CUSTOM PACKS GENERAL
TERMS AND CONDITIONS
PLEASE READ THE GENERAL TERMS CAREFULLY AS THEY CONTAIN IMPORTANT INFORMATION REGARDING YOUR LEGAL RIGHTS, REMEDIES AND OBLIGATIONS. THESE INCLUDE VARIOUS DISCLAIMERS, LIMITATIONS AND EXCLUSIONS.
ALL CUSTOM PACK ORDERS ARE SUBJECT TO THE CUSTOM PACKS GENERAL TERMS AND CONDITIONS (“GENERAL TERMS”) SET FORTH HEREIN. Capitalized terms not defined specifically herein shall have the meaning ascribed to them in the Custom Pack Agreement. Except as herein provided, all of the terms and conditions in the Custom Pack Agreement remain unchanged and effective and are hereby reaffirmed.
1. OFFERS, CONFIRMATION, AGREEMENT. Offers by Cardinal Health are open for acceptance within thirty (30) days from the date of the Offer, provided that Cardinal Health may amend, withdraw or revoke any offer at any time prior to the receipt by Cardinal Health of the acceptance of an offer. No order submitted by Customer will be deemed final or accepted by Cardinal Health unless and until confirmed by Cardinal Health. As used herein, “Agreement” means any written contract for supply, distribution, sale, or license of any Custom Packs entered into between Cardinal Health and Customer, or any purchase order that is issued by Customer and accepted by Cardinal Health; and “Offer” means any quotation, proposal or offer provided to Customer by Cardinal Health.
2. FORECAST. It is important to maintain a regular ordering pattern of the Custom Packs in order to prevent or avoid a backorder or excess inventory situation. For planning purposes, Cardinal Health requires a regular forecast from Customer for each Custom Packs (each, a “Forecast”), and Cardinal Health shall be able to rely on such Forecast from the Customer. Customer must provide at least three (3) months’ prior notice to Cardinal Health for any material changes to the Forecast for the Custom Packs. In the event a Custom Pack becomes non-moving or slow-moving, Cardinal Health reserves the right, in its sole discretion, to remove such Custom Pack from a regular Forecast category to a de-stat category. Cardinal Health shall rely upon the Forecast Class Guide below to categorize and manage the Custom Packs according to the Forecast Class Guide. If a Custom Pack belongs to (i) the “regular Forecast category”, Cardinal Health will manufacture an initial stocking quantity of three (3) month’s inventory, and subsequently keep thirty (30) DIOH with continuous replenishment based on customer usage, with a minimum requirement of one (1) case per month for the Custom Pack to remain in active status; (ii) the “made-to-order category”, Cardinal Health will manufacture the exact quantity of such Custom Packs when Customer places an order with Cardinal Health, and Cardinal Health shall not be obligated to produce any excess inventory for such Custom Packs; or (iii) the “de-stat category”, Cardinal Health will only retain the product code for such Custom Packs in its system but the product code will display as a discontinued item.
3. PAYMENT AND INVOICING TERM. Cardinal Health may require Customer to (i) make net payment within thirty (30) days of date of invoice to the designated bank account of Cardinal Health; or (ii) make an advance payment of (all or part of) the Price. Customer shall pay all amounts due to Cardinal Health in full without any set-off, counterclaim, deduction or (tax) withholding. Invoices not paid according to Cardinal Health terms of sale are subject to a late payment charge of 1.50% per month (18% per annum) or the highest amount allowed by law, if lower. Any portion of an invoice that is disputed must be explained to determine whether credit is due. To expedite resolution of Customer’s dispute, please enclose a copy of disputed invoice along with Customer’s remittance. Fees and costs, including but not limited to, collection agencies fees and legal fees, incurred by Cardinal Health in connection with collection of any invoices that are in arrears shall be the responsibility of Customer. Unless otherwise agreed by Cardinal Health, cheques or Electronic Funds Transfer (EFT) will be the acceptable forms of payment for Cardinal Health. Any payment to Cardinal Health by method of credit or charge card may be subject to a processing fee, as reasonably determined by Cardinal Health in its sole discretion, added to the invoice and charged at the time of processing.
4. DELIVERY TERMS. Unless agreed otherwise, Custom Packs will be delivered DAP destination (INCOTERMS latest version), pre-paid by Cardinal Health’s private truck or common ground carrier as determined by Cardinal Health in its sole discretion. Cardinal Health reserves the right to apply a shipment charge in the event that the Customer requests a means of transportation that differs from the mode of transportation selected by Cardinal Health. In such event, Customer will assume responsibility for any freight costs and any risk of loss in transport. Custom Pack orders where a combination of freight rates apply (more than one freight rate applies between origin and destination) will be shipped DAP the first transfer point freight prepaid and collect beyond. Dates communicated or acknowledged by Cardinal Health are approximate only, and Cardinal Health will not be liable for, nor will Cardinal Health be in breach of its obligations to Customer, for any delay in delivery or performance, provided that Cardinal Health shall use commercially reasonable efforts to meet such dates. In the event of delay, Cardinal Health shall use commercially reasonable efforts to deliver Custom Packs within a period that is reasonably needed given the cause of the delay, failing which Customer’s sole and exclusive remedy will be to cancel the purchase order for undelivered Custom Packs.
5. NON-CANCELLABLE & NON-RETURNABLE. No purchase order for any Custom Pack is cancellable, and no Custom Packs are returnable by Customer unless otherwise eligible to be returned in accordance with the terms and conditions of the Return Goods Policy (as defined in the Cardinal Health Standard Sales Terms and Conditions).
6. CHANGE IN SPECIFICATION. Cardinal Health will continuously monitor the inventory of component products required for the production of Custom Packs to meet the requirements of the Customer, however, Cardinal Health may request modifications or changes to the specifications for the Custom Pack due to a shortage or anticipated shortage, discontinuation, and/or recall of a component product or products for the Custom Pack. In such event, Cardinal Health will work with the Customer to minimize any impact on disruption of supply of Custom Packs to the Customer, and Cardinal Health shall have the right to:
(a) manufacture a Custom Pack without the unavailable component product (“Run Without”); or
(b) provide a substitute component product for the Custom Pack, until the original component product is again available for use.
All Run Without or substitution communication between Cardinal Health and Customer shall be in writing by electronic or other means as mutually agreed. Cardinal Health agrees to automatically substitute backordered component products where (i) a substitute has been identified by Cardinal Health as an exact match, or (ii) a substitute has been previously identified and approved in writing by the Customer and will notify the Customer prior to shipping. Cardinal Health will contact the Customer for a written substitution approval only when there is no exact match or substitute component product on file with Cardinal Health and will notify the Customer by electronic means prior to shipping the Custom Pack, when available. Customer will have forty-eight (48) hours to advise/confirm its preferred substitute component product upon receiving Cardinal Health’s notice that a certain component product will be missing from a Custom Pack production run. In the event the Customer fails to reply or if there is no substitute component product available, Cardinal Health reserves the right to (i) produce the Custom Pack run as a Run Without (after forty-eight (48) hours or permanently remove the component from the pack (version roll) (after thirty (30) days)) and decrease the price according to the value of the missing component product, or (ii) produce the Custom Pack with a substitute component product that Cardinal Health deems appropriate. Cardinal Health reserves the right to adjust Prices for Custom Packs not yet delivered if Cardinal Health’s cost to manufacture or supply the Custom Pack(s) increases due to an increase in the cost of raw materials, governmental action, a force majeure event, or any other event beyond Cardinal Health’s reasonable control that causes the cost of the product, distribution services, or combination thereof to increase (an “Extraordinary Event”), then Cardinal Health will have the right to (i) increase the price of such custom packs or adjust the invoice in any other appropriate manner by an amount equal to the cost increase resulting from such Extraordinary Event on the invoice for the Custom Pack; or (ii) remove such Custom Pack from the Custom Pack Agreement.
All Run Without and/or Custom Packs with substituted component product are to be used only until the original Custom Pack is available from Cardinal Health and the Run Without and/or Custom Packs with substituted component product has run out. Cardinal Health will advise the Customer when the original Custom Pack is to replace the Run Without and/or Custom Packs with substituted component product.
In the event a component product replacement of within Custom Pack is mandated by law, or necessitated by a safety concern, a twenty-four (24) hours’ notice shall be sufficient to effect the change in such Custom Pack. The parties will in good faith negotiate an equitable adjustment to the Price of any changes or modifications to the Custom Pack, where applicable.
7. END OF TERM PURCHASE RESTRICTIONS. Cardinal Health shall not be obligated to supply to Customer a quantity of Custom Packs exceeding that which was forecasted for such final three (3) month period (“Notification Period”) by Customer as of the notification date of such non-renewal or termination of the Custom Pack Agreement; provided, however, that Cardinal Health shall have no obligation to supply any Custom Packs to Customer in the event the Custom Pack Agreement is terminated for cause. Customer must take delivery of all Custom Pack ordered during the Notification Period by no later than the effective date of termination or expiration of the Custom Pack Agreement. Upon termination or expiration of the Agreement, the Customer must agree to accept and pay for ninety (90) days inventory that may consist of any remaining inventory of Custom Packs, including (i) completed Custom Packs, (ii) Custom Packs in progress and (iii) component products allocated for the Custom Packs (collectively, “Remaining Inventories”). If Customer does not purchase in accordance with the foregoing sentence, Cardinal Health shall invoice Customer for the dollar value of such Remaining Inventories. It should be noted that low volume Custom Packs are manufactured in minimum lot size of 10 eaches, and may result in a purchase requirement of inventory greater than ninety (90) days upon the termination or expiration of this Agreement.
8. LIABILITY ON TERMINATION OR EXPIRATION. Cardinal Health will not by reason of the expiration or termination of the Custom Pack Agreement be liable to Customer for compensation, reimbursement, or damages on account of any loss of prospective profits or anticipated savings, or on account of expenditures, investments, or commitments made in connection with the Custom Pack Agreement or the anticipation of terms extended hereunder. Upon the expiration or termination of the Custom Pack Agreement, Customer shall be responsible and make timely payment for: (a) any Customer Pack maintained in inventory by Cardinal Health pursuant to Section 7 (Minimum Inventory Level) of these General Terms; (b) the reasonable cost of materials purchased by Cardinal Health in support of the demand forecasted under the current forecast; provided, however, that Customer shall not be responsible for the reasonable cost of materials for (i) any materials in excess of the supply necessary to support such forecast unless such excess supply was specifically authorized by Customer, (ii) any materials that are returnable to the supplier or are damaged; and (c) any cancellation charges, restocking charges and any other non-cancelable commitments incurred by Cardinal Health in support of such forecast. Except as provided by this Section, the expiration or termination of the Custom Pack Agreement shall not otherwise affect the rights or obligations of the parties which have accrued prior to the effective date of the termination or expiration of such Custom Pack Agreement.
9. MINIMUM INVENTORY LEVEL. Cardinal Health will use commercially reasonable efforts to maintain in inventory available for sale to Customer a dedicated quantity of Custom Packs of 30 days inventory of the average (mean) monthly quantity of such Custom Packs forecasted by Customer during then-current forecast period (“Minimum Inventory Level”). The Minimum Inventory Level may consist of Custom Packs that are of various versions, including but not limited to, Run-Without and/or packs that contains substituted component products. In the event that Cardinal Health does not have the Minimum Inventory Level available during any month or believes, in its good faith judgment, that it will not have the Minimum Inventory Level available in any month, then it shall promptly inform Customer. Customer understands and acknowledges that any Custom Pack quantities requested in excess of the Minimum Inventory Level are subject to Custom Pack availability and Cardinal Health’s standard product lead-time. Cardinal Health will use commercially reasonable efforts to supply any Custom Pack quantity which exceeds the demand for the forecasted period, but is in no way obligated to, or liable for any failure, supply such excess demand.
Cardinal Health will endeavour to manufacture Custom Packs containing components with an expiry date of 9 month or more from the date of assembly. In the event, a component expires: (i) in 6 to 9months, a representative from the Cardinal Health Presource® sales operations team (SOR) will solicit the Customer’s approval prior to including such component in the Custom Pack; or (ii) in 3 to 6 months, Cardinal Health’s Quality department will review and assess whether such component may be used, and if it determines that the component may be used, Cardinal Health SOR will solicit Customer’s approval prior to including such component in the Custom Pack. No component will be used if it will expire in less than 3 months, and in such event, Cardinal Health reserves the right to discard such component and consider it unusable. Customer can choose to discard, at its own risk, the expiring component from the Custom Pack at their own facility and relabel the Custom Packs with the next available component expiry date. Cardinal Health will not be responsible or liable for such relabeling and subsequent events following this process. Cardinal Health SOR can provide the next available component expiry date to the Customer but only after the date the Custom Pack is manufactured.
10. NO-DEMAND OR NON-MOVING. Each Custom Pack is a unique product packaged specifically for Customer at Customer’s request that Cardinal Health would not otherwise stock and manufactured on a continuous production model, and as such the Customer acknowledges and agrees that any deviation in its ordering date or quantities may result in subsequent inventory management issues, including but not limited to, sudden backorders of a specific Custom Pack or excess inventory on hand from artificially inflated forecasts after an erratic ordering pattern (collectively, the “Snowball Effect”). In effort to avoid such Snowball Effect, Cardinal Health requires ninety (90) days advance notice from Customer to decrease or increase the quantities of the Custom Packs manufactured specifically for Customer, and the Customer agrees to purchase all of the manufactured Custom Packs under the terms hereof upon termination of the Custom Pack Agreement for any reason, or upon notice from Cardinal Health for “no-demand” or “non-moving” Custom Packs.
If a Custom Pack is determined to be in “no-demand” or “non-moving” for a period of time, and/or a Custom Pack has expired (or about to be expired) due to “no-demand” or “non-moving”, the Customer will purchase all such Custom Packs upon notice by Cardinal Health. Cardinal Health will notify the Customer twice if a Custom Pack will expire: (i) 6 to 9 months prior to the expiry date, and (ii) 1 to 2 months prior to the expiry date, before Cardinal Health places an “inventory hold” on the Custom Pack inventories. Upon receiving Cardinal Health notice, Customer will issue a purchase order and commit to purchase all such inventory from Cardinal Health, and/or will either permit Cardinal Health to (i) dispose or (ii) ship to Customer’s facility, such Custom Pack inventories no later than 30 days prior to the expiry date. All expenses or costs associated with the disposal or shipment of the expired Custom Packs shall be the responsibility of the Customer. As used herein, (i) a Custom Pack is considered to be in “no-demand” when no order has been placed by the Customer for the Custom Pack in 3 months; and (ii) when the no-demand for a Custom Pack lasts for more than 6 months, it will be determined to be “non-moving” and will be listed by Cardinal Health under the de-stat category.
11. UNIQUE COMPONENTS. If Cardinal Health stocks (a) components made, altered or packaged specifically for the Customer, (b) components from suppliers or manufacturers with whom Cardinal Health does not have a distribution agreement, or (c) other specific or unique components at Customer’s request that Cardinal Health would not otherwise stock (collectively, the “Unique Components”), Customer will purchase all of the Unique Components under the terms hereof (i) before it purchases substitute components in place of such Unique Components; and (ii) upon termination or expiration of the Custom Pack Agreement for any reason.
12. RIGHTS IN PRODUCTS. Customer hereby acknowledges that it shall not by virtue of these General Terms or the Custom Pack Agreement, implication, estoppel, or otherwise, acquire any intellectual property rights with respect to the Custom Packs or improvements thereto and that all such rights are, and shall remain, vested in Cardinal Health. All improvements to Custom Packs and any new Custom Pack developed or Custom Pack modifications made to satisfy customer requirements or in response to suggestions put forth by Customer shall belong exclusively to Cardinal Health. These General Terms or the Custom Pack Agreement will not in any way serve to prevent Cardinal Health from performing similar design services or supplying similar product to other parties. Nothing herein shall be deemed to preclude or prohibit Cardinal Health from independently developing for itself, or for others, anything whether in tangible or intangible form, which is competitive with or similar to the Custom Packs. Additionally, Cardinal Health is free to use its general knowledge, skills and experience, and any ideas concepts, know-how and techniques that are acquired or used in the course of performing its obligations hereunder or in connection with the Custom Packs, provided no non-public design or prototype information of Customer is disclosed in violation of these General Terms and/or the Custom Pack Agreement. To the extent that Customer provides to Cardinal Health any designs, technical documentation, specifications, performance criteria, Customer represents and warrants that it is has full right and authority to provide all such material to Cardinal Health.
13. INDEMNIFICATION. Customer shall indemnify, defend and hold harmless Cardinal Health, its officers, directors, shareholders, affiliates, subsidiaries, employees, agents and other representatives (the “Indemnified Parties”) from and against any and all claims, actions, suits, demands, damages, liabilities, obligations, losses, fees, penalties, fines and other expenses of any type whatsoever, whether consequential, direct or indirect, foreseeable or not foreseeable, punitive or otherwise, including, without limitation, legal fees and court costs arising therefrom or related thereto or arising from Customer’s refusal or failure to comply with its obligations (“Damages”) under this indemnity caused by, arising from or in any way related to Damage to or loss of any real or personal property or the death of or bodily injury to any person, or the breach or violation of any provision of these General Terms and/or the Custom Pack Agreement by Customer, its officers, directors, shareholders (or members or partners, if applicable), affiliates, subsidiaries, subcontractors, employees, agents and other representatives, or the violation or breach of any law or duty applicable to these General Terms or the Custom Pack Agreement, or Customer’s performance hereunder, or arising from or in any way related to Customer’s performance under these General Terms or the Custom Pack Agreement, except to the extent caused by the gross negligence or willful misconduct of the Indemnified Parties.
14. MISCELLANEOUS.
- Except as expressly modified hereby, all purchases by Customer of any Custom Packs shall be exclusively governed and controlled by Cardinal Health’s Standard Sales Terms and Conditions, as may be modified by Cardinal Health from time to time. To the extent there is an express conflict or other between the terms and conditions of these General Terms and the Cardinal Health Standard Sales Terms and Conditions (https://www.cardinalhealth.ca/en/sales-terms-and-conditions/), the terms and conditions of these General Terms shall govern and control.
- These General Terms or the Custom Pack Agreement does not make either party the employee, agent, or legal representative of the other for any purpose whatsoever. Neither party is granted any right or authority to assume or create any obligation or responsibility, express or implied, on behalf or in the name of the other party. In fulfilling its obligations pursuant to these General Terms or the Custom Pack Agreement, each party shall be acting as an independent contractor. No partnership or joint venture arrangement arises between the parties as a result of these General Terms or the Custom Pack Agreement.
- The parties agree that these General Terms, or any claim, dispute or controversy (whether in contract, tort, or otherwise) between Customer and Cardinal Health (including any of their affiliates) arising from or relating to these General Terms shall be governed by the laws of the Province of Ontario without regard to its conflict of law rules. In no event will either party be liable to the other, or any third party, under any theory of liability for any indirect, incidental, or consequential damages (including without limitation, lost profits or revenue), even if such party has been advised of the possibility of such damages.
