Covenant Panelworks (CPW) Standard Terms and Conditions of Sale
1. Agreement and Acceptance
The terms and conditions set forth below constitute the complete and exclusive agreement between Covenant Panelworks, LLC (“SELLER”) and the PURCHASER (“BUYER”) for the sale of Products and related services. These Terms supersede any prior or contemporaneous understandings or writings regarding the subject matter.
Any additional, different, or conflicting terms in any BUYER purchase order, acknowledgement, or other document are hereby objected to and rejected and shall be of no force or effect unless expressly accepted in a separate writing signed by an authorized representative of SELLER. Shipment, commencement of work, or other performance shall not constitute acceptance of BUYER terms.
In the event of conflict between these Terms and any other document, these Terms control. BUYER shall not withhold, set off, recoup, backcharge, or debit any amounts against sums due to SELLER.
The provisions of Sections 2–3 (as applicable to approvals), 4 (payment), 6–7 and 15–16 (delivery, shipping, bill-and-hold/storage), 8 (cancellation/changes), 9 (IP), 10–12 (warranty; disclaimers; limitation of liability), 17–18 (compliance/export), 19–22 (assignment; beneficiaries; force majeure; confidentiality), and 14 (governing law/dispute resolution), together with any provisions that by their nature should survive, shall survive expiration or termination.
2. Scope of Work and Engineering Approval
- Custom Nature: SELLER is a custom assembly and engineering shop. Products are built to specific designs, specifications, or drawings provided by or approved in writing by BUYER.
- Approval of Drawings: SELLER shall submit shop drawings or schematics for BUYER’s written approval. BUYER’s approval constitutes
(i) confirmation that the drawings conform to BUYER’s requirements, and
(ii) a waiver of any claim against SELLER for errors or omissions in or arising from the approved design, specifications, or instructions, including reliance thereon by SELLER.
SELLER shall not be liable for defects or nonconformities resulting from BUYER-provided or approved designs, instructions, specifications, components, diagrams, or modifications. - Field Conditions: BUYER is responsible for complete and accurate site and application information. All costs for modifications required to suit unforeseen or differing field conditions, code or site requirements, or omissions/inaccuracies in information supplied by BUYER shall be borne by BUYER via written change order, with corresponding schedule extension.
- Indemnity: BUYER shall defend, indemnify, and hold harmless SELLER, its affiliates, and their respective officers, directors, employees, and agents from and against any and all claims, demands, actions, losses, liabilities, damages, fines, penalties, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to:
(i) BUYER-provided or approved designs, instructions, specifications, diagrams, or components;
(ii) integration, installation, commissioning, or operation performed by or on behalf of BUYER;
(iii) personal injury, death, or property damage to the extent caused by the foregoing; and
(iv) any allegation that the foregoing violate applicable laws, codes, or third-party rights, including intellectual property. Nothing in this Section limits any indemnity in Sections 5, 9, or 11.
3. Pricing and Taxes
All prices are FCA SELLER’s facility (Incoterms 2020) unless otherwise specified. Prices are subject to equitable adjustment for alterations in specifications, designs, quantities, or delivery schedules requested by BUYER. Any sales, use, value-added, GST, withholding, customs, duties, or similar taxes, fees, or charges are additional and payable by BUYER unless a valid exemption certificate is provided at the time of order; any required withholding shall be grossed-up so SELLER receives the full contract price net of taxes.
BUYER shall not withhold, set off, recoup, backcharge, or debit any amounts against sums due to SELLER. Past due amounts accrue interest at the lesser of 1.5% per month or the maximum rate permitted by law, plus reasonable collection costs, attorneys’ fees, and expenses incurred by SELLER in enforcing payment.
4. Progress Payments
For purchase orders with a total price exceeding $50,000, the following milestone payments apply (percentages of total purchase price) and are due net ten (10) days from invoice:
- 20% upon Receipt of Order (Engineering/Mobilization);
- 40% upon Order of Major Materials;
- 25% upon Release of Issue for Construction (IFC) Drawings; and
- 15% upon Notification of Completion (FCA Terms).
Change orders shall be integrated into and invoiced with the standard progress billing cycle, provided the total contract value does not exceed $50,000. Should any change order result in a cumulative total contract price of $50,000 or greater, such change order is invoiced upon execution and due immediately.
If any payment is not made when due, or if SELLER reasonably determines BUYER’s creditworthiness has changed, SELLER may, without liability: suspend performance; withhold shipment; place Products into storage at BUYER’s risk and expense; accelerate all amounts then outstanding; require cash in advance, milestone prepayment, or a letter of credit; and/or require adequate assurance of performance. SELLER’s continued work is conditioned upon timely receipt of each milestone and change order payment.
5. Buyer-Provided Equipment (BPE) and Material
If BUYER provides components, software, data, or wiring/logic diagrams for integration:
- Delivery and Information: BPE must arrive per SELLER’s production schedule with complete and accurate technical data, certificates, licenses, safety information, and handling/integration instructions.
- No Responsibility for BPE: SELLER is not responsible for the functionality, condition, compliance, cybersecurity, data integrity, or warranty of BPE and has no obligation to test, validate, or repair BPE except as expressly agreed in a signed writing; any such services are billable on a time-and-materials basis.
- Inspection/Quarantine: SELLER may inspect BPE and may reject, return, quarantine, or require replacement of BPE that is damaged, nonconforming, unsafe, incomplete, improperly documented, or incompatible. All schedule impacts, rework, handling, storage, disposal, and related costs are borne by BUYER, and delivery schedules are extended accordingly.
- Indemnity: BUYER shall defend, indemnify, and hold harmless SELLER from and against any and all claims, losses, liabilities, damages, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to BPE or BUYER-provided diagrams or software, including without limitation product liability, intellectual property claims, noncompliance with laws or regulations, cybersecurity or data incidents, property damage, and personal injury or death.
6. Delivery, Title, and Risk of Loss
Delivery to the carrier at SELLER’s facility constitutes delivery to BUYER under FCA SELLER’s facility (Incoterms 2020). Title and risk of loss pass to BUYER upon SELLER’s tender of the Products to the carrier at the FCA point. BUYER shall inspect the Products promptly upon receipt and must notify SELLER in writing of any shortage or visible damage within seventy-two (72) hours of delivery with reasonable supporting documentation; failure to do so constitutes acceptance as delivered, without prejudice to warranty claims for latent defects subject to Section 10.
7. Bill & Hold / Storage Charges
If BUYER requests delay in shipment after manufacturing and testing are completed:
- SELLER will issue an invoice as if shipped;
- title transfers upon invoicing or placement into storage, whichever occurs first; and
- risk of loss transfers no later than placement into storage. BUYER shall maintain insurance at full replacement value naming SELLER as loss payee during storage.
Storage charges equal 1.5% of the contract value per month plus direct handling, relocation, and environmental costs. Prior to shipment from storage, SELLER may re-inspect, test, or clean the Products at BUYER’s expense, and any degradation due to extended storage is at BUYER’s risk.
On request, BUYER shall execute a commercially reasonable bill-and-hold acknowledgement and Storage Agreement. SELLER may condition release or shipment of stored Products on full payment of all amounts due, including storage, handling, re-inspection, and transportation charges.
8. Cancellations and Changes
Orders for custom-built panels are non-cancellable except with SELLER’s prior written consent. Upon any approved cancellation, BUYER shall immediately pay:
- 100% of engineering and labor costs incurred to date;
- 100% of non-returnable materials and committed supplier charges (including cancellation fees);
- restocking fees actually incurred for returnable components plus a 20% restocking fee where applicable;
- a 10% administrative fee on the total contract value;
- reasonable demobilization, storage, and handling costs; and
- a reasonable allocation for overhead and profit on work performed to date (no less than the percentage of completion).
In no event shall total cancellation charges be less than ten percent (10%) of the total contract value. Changes to scope, specifications, schedule, quantities, or milestones must be authorized in a written change order executed by SELLER. Change orders are due and payable immediately upon execution and may adjust price, schedule, and milestones accordingly.
9. Intellectual Property (IP) Protection
Any software, PLC source code, firmware, documentation, or proprietary engineering designs created, authored, or provided by SELLER (collectively, “IP”) remain the exclusive property of SELLER. Subject to full payment, BUYER receives a non-exclusive, non-transferable, non-sublicensable license to use:
- the physical assembly; and
- the object/compiled code of the IP solely as embedded in the delivered Products and solely for their intended operation at the site(s) of installation.
Except as expressly permitted by law without waiver, BUYER shall not copy, distribute, host, provide access to, decompile, disassemble, reverse engineer, or attempt to derive source code; modify, create derivative works, or benchmark for publication; or remove or alter proprietary notices.
SELLER DISCLAIMS ALL WARRANTIES (EXPRESS, IMPLIED, OR STATUTORY) RELATING TO NON-INFRINGEMENT OR FREEDOM FROM IP CLAIMS, AND SHALL HAVE NO OBLIGATION TO INDEMNIFY OR DEFEND AGAINST ANY IP CLAIMS, UNLESS EXPRESSLY AGREED IN A SEPARATE WRITTEN AGREEMENT SIGNED BY SELLER.
BUYER is solely responsible for ensuring that BUYER-provided specifications, designs, software (including open-source components), data, or components, and any combination or configuration specified by BUYER, do not infringe or misappropriate any third-party rights. BUYER shall defend, indemnify, and hold harmless SELLER from and against any IP claims and related losses arising therefrom.
10. Limited Warranty
- Workmanship: SELLER warrants the custom assembly and labor to be free from defects in workmanship and to conform in all material respects to SELLER’s approved shop drawings and specifications for one (1) year from the date of shipment.
- Components: For components not manufactured by SELLER, SELLER passes through only the applicable manufacturer’s warranty, if any, and has no additional obligation.
- Exclusions: This warranty excludes: normal wear and tear; consumables; field removal/reinstallation; access, travel, or per diem; damage or nonconformity caused by misuse, improper storage, BUYER specifications or designs, third-party components, improper installation, failure to follow instructions, integration with third-party systems, or unauthorized modifications.
- Procedures; Transportation: Warranty service requires SELLER’s prior written authorization and an RMA. BUYER is responsible for deinstallation and shipment to SELLER; SELLER may, at its option, repair or replace and return FCA SELLER’s facility.
- Exclusive Remedy: THE REMEDIES SET FORTH IN THIS SECTION ARE BUYER’S SOLE AND EXCLUSIVE REMEDIES FOR WARRANTY CLAIMS AND ARE IN ADDITION TO, AND FURTHER LIMITED BY, THE LIMITATIONS OF LIABILITY IN SECTION 12.
11. Third-Party Systems Disclaimer
SELLER has no responsibility or liability for any issues arising from:
- integration with third-party equipment, systems, networks, or software;
- components not supplied by SELLER; or
- modifications not authorized by SELLER.
SELLER does not warrant operation in combination with third-party systems unless expressly agreed in writing. All such integrations are at BUYER’s sole risk, and BUYER shall defend, indemnify, and hold harmless SELLER from and against related claims, losses, liabilities, costs, and expenses, including those arising from downtime, loss of production, or regulatory noncompliance attributable to such third-party systems.
12. Limitation of Liability
TO THE MAXIMUM EXTENT PERMITTED BY LAW, SELLER’S TOTAL LIABILITY FOR ANY AND ALL CLAIMS ARISING OUT OF OR RELATING TO THE TRANSACTION SHALL NOT EXCEED THE AMOUNT ACTUALLY PAID BY BUYER FOR THE SPECIFIC WORK OR PRODUCTS GIVING RISE TO THE CLAIM.
IN NO EVENT SHALL SELLER BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, MULTIPLE, OR PUNITIVE DAMAGES, INCLUDING WITHOUT LIMITATION LOSS OF PROFITS, REVENUE, PRODUCTION, USE, OR DOWNTIME, EVEN IF ADVISED OF THE POSSIBILITY. THE LIMITATIONS OF THIS SECTION APPLY REGARDLESS OF THE FORM OF ACTION AND IN ADDITION TO, AND IN COORDINATION WITH, THE EXCLUSIVE REMEDIES STATED IN SECTION 10.
13. Non-Solicitation of Employees
During the term of this Agreement and for one (1) year thereafter, BUYER shall not, directly or indirectly, solicit for employment or hire any SELLER employee who was involved in the engineering, design, programming, or assembly of BUYER’s project; provided that general solicitations not specifically directed at SELLER’s employees shall not violate this Section.
In addition to injunctive relief, if BUYER breaches this Section, BUYER shall pay liquidated damages equal to fifty percent (50%) of the employee’s annualized compensation (salary plus any bonus or target incentive) at the time of separation, as a reasonable estimate of recruiting and training costs, not a penalty.
14. Governing Law and Arbitration
These Terms are governed by the laws of the Commonwealth of Pennsylvania, without regard to conflict-of-law rules. Any dispute arising out of or relating to these Terms shall be resolved by binding arbitration seated in Beaver County, Pennsylvania, under the Commercial Arbitration Rules of the American Arbitration Association by a single arbitrator experienced in commercial manufacturing contracts. The language of the arbitration shall be English.
Discovery shall be limited to what is reasonably necessary for a fair resolution, and the proceedings, filings, and award shall be confidential except as required to enforce rights. The arbitrator may grant any remedy available at law or in equity (subject to Section 12) and shall issue a reasoned award. Judgment on the award may be entered in any court of competent jurisdiction.
Either party may seek provisional or injunctive relief from any court of competent jurisdiction to protect its rights or property pending arbitration. The prevailing party shall be entitled to reasonable attorneys’ fees and costs.
15. Shipping
Unless otherwise agreed in a signed writing, SELLER will select the point of origin, routing, method of transportation, and carrier equipment. BUYER-requested special routing, insurance, accessorials, or delivery requirements are at BUYER’s expense. BUYER must
(i) inspect upon delivery,
(ii) retain packaging,
(iii) note visible damage on the carrier’s receipt, and
(iv) notify SELLER within seventy-two (72) hours and provide any carrier inspection report. Risk of loss transfers at the FCA point.
16. Storage Agreement
If Products are placed into storage due to BUYER delay or at BUYER’s request, BUYER shall execute a Storage Agreement upon SELLER’s request. Title transfers upon invoicing or placement into storage, and risk of loss transfers no later than placement into storage. BUYER shall pay monthly storage and handling charges and all re-inspection, testing, or cleaning costs prior to shipment from storage and shall maintain insurance at full replacement value naming SELLER as loss payee.
17. Safety, Compliance and Warning Labels
At the time of manufacture, the Products comply with U.S. laws and regulations generally applicable to such products in the jurisdiction of manufacture. SELLER makes no representation regarding compliance with laws, codes, standards, or regulations applicable to BUYER’s specific use, installation, site, or jurisdiction unless expressly agreed in writing.
SELLER will provide standard safety warnings, labels, and instructions applicable to the Products as manufactured. BUYER is solely responsible for:
- ensuring end users comply with such warnings and instructions;
- obtaining any site-specific or jurisdictional approvals, certifications, inspections, or additional/localized labeling, instructions, or safeguards required by BUYER’s application or jurisdiction; and
- the effects of integration with third-party systems.
SELLER disclaims liability arising from misuse, failure to follow instructions, site conditions, or post-delivery modifications by or on behalf of BUYER.
18. International Sales / Export Compliance
BUYER is solely responsible for compliance with all export, re-export, import, sanctions, and local regulatory requirements applicable to its purchase, use, or resale of the Products. SELLER shall have no liability for delays or failures resulting from export control restrictions, licensing, or customs requirements.
BUYER shall timely provide all information reasonably requested by SELLER to facilitate export or import clearance and shall not use, transfer, export, or re-export any Products or related technology in violation of applicable laws. BUYER shall defend, indemnify, and hold harmless SELLER from and against any fines, penalties, or claims arising from BUYER’s noncompliance.
All shipments are FCA SELLER’s facility (Incoterms 2020), and risk of loss transfers upon delivery to the carrier at the FCA point.
19. Assignment
BUYER may not assign or transfer any rights or obligations under these Terms, whether by operation of law, merger, change of control, or otherwise, without SELLER’s prior written consent, and any attempted assignment without such consent is void.
SELLER may assign these Terms, any order, or receivables, or subcontract portions of the work, including to its affiliates or successors, without consent. Any permitted assignment shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.
20. Third-Party Beneficiaries
These Terms are for the sole benefit of SELLER and BUYER. No third party shall have any rights under these Terms.
21.Force Majeure
SELLER shall not be liable for any delay or failure to perform due to causes beyond its reasonable control, including acts of God, epidemics/pandemics, labor disputes, shortages, supplier failures, transportation delays, governmental actions, blockades, embargoes, sanctions, power or telecom outages, cyber incidents, or other events of like nature.
Schedules shall be equitably extended, and prices adjusted for increased costs reasonably attributable to such events. SELLER may reasonably allocate inventory and production among customers. If a force majeure event continues for more than ninety (90) days, SELLER may terminate the affected order(s) in whole or part without liability, and BUYER shall pay for work performed, materials committed, storage, and reasonable demobilization.
22. Confidentiality
BUYER shall keep confidential and not disclose to any third party any nonpublic information received from SELLER, including without limitation pricing, proposals, drawings, software, source code, object code, schematics, bills of material, and know-how, and shall use such information solely to evaluate or utilize the Products.
BUYER shall protect such information using at least the same degree of care it uses for its own confidential information, and no less than a reasonable degree of care. Upon SELLER’s request, BUYER shall promptly return or destroy SELLER’s confidential information (except for archival copies required by law).
This Section does not restrict information that is or becomes public through no fault of BUYER, is rightfully received from a third party without duty of confidentiality, or is independently developed without use of SELLER’s confidential information. Any feedback, suggestions, or improvements provided by BUYER may be used by SELLER without restriction or obligation.
23. Payment Terms; Remedies; No Setoff
Except as otherwise stated in Section 4 for milestone payments, invoices are due net thirty (30) days from invoice date. BUYER shall make all payments in U.S. dollars, by wire or other method acceptable to SELLER, without withholding, setoff, recoupment, backcharge, or deduction of any kind. Past due amounts accrue interest at the lesser of 1.5% per month or the maximum rate permitted by law, plus reasonable collection costs and attorneys’ fees.
If any payment is late, or SELLER determines in good faith that BUYER’s financial condition or payment history is unsatisfactory, SELLER may, without liability, suspend performance or shipment, require payment in advance or other adequate assurance (including a letter of credit), or accelerate all amounts due.
24. Non-Waiver
No failure, delay, or omission by SELLER in exercising any right, remedy, power, or privilege under these Terms will operate as a waiver, nor will any single or partial exercise preclude any other or further exercise or the exercise of any other right or remedy.
Any waiver by SELLER must be in a writing signed by an authorized representative of SELLER and will be effective only in the specific instance and for the specific purpose given. No course of dealing, course of performance, or trade usage will be deemed to modify these Terms or constitute a waiver.