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.. Geoff Nov10/99 |
One of our customers, PLH Aviation Equipment, recently sent us a letter asking us to "acknowledge receipt of and your concurrence to" their new Purchase Order conditions. Seems simple enough--some of our bigger customers occasionally have Purchase Order terms and conditions. This one was long--21 sections, and all done in small type so it fit neatly onto one page.
Way down in Section 14, it said that Frontier would assume all the liability for any claims arising from the sale or use of whatever we sold them. Actually, it said "The Supplier agrees to save the Purchaser, its customers, lessees, and those for whom the Purchaser acts as agent in purchasing hereunder, harmless and indemnified from all claims, liabilities, losses, damages and expenses, including reasonable attorney's fees, sustained from the purchase, use or sale of any goods or from the breach of any of the guarantees or warranties hereunder, or from any actual or claimed trademark, patent, or copyright infringements or any litigation based thereon, and such obligations shall survive the acceptance of the goods and payment by the Purchaser".
Try saying that in one breath (it is only one sentence)! Nobody reads this stuff--and that's what PLH was hoping for!
If we agreed to this, it would mean that if PLH built anything we sold
into a piece of equipment, sent it down to the USA, and it fell on someone's
foot, or somehow injured someone, Frontier would be sued. In fact, we would
have agreed to pay the lawyer's fees, too! US courts are known for their
outlandish damage awards--GM got sued for $4.9 billion a few months ago when a
drunk driver crashed into a Chevy Malibu.
US liability settlements
are ridiculous. Our liability insurance premiums on US sales are 19 times our
Canadian and foreign premiums.
Section 2 said that simply by accepting any purchase order from them, we agreed to all 21 sections of their terms and conditions. So by accepting PLH's purchase order, Frontier accepts PLH's liability.
Kubota's warranty states that Kubota is not liable for damages, so the buck would stop with us! I don't know how legal this is... but it could cost us quite a lot to even try and defend ourselves in an American court.
Moral of the story: send any strange, legal looking paperwork to Geoff, or take the time to read and understand everything before you sign or agree to it!