QN-022
Termination for Default
Subject to paragraphs 3 and 4 below, Buyer may terminate the Order for default in whole or in part, by written notice of default to Supplier if Supplier:
Fails to deliver the Products or to perform the Services within the time specified in this Order or any extension; Fails to make progress so as to endanger performance of the Order or to perform any of the other provisions of the Order and does not cure that failure within a period of ten (10) days after receipt of the notice from Buyer specifying Supplier’s failure to perform; or
Becomes insolvent or makes a general assignment for the benefit of creditors, or files or has filed against it a petition of bankruptcy or pursues any other remedy under any other law relating to the relief for debtors, or in the event a trustee or receiver is appointed for Supplier’s property or business; or assignment.
- If Buyer terminates the Order in whole or in part, it may acquire, under the terms and in the manner Buyer considers appropriate, Products or Services similar to those terminated, and Supplier will be liable to Buyer for any excess costs for those Products or Services. However, Supplier shall continue the work not terminated. In addition, Buyer may rework or repair any Product or re-perform any Service, at Supplier’s cost.
- If the failure to perform is caused by the default of a subcontractor of Supplier at any tier, and if the cause of the default is beyond the control of both Supplier and subcontractor, and without the fault or negligence of either, Supplier shall not be liable for any excess costs for failure to perform, unless the subcontracted Products or Services were obtainable from other sources in sufficient time for Supplier to meet the required delivery schedule.
- If the Order is terminated for default, Buyer may require Supplier to transfer title and deliver to Buyer, as directed by Buyer, any (i) completed Products, and (ii) partially completed Products and materials, parts, tools, dies, jigs, fixtures, plans, drawings, information, and (iii) contract rights (collectively referred to as “Manufacturing Materials” in this clause) that Supplier has specifically produced or acquired for the terminated portion of the Order. Upon direction of Buyer, Supplier shall also protect and preserve property in its possession in which Buyer has an interest.
- Buyer shall pay the Order price for completed Products delivered or Services performed and accepted. Supplier and Buyer shall agree on the amount of payment for Manufacturing Materials delivered and accepted and for the protection and preservation of the property.
- Buyer shall, at its option, have the right to set off against, or appropriate and apply to the payment or performance of any obligation, sum or amount owing at any time to Buyer under the Order, all deposits, amounts, or balances held by Buyer for the account of Supplier, any amounts owed by Buyer to Supplier, and any sum Buyer determines to be necessary to protect Buyer against loss because of outstanding liens or claims of former lien holders.
- The rights and remedies of Buyer in this clause are in addition to any other rights and remedies provided by law or under the Order.
