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Terms and Conditions of Purchase

ROYAL ADHESIVES AND SEALANTS, LLC – NORTH AMERICAN OPERATIONS

1. TERMS OF AGREEMENT
The purchase order, together with these Terms and Conditions of Purchase, and any attachments and exhibits, specifications, drawings, notes, instructions and other information, whether physically attached or incorporated by reference (collectively the “Purchase Order”), constitutes the entire and exclusive agreement between ROYAL and the supplier (the “Supplier”) identified in the Purchase Order. By accepting this Purchase Order, the Supplier agrees to the terms and conditions set forth in this document.

2. DEFINITIONS
2.1 “Delivery Date” means the date or dates specified in the Purchase Order by which the Supplier is required to deliver the Work.
2.2 “Product” means tangible goods specified the Purchase Order to be delivered on or before the Delivery Date.
2.3 “Services” means the services that Supplier is to perform for ROYAL specified in the Purchase Order.
2.4 “Work” means the Products and Services specified in the Purchase Order, including any document specifying, without limitation, the scope, objective, and time frame of the Work that Supplier will perform for ROYAL.

3. DELIVERY
3.1 Delivery of Products or completion of Services on time is essential in Supplier’s performance of its obligations. Supplier will immediately notify ROYAL if Supplier’s timely performance under the Purchase Order is delayed or is likely to be delayed. ROYAL’s acceptance of Supplier’s notice will not constitute ROYAL’s waiver of any of Supplier’s obligations.
3.2 If Supplier delivers Work after the Delivery Date, ROYAL may reject such Work.
3.3 ROYAL will hold any Work rejected under this Purchase Order at Supplier’s risk and expense, including storage charges, while awaiting Supplier’s return shipping instructions. Supplier will bear all return shipping charges, including without limitation, insurance charges ROYAL incurs on Supplier’s behalf.
3.4 Supplier will preserve, pack, package and handle the Products and Work to protect them from loss or damage and in accordance with best commercial practices in the absence of any specifications ROYAL may provide. Without limiting the foregoing, Supplier shall observe the requirements of any local laws and regulations relating to hazardous Work, including, without limitation, with respect to its accompanying information, packing, labeling, reporting, carriage and disposal.
3.5 Supplier will include with each delivery of Products a certificate of analysis (if required), a packing list identifying the Purchase Order number, the ROYAL part number for each of the Products (if applicable), a description and the quantity of each of the Products, and the date of shipment.
3.6 Services that are delayed due to any reason caused by Supplier or Supplier’s sources are subject to a fee in the amount of 1% of the total value of the Purchase Order for each week of the delay in accordance with the delivery date on the Purchase Order, which ROYAL at its own discretion may enforce by deducting this amount from the payment.
3.7 Unless ROYAL expressly instructs otherwise, Supplier will deliver all Work to ROYAL’s plant at the address set forth in the Purchase Order. Supplier assumes responsibility for all shipping and delivery charges including, without limitation, customs, duties, costs, taxes and insurance unless otherwise specified on the Purchase Order.

4. PRICE AND PAYMENT
4.1 Unless otherwise specified in the Purchase Order, the price for the Work includes all taxes and other charges such as shipping and delivery charges, duties, customs, tariffs, imposts and government-imposed surcharges. Supplier will break-out from the price all such taxes and other charges, in its invoices. Supplier shall use its best efforts to assist ROYAL in all legal efforts to minimize the taxes resulting from the performance of this Purchase Order.
4.2 ROYAL will pay Supplier the price set forth in the Purchase Order according to terms negotiated between ROYAL and Supplier following the later of: (i) the Delivery Date; (ii) the date of ROYAL’s acceptance of all of the Work; or (iii) ROYAL’s receipt of a properly prepared invoice. A properly prepared invoice must include the Purchase Order number. Payment will be made in US dollars.  ROYAL may, at any time, set-off any amounts Supplier owes ROYAL against any amounts ROYAL owes to Supplier.

5. REPRESENTATIONS AND WARRANTIES
5.1 Supplier acknowledges and understands that Royal relies on Supplier to provide Product and Services that comply in each and all particulars with Supplier’s representations, specifications, industry standards and qualification samples approved by ROYAL.  Supplier expressly warrants that all Product or Services furnished under this Purchase Order shall conform to all such representations, specifications, appropriate standards and qualification samples, will be new, and will be free from defects in material or workmanship; that all such Product or Services will conform to any statements made on the containers or labels or advertisements for such Product or Services, and that any Product will be adequately contained, packaged, marked, and labeled, and that it has the full power to enter into the Purchase Order and to perform its obligations under the Purchase Order.
5.2 Supplier warrants that all Product or Services furnished hereunder will be merchantable, and will be safe and appropriate for the purpose for which Product or Services of that kind are normally used.  If Supplier knows or has reason to know the particular purpose for which Royal intends to use the Product or Services, Supplier warrants that such Product or Services will be fit for such particular purpose. Supplier warrants that Product or Services furnished will conform in all respects to samples.
5.3 Inspection, test, acceptance or use of the Products or Services furnished hereunder shall not affect the Supplier's obligation under this warranty, and such warranties shall survive inspection, test, acceptance and use.  Supplier's warranty shall run to Royal, its successors, assigns and customers, and users of products sold by Royal.
5.4 Supplier agrees to replace or correct defects of any Product or Services not conforming to the foregoing warranty promptly, without expense to Royal, when notified of such nonconformity by Royal, provided Royal elects to provide Supplier with the opportunity to do so.  If Supplier fails to correct defects in or replace nonconforming Product or Services promptly, Royal, after reasonable notice to Supplier, may make such corrections or replace such Product and Services and charge Supplier for the cost incurred by Royal in doing so.  Supplier agrees to reimburse Royal for all costs and expenses incurred from the use of any Product or Services not conforming to the foregoing warranty does not conform to one or more of the warranties of this Section 5, and is processed and results in additional damages beyond the value of the goods received, Supplier agrees to reimburse Royal for any loss in product and time relating to the use of the nonconforming products.
5.5 Supplier represents and warrants that the goods or services furnished hereunder (including all labels, packages and containers for said goods) comply with a) all applicable standards. rules and regulations in effect under the a) Occupational Safety and Health Act of 1970 with respect to design construction, manufacture or use for their intended purpose of said goods or services, b) all applicable requirements of Sections 6, 7 and 12 of the Fair Labor Standards Act of 1938. as amended, and of regulations and orders of the Department of Labor issued under Section 14 thereof, and c) all applicable local and national laws and regulations pertaining to its performance of its obligations under this Purchase Order, including, without limitation, all applicable human rights laws, and the California Transparency in Supply Chains Act of 2010, S.B. 657.
5.6 The Supplier represents and warrants that the Products are manufactured and provided to Buyer in a manner that complies with the provisions of Section 1502 of the Dodd-Frank Act (conflict minerals rules). Supplier further represents that the goods are conflict mineral-free, meaning any gold, tin, tantalum, or tungsten contained in the goods are sourced only from conflict – free zones, sources, and smelters. Supplier agrees to cooperate and fulfill related due diligence activities with its suppliers or represents that it has already done so
5.7 Supplier represents and warrants that all chemical substances purchased by Royal is on the Inventory of Chemical Substance compiled and published by the Environmental Protection Agency under the Toxic Substances Control Act. 
5.8 Supplier represents and warrants that it has not violated, and will not violate any “Anti-Corruption Laws” which means, both collectively and separately, any anti-corruption, anti-bribery or similar governmental ethics and transparency laws that have particular jurisdiction or that govern the scope of this Purchase Order in any manner.  Although Supplier is responsible for determining the extent and applicability of Anti-Corruption Laws, the US Foreign Corrupt Practices Act of 1977 (the “FCPA”) and the UK Bribery Act 2010 are both expressly included in the scope of “Anti-Corruption Laws” regardless of Supplier’s actual residency or the actual location that services are performed and received or that goods are made, delivered and received under the Purchase Order
5.9 The Equal Opportunity Clause of Section 1.4 of the Rules and Regulations of the Office of Federal Contract Compliance Programs related to Executive Order 11246, the Affirmative Action Clause of Section 741.4 of the rules and Regulations of the Office of Federal Contract Compliance Programs related to Affirmative Action Programs for Handicapped Persons, and the Affirmative Action Clause of Section 250.1 of the Rules and Regulations of the Office of Federal Contract Compliance Programs related to Affirmative Action Regulations for Veterans of the Vietnam Era are hereby incorporated by reference.

6. INSPECTION AND ACCEPTANCE
6.1 Payment for the Work delivered hereunder shall not constitute acceptance of such Work. Royal shall have the right to inspect such Work and to reject any or all of said Work which are in Royal's judgment defective or nonconforming. At ROYAL’s option, ROYAL may (i) return the non-conforming Work to Supplier for a refund or credit; (ii) require Supplier to replace the non-conforming Work; or (iii) repair the non-conforming Work so that it meets the requirements. Product rejected and Product supplied in excess of quantities called for herein may be returned to Supplier at its expense and, in addition to Royal's other rights, Royal may charge Supplier all expenses of unpacking, examining, repacking and reshipping such Product.  If Royal receives Product whose defects or nonconformities are not apparent on examination, Royal reserves the right to require replacement, as well as payment of damages.   Nothing contained in this Purchase Order shall relieve in any way the Supplier from the obligation of testing, inspection and quality control.
6.2  All Work must comply with relative ROYAL purchasing specifications and/or vendor’s product specifications.  Any changes to processes, procedures, raw materials, controls, etc., that could have an adverse effect on the purchased material’s performance or usage at ROYAL needs to be communicated to ROYAL prior to said changes being implemented.

7. TERM AND TERMINATION.
7.1 ROYAL in its sole discretion and for its convenience, may cancel an order for Work, in whole or in part, at any time with written notice to the Supplier, stating the extent and effective date of the termination.  Upon receipt of this written notice, Supplier shall immediately stop all work hereunder, and shall immediately cause any of its suppliers or subcontractors to cease such work.  If so terminated, Supplier will collect and deliver to ROYAL whatever Work has been then completed.  Supplier shall take all actions necessary to avoid and mitigate the costs and expenses it incurs in relation to the termination.  If terminated at ROYAL’s sole discretion ROYAL will pay Supplier for all Work performed and accepted through the effective date of the termination, and Supplier’s cost of materials purchased specifically to perform under this Purchase Order that which cannot reasonably be used by Supplier in producing supplies for itself or for its other customers.  Within 60 days after receipt of a termination notice, Supplier shall submit its claim for amounts due to Supplier; provided that Royal shall have the right to verify the claim by auditing all relevant records.  ROYAL will have no further payment obligation in connection with any termination.  Supplier shall not be paid for any work done after receipt of the notice of termination, nor for any costs incurred by Supplier's suppliers or subcontractors which Supplier could reasonably have avoided, reused or otherwise disposed of commercially. 
7.2 Royal may also terminate this Purchase Order or any part hereof for cause in the event of any default by the Supplier or if the Supplier fails to comply with any of the terms and conditions of this offer.   Late deliveries, deliveries of products which are defective or which do not conform to this order, and failure to provide Royal, upon request, of reasonable assurances of future performance shall all be causes allowing Royal to terminate this Purchase Order for cause.  In the event of termination for cause, Royal shall not be liable to Supplier for any amount, and Supplier shall be liable to Royal for any and all damages sustained by reason of the default which gave rise to the termination.

8. CONFIDENTIAL INFORMATION AND PUBLICITY
8.1 Supplier shall consider all information furnished by Royal to be confidential and shall not disclose any such information to any other person, or use such information itself for any purpose other than performing this contract, unless Supplier obtains written permission from Royal to do so.  This paragraph shall apply to drawings, specifications, or other documents prepared by Supplier for Royal in connection with this order.
8.2 If ROYAL and Supplier have entered into a Non-Disclosure Agreement (“NDA”) which covers disclosure of confidential information under the Purchase Order, and if the term of the NDA expires before the expiration or termination of the Purchase Order, then the term of the NDA shall be automatically extended to match the term of the Purchase Order.  The parties shall treat the terms, conditions, and existence of the Purchase Order as Confidential Information as defined in the NDA.
8.3 Supplier shall not advertise or publish the fact that Royal has contracted to purchase Work from Supplier, nor shall any information relating to the order be disclosed without Royal's written permission.  Supplier shall obtain ROYAL’s written consent prior to any publication, presentation, public announcement, or press release concerning its relationship as a supplier to ROYAL.

9. INDEMNIFICATION
Supplier shall defend, indemnify and hold ROYAL harmless from and against any and all claims, demands, losses, damages, liabilities, costs or expenses (including professional fees and costs) as incurred, arising out of or in connection with any (i) act or omission of Supplier (including its agents, employees, suppliers or subcontractors) in the performance of the Work; or (ii) any defect in the Product or Services purchased hereunder; or (iii) any infringement of a third party’s Intellectual Property Rights or any other rights.

10. LIABILITY
NOTWITHSTANDING ANYTHING CONTAINED IN THIS CONTRACT TO THE CONTRARY, SUPPLIER WILL INDEMNIFY, DEFEND AND HOLD HARMLESS ROYAL AND ROYAL’S PARENTS, AFFILIATES AND SUBSIDIARIES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS (“ROYAL INDEMNITEES”) FROM AND AGAINST ANY AND ALL NON-AFFILIATED THIRD PARTY CLAIMS, LIABILITY OR EXPENSE, INCLUDING, WITHOUT LIMITATION, ALL REASONABLE COURT COSTS AND ATTORNEYS FEES INCURRED WITH RESPECT THERETO, (“THIRD PARTY CLAIMS”) ARISING FROM, BASED UPON OR OTHERWISE ATTRIBUTABLE TO PRODUCT OR SERVICES FOR (i) PERSONAL INJURY, ILLNESS OR DEATH OF ANY PERSON, INCLUDING, WITHOUT LIMITATION, INJURY, ILLNESS OR DEATH TO SUPPLIER’S OR ROYAL’S EMPLOYEES; OR (ii) DAMAGE TO REAL OR PERSONAL PROPERTY THAT ARISE OUT OF, ARE CONNECTED WITH, OR RELATE IN ANY WAY TO THE PRODUCT (INCLUDING, WITHOUT LIMITATION, RECEIPT, POSSESSION, USE, HANDLING, STORAGE, PROCESSING, DISPOSAL, RESALE AND/OR RETRANSFER OF THE PRODUCT OR USE OF ANY MATERIAL MADE BY ROYAL THAT INCORPORATES PRODUCT AND IS SOLD TO A THIRD PARTY). SUCH INDEMNIFICATION AND OBLIGATION TO DEFEND SHALL APPLY WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF, INCLUDING WITHOUT LIMITATION, CONTRACT, STRICT LIABILITY, OR THE NEGLIGENCE OF A ROYAL INDEMNITEE, WHETHER SUCH NEGLIGENCE BE JOINT, CONCURRENT, ACTIVE OR PASSIVE; PROVIDED, HOWEVER, THAT SUPPLIER SHALL HAVE NO OBLIGATION OF INDEMNIFICATION OR DEFENSE IN THE EVENT THAT THE THIRD PARTY CLAIM IS THE RESULT OF THE SOLE NEGLIGENCE OR WILLFUL MISCONDUCT OF ROYAL.

11. INSURANCE
Supplier will secure and maintain insurance providing coverage for liabilities to third parties for bodily injury (personal injury) and damage to property in amounts sufficient to protect ROYAL in the event of such injury or damage, and will be in compliance with any and all laws, regulations or orders addressing the liabilities of an employer to its employees for injuries and disease suffered in connection with employment.  Supplier further will maintain such additional types and limits of insurance as is customary for a company of similar size and similar operations to Supplier in the jurisdiction or jurisdictions in which Supplier’s operations take place.

12. COMPLIANCE WITH LAWS.
The laws of the State of Indiana shall govern this Purchase Order and the rights and the obligations of the parties hereunder, and the venue of any action brought hereunder shall be in the Superior Court, St. Joseph County, State of Indiana. 

13. FORCE MAJEURE.
Royal may delay delivery or acceptance occasioned by causes beyond its control. Supplier shall hold such Work at the direction of the Royal and shall deliver them when the cause affecting the delay has been removed. Royal shall be responsible only for Supplier's direct additional costs in holding the Work or delaying performance of this agreement at Royal's request.  Causes beyond Royal's control shall include government action or failure of the government to act where such action is required, strike or other labor trouble, fire, or unusually severe weather.

 

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