General Terms And conditions

Applicability.

These terms and conditions of sale (these “Terms”) are the only terms which govern the sale of products (“Products”) by Avnan Electro Inc., Avnan Hong Kong Limited, and Avnan Technology (ShenZhen) Company Limited (collectively “Avnan”) to its customer (“Customer”). Customers may have received any or all of the following documents from Avnan, including but not limited to a proposal (“Proposal”), a Statement of Work (“SOW”), Customer Sample Approval Form (“Customer Approval”), an Engineering Document Package and/or a Supplier Managed Inventory Agreement (collectively the “Agreements”), all of which are expressly subject to these Terms. Notwithstanding the foregoing, to the extent that there is any inconsistency or ambiguity between these Terms and any term in any of the Agreements, unless expressly stated in the Agreements otherwise, the Terms in the Agreements shall govern the relationship between Avnan and the Customer, and shall supersede these Terms, solely to the extent of the inconsistency or ambiguity. For the sake of greater clarity, should there be a discrepancy or ambiguity regarding the Products’ specifications (the “Specs”), any relevant external standards and codes of regulating bodies shall supersede the Customer’s Specs or Avnan’s Specs. Should there be a discrepancy or ambiguity regarding the Customer’s Specs and Avnan’s Specs, Avnan’s Specs shall supersede the Customer’s Specs.

1. Any written agreements between Avnan and Customer including but not limited to an Avnan-issued Proposal, invoice, order acknowledgement, Customer Approval, SOW, Engineering Document Package, and Supplier Managed Inventory Agreement together with these Terms comprise the entire agreement between the parties, which supersedes all prior or contemporaneous understandings, agreements, negotiations, representations and warranties, and communications, both written and oral. These Terms prevail over any of Customer’s general terms and conditions of purchase regardless of when Customer submitted its purchase order or such terms. Fulfilment of Customer’s purchase order does not constitute acceptance of any of Customer’s terms and conditions and does not serve to modify or amend these Terms.

Proposals; Purchase Orders.

1. Any Proposals provided by Avnan shall be valid for seven (7) calendar days from the date of issue, subject to Avnan’s ability to maintain the price stated in a Proposal solely due to an increase in price of raw materials or components.
2. Any information provided by Customer to Avnan to determine engineering development, tooling and unit pricing is considered complete at the time of a Proposal being provided, unless otherwise noted. If it is discovered that the information is not complete or the scope of work and/or the information changes, the Proposal may be invalid and a new Proposal may be necessary at the discretion of Avnan.
3. All purchase orders (“POs”) issued by Customer shall reference the Proposal number provided by Avnan.
4. All POs issued by Customer shall reflect the details set forth on Avnan’s Proposal. Should Customer desire an earlier delivery date than the estimated time required for production and ocean transit, Avnan will advise as to whether it is able to meet such earlier date, and if any additional costs are involved.If a PO includes a request for sample approval, production will not start until Avnan receives this approval. This does not affect related POs or PO line items or PO agreements which authorize Avnan to perform work such as purchase long lead time components.
5. If Customer wishes to consign components to Avnan, those components must be identified on the PO issued to Avnan.
   Proposal prices do not include taxes and all sales made are subject to any applicable taxes imposed by the governments, or by any other governmental authority.
6. Prices for any Products ordered but not to be shipped immediately may be changed by Avnan to conform to the prices in effect at the time of the shipment.
7. Clerical and stenographical errors are subject to correction.
8. Delivery estimates are based upon best information available and are subject to revision as circumstances may necessitate at the time order is received.
9. All POs received are subject to acceptance by Avnan, in the form of an order acknowledgement.
10. An acceptance by Customer of any Products ordered either in writing or verbally shall constitute an acceptance of these Terms. Changes in application settings, specifications and drawings are subject to acceptance in the same manner as the original order, and, in any event, such changes are the responsibility of Customer, and Avnan is to be reimbursed for all costs and materials which cannot be used due to the changed specifications.
11. An increase in quantity of an acknowledged and/or a partially shipped order will be considered a new order and priced at the quantity of the increase. Customer will not be issued a credit should it elect to return items previously shipped following a subsequent decrease in price. A decrease in the quantity of an acknowledged order will subject the uncancelled items to be priced according to the quantity price applicable. Items previously shipped shall be subject to an additional billing invoice for the difference in quantity prices. The cancelled units will be subject to cancellation charges.

Delivery.

1. Every effort will be made to deliver the Products within the promised time. Avnan will not assume any responsibility whatsoever for delays caused externally beyond its control.
2. For avoidance of doubt, Avnan shall not be liable for any delays, loss or damage in transit of the Products, and will not be responsible for any transportation or other charges beyond those specifically included per the Incoterms referenced in Avnan’s Proposal.
3. Unless otherwise agreed in writing by the parties, Avnan shall deliver the Products EXW Avnan (Incoterms 2020), using Avnan’s standard methods for packaging and shipping such Products. Customer shall take delivery of the Products within three (3) days after getting Avnan’s written notice. Customer shall be responsible for all loading costs and provide equipment and labour reasonably suited for receipt of the Products at Avnan’s Office.
4. Avnan may, in its sole discretion, without liability or penalty, make partial shipments of Products to Customer. Each shipment will constitute a separate sale, and Customer shall pay for the units shipped whether such shipment is in whole or partial fulfilment of Customer’s purchase order.
5. If for any reason Customer fails to accept delivery of any of the Products on the date fixed pursuant to Avnan’s notice that the Products have been delivered at Avnan’s Office, or if Avnan is unable to deliver the Products at Avnan’s Office on such date because Customer has not provided appropriate instructions, documents, licenses or authorizations: (i) risk of loss to the Products shall pass to Customer; (ii) the Products shall be deemed to have been delivered; and (iii) Avnan, at its option, may store the Products until Customer picks them up, whereupon Customer shall be liable for all related costs and expenses (including, without limitation, storage and insurance), as set forth in Sections 8(c) and (d) below.

Quantity.

Customer must notify Avnan regarding the wrong quantity of Products delivered within seven (7) business days of the Products having been received.

Title and Risk of Loss.

Title and risk of loss passes to Customer upon delivery of the Products at Avnan’s Office, unless specified otherwise on the Proposal. As collateral security for the payment of the purchase price of the Products, Customer hereby grants to Avnan a lien on and security interest in and to all of the right, title and interest of Customer in, to and under the Products, wherever located, and whether now existing or hereafter arising or acquired from time to time, and in all accessions thereto and replacements or modifications thereof, as well as all proceeds (including insurance proceeds) of the foregoing. The security interest granted to Avnan hereunder entitles Avnan to repossess the Products, and gives Avnan priority over other creditors of the Customer to such Products.

Inspection and Rejection of Non-Conforming Products.

1. Customer shall inspect the Products within thirty (30) days of receipt (“Inspection Period”). Customer will be deemed to have accepted the Products unless it notifies Avnan in writing of any Non-Conforming Products during the Inspection Period and furnishes such written evidence or other documentation as reasonably required by Avnan. “Non-Conforming Products” means only the following: (i) Products shipped are different than identified in Customer’s PO; or (ii) Products’ label or packaging incorrectly identifies its contents.
2. If Customer timely notifies Avnan of any Non-Conforming Products, Avnan shall, in its sole discretion, (i) replace such Non-Conforming Products with conforming Products, or (ii) credit or refund the Price for such Non-Conforming Products, together with any reasonable shipping and handling expenses incurred by Customer in connection therewith. Customer shall ship, at its expense and risk of loss, the Non-Conforming Products to Avnan’s Office. If Avnan exercises its option to replace Non-Conforming Products, Avnan shall, after receiving Customer’s shipment of Non-Conforming Products, ship to Customer, at Customer’s expense and risk of loss, the replaced Products.
3. Customer acknowledges and agrees that the remedies set forth in Section 6(b) are Customer’s exclusive remedies for the delivery of Non-Conforming Products. Except as provided under Section 6(b), all sales of Products to Customer are made on a one-way basis and Customer has no right to return Products purchased under this Agreement to Avnan.

Limited Warranty; Returns.

1. Avnan warrants to Customer that for the earlier of a period of one (1) year of Customer’s use of the Products or eighteen (18) months from the date of production of the Products, unless agreed upon differently by both parties in writing (“Warranty Period”), that such Products will materially conform to the specifications set forth in the Customer Approval and will be free from material defects in material and workmanship.
2. Avnan will not accept return of any Products without a written notice from Customer in accordance with Section 8(i) below, and the issuance by Avnan of a Return Material Authorization (“RMA”) number.
3. Should inspection of returned items show they are defective due to Avnan’s manufacture, they will be replaced or fully credited at no charge to Customer, and Avnan shall have sole discretion as to whether to replace the Product or credit Customer. If inspection shows that only some parts are faulty, and Customer prefers to be credited, and not have the Products replaced, then Customer will receive a credit only for 50% of components of the Products that were not found to be faulty. For avoidance of doubt, where no faulty components were found in the Products, Customer shall be credited for 50% of the components of the Products. Any defects appearing more than 18 months from the date of production shall be deemed to be due to ordinary wear and tear.
4. If inspection shows that Products have been damaged by Customer, Avnan will advise Customer accordingly, and will request repair or replacement authorization, or disposition of the returned items at Customer’s expense. Avnan will dispose of all returned items to avoid any possible contamination of shipments, within 2 weeks of RMA closure unless Customer specifies the return of the said items. Unless negotiated otherwise, RMA shipments to Avnan are paid by Customer; Avnan will pay for the shipment from its warehouse to Customer’s shipping address.
5. Avnan assumes no risk or liability for the suitability or unsuitability or results of the use of its Products, used in combination with any electrical or electronic components, circuits, systems, assemblies, or any other material, substances, or environments. Avnan shall in no event be liable for any property damage or personal injury resulting directly or indirectly from the use or operation of any Products purchased from Avnan, or any apparatus containing Products purchased from Avnan or for any consequential damages or loss of anticipated profits.
6. Avnan’s sole responsibility, under this warranty, shall be to repair or replace, at its discretion, EXW (Incoterms) Avnan’s Office, any defective items received at its Office within the term of this warranty. This warranty is made on the condition that prompt notice of any defect is given to Avnan in writing within the warranty period and that Avnan’s inspection, upon receipt of the defective items, properly packed and with transportation charges prepaid by Customer, shall reveal to Avnan’s satisfaction that Customer’s claim is valid under the terms of this warranty.
7. EXCEPT FOR THE WARRANTY SET FORTH IN SECTION 7(A), AVNAN MAKES NO CONDITION OR WARRANTY WHATSOEVER WITH RESPECT TO THE PRODUCTS, INCLUDING ANY (a) CONDITION OR WARRANTY OF MERCHANTABILITY; OR (b) CONDITION OR WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE WHETHER EXPRESS OR IMPLIED BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE OR OTHERWISE.
8. Products manufactured by a third party (“Third Party Products”) may constitute, contain, be contained in, incorporated into, attached to or packaged together with, the Products. Third Party Products are not covered by the warranty in Section 7(a). For the avoidance of doubt, AVNAN MAKES NO REPRESENTATIONS, CONDITIONS OR WARRANTIES WITH RESPECT TO ANY THIRD-PARTY PRODUCT, INCLUDING ANY (a) CONDITION OR WARRANTY OF MERCHANTABILITY; (b) CONDITION OR WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE; WHETHER EXPRESS OR IMPLIED BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE OR OTHERWISE.
9. Avnan shall not be liable for a breach of the warranty set forth in Section 7(a) unless: (i) Customer gives written notice of the defect, reasonably described, to Avnan within seven (7) days of the time when Customer discovers or ought to have discovered the defect; (ii) Avnan is given a reasonable opportunity after receiving the notice to examine such Products and Customer (if requested to do so by Avnan) returns such Products to Avnan’s place of business at Avnan’s cost for the examination to take place there; and (iii) Avnan reasonably verifies Customer’s claim that the Products are defective.
10. Avnan shall not be liable for a breach of the warranty set forth in Section 7(a) if: (i) Customer makes any further use of such Products after giving such notice; (ii) the defect arises because Customer failed to follow Avnan’s oral or written instructions as to the storage, installation, commissioning, use or maintenance of the Products; or (iii) Customer alters or repairs such Products without the prior written consent of Avnan.
    Subject to Section 7(i) and Section 7(j) above, with respect to any such Products during the Warranty Period, Avnan shall, in its sole discretion, either: (i) repair or replace such Products (or the defective part) or (ii) credit or refund the price of such Products at the pro rata contract rate provided that, if Avnan so requests, Customer shall, at Avnan’s expense, return such Products to Avnan.
11. THE REMEDIES SET FORTH IN SECTION 7(f) SHALL BE THE CUSTOMER’S SOLE AND EXCLUSIVE REMEDY AND AVNAN’S ENTIRE LIABILITY FOR ANY BREACH OF THE LIMITED WARRANTY SET FORTH IN SECTION 7(a).

Invoicing and Accounts Receivable Policy

1. Charges are invoiced to Customer at the time of shipment of Products against the PO issued by Customer, as per terms and conditions set forth hereunder.
2. The due date for payment will be shown on the invoices based on agreed terms of sale.
3. If invoices are not paid by the due date, they are considered overdue. A late payment charge of 2% will be added to overdue balances for every 30 days overdue balance.
4. Avnan reserves the right to hold, suspend, or cancel any shipment or to modify the terms of payment for credit reasons. Any legal and/or debt collection fees incurred as the result of late or non-payment shall be the sole responsibility of Customer and will be billed accordingly.
5. If the overdue invoices are not paid within 60 days of becoming “Past Due”, a separate “Final Demand” letter will be sent stating that if the invoices remain unpaid after 30 days from the date of the final demand, the account may be turned over to a collection agency.
6. All sales are final, Products may only be returned with RMAs.
   No deductions are permitted from invoices without Avnan’s prior written authorization or a Credit Note issued by Avnan.
   A $25.00 handling charge will be applied to all returned cheques. Only certified cheques, Electronic Fund Transfer (EFT) or Telegraphic Transfer (TT) will be accepted for any returned payment, including handling charges. Avnan reserves the right to refuse to accept non-certified cheques for future orders.

Indemnification.

1. Customer will protect and indemnify Avnan, against all claims of infringement of patents, designs, copyrights or trade names with respect to the Products manufactured wholly or partially to Customer’s designs or specifications or especially designed by Avnan to meet Customer’s requirements.

Limitation of Liability.

1. IN NO EVENT SHALL AVNAN BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, OR PUNITIVE DAMAGES, LOST PROFITS OR REVENUES OR DIMINUTION IN VALUE, ARISING OUT OF OR RELATING TO ANY BREACH OF THESE TERMS, WHETHER OR NOT THE POSSIBILITY OF SUCH DAMAGES HAS BEEN DISCLOSED IN ADVANCE BY CUSTOMER OR COULD HAVE BEEN REASONABLY FORESEEN BY CUSTOMER, REGARDLESS OF THE LEGAL OR EQUITABLE THEORY (CONTRACT, TORT OR OTHERWISE) UPON WHICH THE CLAIM IS BASED, AND NOTWITHSTANDING THE FAILURE OF ANY AGREED OR OTHER REMEDY OF ITS ESSENTIAL PURPOSE.
2. IN NO EVENT SHALL AVNAN’S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT, WHETHER ARISING OUT OF OR RELATED TO BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EXCEED THE TOTAL OF THE AMOUNTS PAID TO AVNAN BY CUSTOMER FOR THE PRODUCTS SOLD HEREUNDER.
3. The limitation of liability set forth in Section 10(b) shall not apply to (i) liability resulting from Avnan’s gross negligence or wilful misconduct and (ii) death or bodily injury resulting from Avnan’s acts or omissions.

General.

1. Exclusivity. Avnan does not recognize any terms and conditions printed on Customer’s PO which enlarge Avnan’s liability or responsibility beyond those stated hereunder.
2. Amendment. These Terms may only be amended or modified in a writing which specifically states that it amends these Terms and is signed by an authorized representative of each party.
3. Force Majeure. Avnan should not be liable for any loss, damage, or delay in fulfilling or performing its obligations hereunder when and to the extent such failure or delay is caused by or results from acts beyond its control, including, without limitation, the following force majeure events (“Force Majeure Event(s)”): (a) acts of God; (b) flood, tsunami, fire, earthquake, explosion; (c) epidemics, pandemics, including the 2019 novel coronavirus pandemic (COVID-19), and other potential disaster(s) or catastrophe(s); (d) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riot, or other civil unrest; (e) government order, law or actions; (f) embargoes or blockades in effect; (g) national or regional emergency; and (h) strikes, lockouts, labour stoppages or slowdowns, labour disputes, or other industrial disturbances; and (i) shortage of adequate power or telecommunications or transportation facilities; Avnan shall give notice within three (3) days of the Force Majeure Event to the other party, stating the period of time the occurrence is expected to continue, and shall use diligent efforts to end the failure or delay and ensure the effects of such Force Majeure Event are minimized, and shall resume the performance of its obligations as soon as reasonably practicable after the removal of the cause.
4. Insurance. Avnan shall, at its own expense, maintain and carry insurance in full force and effect which includes, but is not limited to, commercial general liability (including product liability)
5. Confidential Information. All non-public, confidential or proprietary information of Avnan, including but not limited to specifications, samples, patterns, designs, plans, drawings, documents, data, business operations, customer lists, pricing, discounts or rebates, disclosed by Avnan to Customer, whether disclosed orally or disclosed or accessed in written, electronic or other form or media, and whether or not marked, designated or otherwise identified as “confidential” in connection with this Agreement is confidential, solely for the use of performing this Agreement and may not be disclosed or copied unless authorized in advance by Avnan in writing. Upon Avnan’s request, Customer shall promptly return all documents and other materials received from Avnan. Avnan shall be entitled to injunctive relief for any violation of this Section. This Section does not apply to information that is: (a) in the public domain; (b) known to Customer at the time of disclosure; or (c) rightfully obtained by Customer on a non-confidential basis from a third party.
6. Governing Law. All matters arising out of these Terms are governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein without giving effect to any choice or conflict of law provision or rule.
7. Severability. If any term or provision of these Terms is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or invalidate or render unenforceable such term or provision in any other jurisdiction.