time or on termination or expiry of the Contract and not dispose or use the same other than in accordance with the Customer's written instructions or authorisation.

9. Indemnity
   • The Supplier shall indemnify the Customer against all liabilities, costs, expenses, damages and losses (including but not limited to any direct, indirect or consequential losses, loss of profit, loss of reputation and all interest, penalties and legal costs (calculated on a full indemnity basis) and all other reasonable professional costs and expenses) suffered or incurred by the Customer as a result of or in connection with:
     • any claim made against the Customer for actual or alleged infringement of a third party's intellectual property rights arising out of or in connection with the manufacture, supply or use of the Goods, to the extent that the claim is attributable to the acts or omissions of the Supplier, its employees, agents or subcontractors;
     • any claim made against the Customer by a third party for death, personal injury or damage to property arising out of or in connection with defects in Goods, to the extent that the defects in the Goods are attributable to the acts or omissions of the Supplier, its employees, agents or subcontractors;
     • any claim made against the Customer by a third party arising out of or in connection with the supply of the Goods, to the extent that such claim arises out of the breach, negligent performance or failure or delay in performance of the Contract by the Supplier, its employees, agents or subcontractors; and
     • any claims made against the Customer by a third party arising out of or in connection with any claim or information provided by the Supplier to the Customer in relation to the Goods which are incorrect, false, or misleading.
   • This clause 9 shall survive termination of the Contract.
10. Insurance

During the term of the Contract and for a period of three (3) years thereafter, the Supplier shall maintain in force, with a reputable insurance company, professional indemnity insurance, product liability insurance and public liability insurance to cover the liabilities that may arise under or in connection with the Contract, and shall, on the Customer's request, produce both the insurance certificate giving details of cover and the receipt for the current year's premium in respect of each insurance.

11. Confidentiality
    • Each party undertakes that it shall not at any time disclose to any person any confidential information concerning the business, assets, affairs, customers, clients or suppliers of the other party, except as permitted by clause 2.
    • Each party may disclose the other party's confidential information:
      • to its employees, officers, representatives, contractors, subcontractors or advisers who need to know such information for the purposes of exercising the party's rights or carrying out its obligations under the Contract. Each party shall ensure that its employees, officers, representatives, contractors, subcontractors or advisers to whom it discloses the other party's confidential information comply with this clause 11; and
      • as may be required by law, a court of competent jurisdiction or any governmental or regulatory authority.
    • Neither party shall use the other party's confidential information for any purpose other than to exercise its rights and perform its obligations under or in connection with the Contract.
12. Compliance with relevant laws and policies
    • In performing its obligations under the Contract, the Supplier must:
      • comply with all applicable laws, statutes, regulations and codes from time to time in force; and
      • comply with the Mandatory Policies.
      • Comply with relevant certification standards, including;
    • meeting all applicable standards and be responsible for managing conformity with relevant certification standard(s)
    • holding a scope certificate to the appropriate certification standard(s)
    • maintaining physical separation of the claimed material from all other materials present at the Supplier’s site(s)
    • not further outsource any processing or storage of the claimed material without having subcontractors added to their scope certificate or separate scope certificate covering the outsourcing site.
    • informing PANGAIA within seven (7) calendar days of any change in their certification status, including suspension, withdrawal, expiry, or recertification. 
    • providing the organization with an updated scope certificate upon recertification.
    • prior to sending any shipment of claimed material the suppliers shall ensure they share a current and valid scope certificate for PANGAIA which reflects the products that are being purchased for certified qualities to product level.
    • following the certification body’s instructions regarding transaction certificates and provide these for all PANGAIA orders where relevant.
    • ensuring that sufficient transport records are used to track the movement of outsourced claimed materials, both when materials are sent to a subcontractor and when they are returned to PANGAIA.
    • requesting Transaction Certifications from their certification body within 14 days (or as outlined in the policy for Transaction Certificates from the certification standard) and share with PANGAIA in a timely manner and in any case no more than fourteen (14) days after receipt of the Transaction Certifications.
    • adding PANGAIA’s license code (TE-99973450), acronym of standard and clearly state on invoice (or supplementary sales document) what products are certified and what are not prior to shipping.

 

PANGAIA will provide any updates to its certification status to Suppliers, including changes to license code.

 

• Shared responsibility to carry out human rights and environmental due diligence
  • The Customer and Supplier both commits to establish, maintain, and cooperate in a human rights and environmental due diligence (“HREDD”) process appropriate to its size and circumstances to identify, prevent, mitigate, and address any direct and indirect adverse impact of their activities on human rights of individuals affected by their supply chain. Such HREDD shall be consistent with the 2011 United Nations Guiding Principles on Business and Human Rights (UNGPs) and the Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector (2018). The Customer shall support Supplier’s adherence to the Supplier Code of Conduct by engaging in responsible purchasing practices and HREDD.

12.2.2    Reasonable assistance:  if, through the HREDD process carried out in accordance with this Agreement, either party determines that Supplier requires reasonable assistance to comply with the PANGAIA Supplier Code of Conduct, the Customer shall provide such assistance. Reasonable assistance may include resources, sharing tools and expert guidance, cost-sharing relative to size and circumstance. 

12.2.3    HREDD Adverse Impacts and remedy:

This Clause 12.2.3 applies if an actual Adverse Impact occurs and if either or both parties caused or contributed to such Adverse Impact. For purposes of this Agreement, a party can be deemed to have contributed to an actual Adverse Impact if it failed to satisfy a HREDD-related obligation under this Agreement. Following the identification of an Adverse Impact the issue shall be investigated in a timely manner (as outlined within a corrective action plan), reasonable details will be provided to both parties updating them on the findings and a remediation plan must be implemented. The party or parties responsible for the Adverse Impact shall take all reasonable steps to implement the Remediation Plan within the timeframe agreed between the parties and provide reasonably satisfactory evidence of the remediation plan's implementation. Failure to remediate:

A failure by the Supplier to prepare, or properly implement, a remediation plan is a material breach of this Agreement, and shall have the right to exercise its remedies, including termination. If the decision is made to terminate this Agreement, the Customer shall do so in accordance with the Responsible Exit Process (13.2).

12.3     The Customer may immediately terminate the Contract for any breach of clause 12.

13. Termination
    • The Customer may terminate the Contract in whole or in part at any time before delivery of the Goods with immediate effect by giving the Supplier written notice, whereupon the Supplier shall discontinue all work on the Contract. The Customer shall pay the Supplier for any work in progress on the Goods at the time of termination, but such payment shall not include any compensation including but not limited to loss of anticipated profits or any consequential loss.
    • Responsible Exit Process: Before taking the decision to exit any supplier the Customer will engage internal departments to collect information about the supplier relationship, investigate any ethical concerns and review the order quantities, relationship history and duration before taking any action. The Customer will ensure that the supplier is informed of our decision if there is reason to exit and that an appropriate timeline is agreed. This timeline will differ based on volume and frequency of orders. The Customer also may at its sole discretion gradually decrease order numbers so that the supplier has the opportunity to build up business with other customers or if absolutely necessary adjust the number of workers at the facility in the appropriate manner.
    • Without limiting its other rights or remedies, either Party may terminate the Contract with immediate effect by giving written notice to the other Party if:
      • the other Party commits a material breach of any term of the Contract and (if such a breach is remediable) fails to remedy that breach within thirty (30) of the other Party being notified in writing to do so;
      • the other Party takes any step or action in connection with its entering administration, provisional liquidation or any composition or arrangement with its creditors (other than in relation to a solvent restructuring), obtaining a moratorium, being wound up (whether voluntarily or by order of the court, unless for the purpose of a solvent restructuring), having a receiver appointed to any of its assets or ceasing to carry on business or, if the step or action is taken in another jurisdiction, in connection with any analogous procedure in the relevant jurisdiction;
      • the other Party takes any step or action in connection with the other Party being made bankrupt, entering any composition or arrangement with its creditors, having a receiver appointed to any of its assets, or ceasing to carry on business or if the step or action is taken in another jurisdiction, in connection with any analogous procedure in the relevant jurisdiction;
      • the other Party suspends, or threatens to suspend, or ceases or threatens to cease to carry on all or a substantial part of its business; or
      • the other Party's financial position deteriorates so far as to reasonably justify the opinion that its ability to give effect to the terms of the Contract is in jeopardy.
    • On termination or expiry of the Contract, the Supplier shall immediately inform the Customer of any Customer Materials leftover, including IP/branded materials. If the Supplier fails to do so, then the Customer may enter the Supplier's premises and take possession of them. Until they have been returned or delivered in accordance with the Customer’s written instructions, the Supplier shall be solely responsible for their safe keeping and will not use them for any purpose unless otherwise instructed in writing by the Customer.
    • Termination or expiry of the Contract, however arising, shall not affect any of the parties' rights and remedies that have accrued as at termination or expiry, including the right to claim damages in respect of any breach of the Contract which existed at or before the date of termination or expiry.
    • Any provision of the Contract that expressly or by implication is intended to come into or continue in force on or after termination or expiry of the Contract shall remain in full force and effect.
14. Force majeure

14.1     Neither party shall be in breach of the Contract or otherwise liable for any failure or delay in the performance of its obligations if such delay or failure results from events, circumstances or causes beyond its reasonable control. The time for performance of such obligations shall be extended accordingly.

• The Affected Party shall:
  • as soon as reasonably practicable after the start of the Force Majeure Event but no later than 21 days from its start, notify the other party in writing of the Force Majeure Event, the date on which it started, its likely or potential duration, and the effect of the Force Majeure Event on its ability to perform any of its obligations under the agreement; and
  • use all reasonable endeavours to mitigate the effect of the Force Majeure Event on the performance of its obligations.
• If the Force Majeure Event prevents, hinders or delays the Affected Party's performance of its obligations for a continuous period of more than three (3) months the party not affected may terminate this agreement with immediate effect by giving written notice to the Affected Party.

15. General
    • Assignment and other dealings
      • The Customer may at any time assign, transfer, mortgage, charge, subcontract, delegate, declare a trust over or deal in any other manner with any or all of its rights or obligations under the Contract.
      • The Supplier may not assign, transfer, mortgage, charge, delegate, declare a trust over or deal in any other manner with any or all of its rights or obligations under the Contract without the prior written consent of the Customer.
    • The Supplier may not subcontract any or all of its rights or obligations under the Contract without the prior written consent of the Customer. If the Supplier wishes to subcontract any part of the manufacturing of the Goods, including the use of Homeworkers, they must have written permission and consent from the Customer. If the Customer consents to any subcontracting by the Supplier, the Supplier shall remain responsible for all the acts and omissions of its subcontractors as if they were its own.
    • When the Supplier acts as a buyer or in a similar capacity in its contracts with sub-suppliers or subcontractors, the Supplier shall ensure that it complies with all of the buyer responsibilities stated in this Agreement. Such responsibilities include, without limitation, sharing responsibility for HREDD, responsible purchasing practices, responsible pricing, providing reasonable assistance, establishing clear and reasonable deadlines, fair labour practices, and responsible exit.
    • Entire agreement.
      • The Contract constitutes the entire agreement between the parties.
      • Each party acknowledges that in entering into the Contract it does not rely on any statement, representation, assurance or warranty (whether made innocently or negligently) that is not set out in the Contract. Each party agrees that it shall have no claim for innocent or negligent misrepresentation [or negligent misstatement] based on any statement in the Contract.
    • Except as set out in these Conditions, no variation of the Contract, including the introduction of any additional terms and conditions, shall be effective unless it is agreed in writing and signed by the Customer.
    • • A waiver of any right or remedy is only effective if given in writing [and shall not be deemed a waiver of any subsequent right or remedy].
      • A delay or failure to exercise, or the single or partial exercise of, any right or remedy shall not waive that or any other right or remedy, nor shall it prevent or restrict the further exercise of that or any other right or remedy.
    • If any provision or part-provision of the Contract is or becomes invalid, illegal or unenforceable, it shall be deemed deleted, but that shall not affect the validity and enforceability of the rest of the Contract. If any provision of the Contract is deemed deleted under this clause 15.6 the parties shall negotiate in good faith to agree a replacement provision that, to the greatest extent possible, achieves the intended commercial result of the original provision.
    • • Any notice given to a party under or in connection with the Contract shall be in writing and shall be:
        • delivered by hand or by pre-paid first-class post or other next working day delivery service at its registered office (if a company) or its principal place of business (in any other case).
      • Any notice shall be deemed to have been received:
        • if delivered by hand, at the time the notice is left at the proper address; or
        • if sent by pre-paid first-class post or other next working day delivery service, at 9.00 am on the second Business Day after posting.
      • This clause does not apply to the service of any proceedings or other documents in any legal action or, where applicable, any arbitration or other method of dispute resolution.
    • Third party rights.

The Contract does not give rise to any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of the Contract.

• Governing law. The Contract, and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation, shall be governed by and construed in accordance with the law of England and Wales.
• Each party irrevocably agrees that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with the Contract or its subject matter or formation.

 CUSTOMER'S MANDATORY POLICIES

The Mandatory Policies are:

Code of Conduct and any other Customer’ policies notified to the Supplier from time to time.

 

Special Terms applying to Suppliers handling product made in Fair Trade Certified factories.

 

These Special Term apply only to Suppliers handling products made in Fair Trade Certified factories (the “Special Terms”).  These Special Terms are in addition to and not subtracting from the Terms set out in Part A of these Terms and Conditions of Purchase.  Notwithstanding the forgoing where there is any conflict or ambiguity between a term in the Special Terms and a term contained in Part A, the Special Terms shall have priority over the term in Part A.  All defined terms in this Part B shall have the same meaning as in Part A unless otherwise defined at the end of this Part B.

The Customer’s Fair Trade ID is: 11441446.

Special Terms:

1. Duration of Agreement

1.1    The Parties acknowledge that term of the Agreement as defined below covers a minimum of one full trading season.

1.2    The Parties acknowledge that this Agreement begins on the ‘Effective Date’ and ends on the ‘Expiration Date,’ unless terminated prior to the ‘Expiration Date’ in accordance with the conditions specified in section below titled, 'Termination.”  The Effective Date and the Expiration Date shall be sent out in the Purchase Order.

2. Fair Trade Product Price

2.1     The Parties agree that:

(a)     the value of the Fair Trade Premium shall not be considered when negotiating Fair Trade Certified product price, and producers shall not discount product price to incorporate the cost of the premium;

• the price paid for Fair Trade Certified product is at least equivalent to the relevant market price. Where there is no defined relevant market price, the price for Fair Trade product is set as negotiated between the Customer and the Supplier;

2.2.    The Parties agree that any deductions made to the agreed price as a result of quality claims or other issues such as Termination, invocation of Force Majeure, etc. will:

(a)          be clearly documented and communicated and

(b)          comply with the relevant terms and conditions set forth below.

All additional terms regarding the product price and payment not defined in this Part B are set forth in the relevant Purchase Order or a relevant Statement of Works.

 

3. Product Price Calculation and Payment Terms

3.1    The parties agree to the Fair Trade Price, the acceptable form of traceable payment, the currency, and the source of the exchange rate (if applicable) the details of which shall be set in in the format of the template set out in Part B -Schedule 1.

3.2     The Customer agrees to pay the Fair Trade Price no later than forty-five (45) days after the date of the invoice from the Supplier. Notwithstanding the foregoing, the Parties acknowledge that a fair and reasonable alternative timeline allowing up to (but no more than) ninety (90) days after the date of the invoice for payment of Fair Trade Price may be defined, justified, and agreed upon as part of this Agreement (which shall be set out in the Order Form), and as allowable by law.

3.3    The Customer agrees to document Price payments in a manner that links price payments to specific transactions of Fair Trade Certified Product, including a reference to the related product invoice(s).

4. Fair Trade Premium Payment Terms

4.1    The Parties agree that all Premium is paid in addition to product price. Any deductions to Price (e.g., for quality or delivery claims, etc.) will not affect Premium calculation, except where Fair Trade Certified Product is rejected entirely due to a quality claim. In those cases, no Premium shall be owed on that Trade Certified Product.

4.2    The Parties agree to not make any deductions from the Premium amount owed.

4.3    All additional terms regarding the Premium calculation and payment not defined in this Agreement are set forth in the Purchase Order.

4.4    Actual Premium owed for any given order is calculated as a percentage of the price of goods sourced on Fair Trade terms using the relevant information on the Purchase Order.

4.5    The Parties agree to abide by the Premium rate and leverage the pricing terms set out in Part B- Schedule 2.

4.6    The Parties acknowledge that Premium payments are to be made as soon as possible and no later than the timeline indicated set out in the format at Part B – Schedule 3.  The Parties agree to abide by the relevant Premium Payment timeline which will be indicated and set out in the format at Part B – Schedule 3

4.7    The Customer agrees to use acceptable form of traceable payment, currency, and exchange rate (if necessary) as agreed and details of which shall be set out in the format of the template set out in Part B -Schedule 3.

4.8       The Parties agree that the Customer will remit Premium Payments to:

            Applicable Fair Trade Committee bank account.

When premium payment to the Fair Trade Committee bank account is not feasible, select the applicable option from those listed below and document the rationale of the alternative arrangement in the Purchase Order:

• An alternative bank account, established on behalf of the Fair Trade Committee.
• Certificate Holder or factory bank account. Note: Factory partners operating in China and Vietnam should select this option if remitting Premium payments directly into the Certificate Holder/factory owner bank account established for the purposes of managing and distributing Premium.
• An intermediary Licensed Trader as denoted in section 0 of this Agreement as being responsible for conveying Premium. See obligations for Premium Conveyors in clause 4.8 below.

Where Premium payments are remitted directly to the Fair Trade Committee bank account, the Premium Payer agrees to notify the Certificate Holder confirming that payment has been made and linking the specific transaction to the applicable Fair Trade Certified product.

4.8     Premium Conveyor Obligations (if applicable)

4.1     This section applies to any entity responsible for conveying Premium from the Customer to the Fair Trade Committee bank account or dedicated Premium bank account. This may include intermediary Licensed Traders (e.g., exporters, importers, etc.) identified in Section 0 of this Agreement or a Certificate Holder responsible for transferring Premium to a Fair Trade Committee bank account. 

The Premium Conveyor(s) agree(s) to remit the correct amount of Premium based on the volume of product purchased on Fair Trade terms and Premium rate indicated in the  format of the template set out in Part B – Schedule 2 of this agreement without deduction.

Where Premium is remitted to a Premium Conveyor who is not a Certificate Holder, the Premium Conveyor agrees to remit Premium payments to the Certificate Holder no later than 15 days after receipt from the Premium Payer.

Where Premium is remitted to a Premium Conveyor who is either a Certificate Holder or vendor (as defined under the Factory Production Standard), the Premium Payer agrees to remit Premium payments to the Fair Trade Committee bank account or dedicated Premium bank account no later than one month after receipt.

Where Premium is remitted by a Premium Conveyor directly to a Fair Trade Committee bank account, the Premium Conveyor agrees to notify the Certificate Holder that payment has been made, and link payment to specific transactions of Fair Trade Certified product.

The Premium Conveyor agrees to use acceptable form of traceable payment, currency, and exchange rate (if necessary) as agreed details of which shall be set out in the format of the template set out in Part B -Schedule 3.

5. Terms of Trade

5.1    The Customer agrees to provide volume estimates to the Supplier and Premium Conveyer, where applicable, in the following format(s) and according to the following timeline: 

 

Volume Estimate Format
Volume Estimate Timeline

 

 

6. Product Quality Inspection and Claim Procedure

6.1       The Parties agree to abide by the product quality inspection and claim terms defined in the Purchase Order.

7. Liabilities

7.1       The Parties agree to abide by the liability terms defined in clause 9 in Part A of these Standard Terms and Conditions of Purchase and/or Purchase Order.

8. Dispute Resolution

8.1       The Parties agree to resolve disputes following the terms defined in clause 15 of Part A of these terms.

 

9.       Mutual Termination Rights

9.1    The Parties acknowledge and agree that this agreement may be terminated with six (6) months written notice under the conditions and with the exit strategies agreed between the Parties. 

9.2    Clause 9.1 will not apply where the Customer is ordering a one-off/single instance supply of Goods from the Supplier.

10. Force Majeure

10.1  The Parties agree to follow the terms on force majeure defined in clause 14 of Part A of these terms.

11. Changes to Contract

11.1  The Parties agree that, where changes to terms of payment occur, these changes must be outlined and agreed to by the Parties in writing.

11.2  Parties agree to the update of the Contract immediately upon changes to the following:

• A new Premium rate or Fair Trade Minimum Price is set by Fair Trade USA. With a new premium rate, all purchase agreements and contracts signed after the effective date will reflect the new Premium and existing purchase agreements and contracts will be honoured for the Premium amount originally agreed upon.
• A change to the bank account to which the Premium will be paid.
• Under additional conditions which shall be agreed by the Parties.

12. Acceptance

12.1  In accepting or performing the obligation of the Purchase Order, each Party acknowledges that they have read, understand, and agree to comply with the terms and conditions set forth in this Agreement. 

 

Part B Definitions

Fair Trade Certified Product:

Product that has been produced, traded, processed, transported, stored, and marketed by a producer or certified trader in accordance with the applicable Fair Trade Standard.

Fair Trade Premium (syns.: Community Development Premium, Premium):

A monetary amount paid to a group of workers, small producers and/or fishers (the Fair Trade Premium Participants) above the cost of the Fair Trade Certified product. Fair Trade Premium is paid per volume of product sold on Fair Trade terms and varies by product, quality and/or region of production. Depending upon the Standard and product, the use of the Fair Trade Premium is restricted to investment in the producers’ business and livelihood, to the socio-economic development of the producers and/or workers and their community, and/or for environmental improvements. The use of the Fair Trade Premium is democratically decided by the producers, fishers and/or workers, as specified in the relevant standard.

Fair Trade Price:

For entities in the Factory Trade program, the fair trade price is typical market price for equivalent products. It is generally the price negotiated between the buyer and supplier, where there is no defined reference price.