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TERMS AND CONDITIONS

QUANTUM COMPOSERS, INC

TERMS AND CONDITIONS

1. ACCEPTANCE OF ORDER. The acceptance by Manufacturer (Quantum Composers, Inc) of the Purchaser’s order is expressly contingent upon Purchaser’s acceptance of the Terms and Conditions stated herein, unless otherwise specifically agreed in writing signed by the Manufacturer.

2. PRICE. (a) Unless stated otherwise, all prices quoted are in U.S. Dollars, F.O.B. Manufacturer’s place of business in Bozeman, MT. Possession of goods shall pass to the Purchaser on delivery by Manufacturer to the carrier at point of shipment. Purchaser will be responsible for freight and insurance charges for all goods shipped under the purchase agreement. (b) Prices and orders do not include federal, state or local excise, sales, use or other taxes now or hereinafter enacted, which are applicable to the goods sold hereunder. Such tax or taxes will be added by Manufacturer to the sales price when Manufacturer has the legal obligation to collect the same and will be invoiced to and paid by Purchaser, unless Purchaser provides Manufacturer with a proper tax exemption certificate. (c) Prices quoted are for goods and services only and do not include technical data, proprietary rights of any kind, patent rights, qualification, environmental or other than Manufacturer’s standard tests unless expressly agreed to in writing by Manufacturer. (d) All quotations are valid for thirty (30) days, and expire thereafter, unless extended by a written agreement between the parties.

3. PAYMENT TERMS. All commercial orders are subject to pre-payment before the product will be shipped. Specific arrangements may be made for payment terms of net thirty (30) days upon application and subsequent approval prior to the shipment of goods. C.O.D. or other prepayment terms may be required at the discretion of the Manufacturer by written notification to Purchaser. The Manufacturer reserves the right to charge interest at 1.5% per month on all overdue balances.

The Manufacturer reserves a purchase money security interest in the goods sold hereunder and the proceeds thereof, in the amount of the purchase price. In the event of default by Purchaser on any of its obligations to Manufacturer, Manufacturer shall have the right to repossess the goods sold hereunder without liability to Purchaser. This security interest will be satisfied by payment in full. Purchaser shall cooperate fully with Manufacturer to execute such other documents and to accomplish such filings and/or recordings thereof as Manufacturer may deem necessary for the protection of Manufacturer’s interests in the goods furnished hereunder.

4. CHANGES/CANCELLATION. Cancellation of an order may be made in writing within twenty-four (24) hours of order placement. Constructive changes may be made to an order, but any such changes shall be agreed to, in writing, between the parties prior to the shipment of goods. The Manufacturer reserves the right to stop work until agreement is reached on cost and schedule impact of the constructive changes requested by the Purchaser and the Purchaser accepts there may be some impact on delivery schedule as a consequence of such constructive changes.

If the Purchaser cancels their purchase order or any portion thereof, written notice must be issued prior to the intended date of cancellation. If cancelled after the twenty-four (24) hour period, the Purchaser agrees to reimburse and pay the Manufacturer for the full price of finished goods, all inventory obligated to or received to fill the order, and any work-in-process as of the date of cancellation, including all costs incurred by the Manufacturer to stop work and cancel subcontracts or purchase orders in force and outstanding. The Manufacturer agrees to use reasonable efforts to attempt to obtain the best available terms possible for Manufacturer’s order or contract cancellations resulting from Purchaser’s cancellation.

5. WARRANTY. Except as otherwise specified herein: (a) The Manufacturer warrants the remaining goods to be free from defects in materials and workmanship for twenty-four (24) months from shipment and under such conditions as specified in Manufacturer’s warranty for the individual items. (b) Any purchaser wishing to return goods for repair must first contact the manufacturer and procure an RMA number under which to return the goods. (c) All goods found to be defective shall be returned, freight and insurance prepaid, to Manufacturer’s office, as designated on the face hereof. Manufacturer will incur the return shipping costs from the original ship to point when goods have been determined to be under warranty. All non-warranty goods will be shipped from the original ship to point at the expense of the Purchaser. Manufacturer shall not be liable for additional transportation costs arising from the goods having been shipped from a location remote from the original one. Purchaser shall obtain return authorization from Manufacturer before returning any goods. The Manufacturer shall not bear responsibility for damage or loss to goods not properly prepared for transportation. (f) If it is found the Manufacturer’s goods have been returned without cause and is still serviceable, Purchaser will be notified and the goods returned at Purchaser’s expense, freight collect. In addition, a charge for testing and examination and/or for reimbursement of shipment costs paid by the Manufacturer under subsection (e) above, may, at Manufacturer’s sole discretion, be made on goods so returned which such charges shall also be payable by the Purchaser.

Manufacturer’s liability under, for breach of, or arising out of this agreement and/or sales will be limited to repair or replacement of any defective goods or a refund of the purchase price of the goods, at Manufacturer’s sole discretion. In no event will Manufacturer be liable for costs or procurement of substituted goods by Purchaser, nor will Manufacturer be liable for any special, consequential, incidental or other damages (including without limitation loss of profit) whether or not Manufacturer has been advised of the possibility of such loss, however caused, whether for breach or repudiation of contract, breach of warranty, negligence or otherwise. The essential purpose of this provision is to limit the potential liability of Manufacturer arising out of this agreement and or sale.

6. SUBSTITUTIONS AND MODIFICATIONS. Manufacturer will have the right to make substitutions and modifications in the specifications of goods sold by Manufacturer, provided that such substitutions or modifications will not materially and adversely affect overall product performance. Modifications internal to the product, which do not affect performance or appearance in a significant way, can be made solely at the discretion of the Manufacturer.

7. MANUFACTURER’S RIGHT TO SUB-CONTRACT. Manufacturer may subcontract any portion of the work on any item subject to this agreement, but Manufacturer’s obligations and rights hereunder shall not thereby be limited or affect

8. COMPLIANCE WITH U.S. EXPORT AND RE-EXPORT CONTROL REGULATIONS. It is the policy of the Manufacturer to strictly comply with U.S. export control laws. Furthermore: (a) Purchaser shall not sell or otherwise transfer any goods or technology to, or for the use of, any ultimate purchase with which Manufacturer could not do business under the laws or regulations of the United States, including without limitation, the regulations of the U.S. Departments of Commerce, Defense, Energy, State and Treasury. Purchaser shall also comply with all other laws and regulations of the United States relating to the sales or transfer of Manufacturer’s goods or technology. (b) Purchaser agrees that it will not sell, divert, transfer or disclose Manufacturer’s goods or technology to a country or countries embargoed by the United States or any prohibited entities unless authorized by the United States Government. (c) The applicable U.S. restrictions vary depending on the specific product or technology involved and its destination. In some cases, U.S. laws and regulations require U.S. authorization for the sale, transfer, required for the disclosure through oral, visual, written or other means to other parties of Seller’s technology related to the design, development, manufacture, operation, maintenance, or repair of Manufacturer’s goods. (d) Willful violation of such regulations shall be considered just cause for the immediate and unqualified cancellation of this agreement by Manufacture without any liability of Manufacturer. (e) Purchaser agrees to immediately transmit any information that may come to its attention concerning violations of such regulations by Purchaser’s customers. (f) When Purchaser is uncertain about the obligations imposed by U.S. laws or regulations, Purchaser agrees to obtain clarification from the appropriate U.S. Government agency.

9. PROPRIETARY RIGHTS. The sale of the goods hereunder to Buyer shall in no way be deemed to confer upon Purchaser any right, interest, or license in any patents or patent applications or copyrights Manufacturer may have covering the goods. Manufacturer retains for itself all proprietary rights in and to all design, engineering details, and other data and materials pertaining to any goods supplied by Manufacturer and to all discoveries, inventions, patents and other proprietary rights arising out of the work done by Manufacturer in connection with the goods or with any and all products developed by Manufacturer as a result thereof, including the sole right to manufacture any and all such products. Buyer shall take all reasonable precautions to protect confidentiality of such information.

10. SHIPMENT. Purchaser acknowledges that the purchase requires a build to order production process that requires a specific lead time for each individual order. Manufacturer’s order confirmation will state the delivery schedule. Manufacturer delivery dates are approximate and subject to reasonable efforts. Acceptance of the order by the Purchaser constitutes acceptance of the proposed delivery schedule and is a direct waiver of all claims due to delay in delivery.

11. FORCE MAJEURE. Manufacturer shall not be liable for any default or failure to deliver under the purchase order due to acts of God, fire, and flood or other natural calamities, strikes, riots, civil commotion, freight embargoes, to any act of the American Government, or to any other causes whatsoever that are beyond the immediate and direct control of Manufacturer.

12. TRANSPORTATION AND RISK OF LOSS. Unless otherwise agreed to in writing by Manufacturer, all transportation and risk of loss shall be at the expense of Purchaser, Manufacturer reserving the right to ship goods freight collect and to select the means of transportation and routing. Unless otherwise advised, Manufacturer will not insure the goods and, all such freight and insurance costs shall be for Purchaser’s account. Risk of loss or damage shall pass to Purchaser upon shipment of goods by the transportation company at the FOB Bozeman, MT pickup point.

Confiscation or destruction of, or damage to goods shall not release, reduce, or in any way affect the liability of Purchaser therefore. Notwithstanding any defect of non-conformity, or any other matter, such risk of loss shall remain with Purchaser until the goods are returned at Purchaser’s expense to such place as Manufacture may designate in writing. Purchaser, at its expense, shall fully insure goods against all loss or damage until Manufacturer has been paid in full therefore, or the goods have been returned, pursuant to Manufacturer’s consent and the provisions of paragraph 15 below, to Manufacturer.

13. INSPECTION AND ACCEPTANCE. Purchaser shall have the right to inspect the goods upon delivery. Failure of Purchaser to inspect the goods and give written notice to Manufacturer of any alleged defect of non-conformity within thirty (30) days after delivery shall constitute an irrevocable acceptance by Purchaser of the goods delivered. Use of any such goods by Purchaser, its agents, employees, licenses, for any purpose after delivery thereof, shall constitute acceptance of the goods by Purchaser.

14. RETURNS. Goods may be returned within thirty (30) days for reason of a defective part only, no other returns will be accepted. The goods or parts thereof sold herein may in no case be returned to Manufacturer without first obtaining Manufacturer’s consent. The request for return and credit must be filed with Manufacturer and shall include purchase order number, approximate date shipped, and any and all other identifying numbers (such as invoice number, date of invoice, PO numbers, etc). Each request for return of goods for credit should state the type and quantity of goods, the part numbers, and the reasons for the return. If return authorization is granted, goods shall be returned in a clean, well-packaged condition. No credit allowance on defective items will be made and no replacement for defective items will be shipped in any event, unless the alleged defective items are among other things, established to Manufacturer’s satisfaction after suitable testing and inspection by Manufacturer.

15. BANKRUPTCY OR INSOLVENCY OF BUYER. If the financial condition of Purchaser at any time is such as to give Manufacturer, it its judgment, reasonable grounds for insecurity concerning Purchaser’s ability to perform its obligations under this agreement, Manufacturer may (a) by notice in writing to Purchaser, cancel this agreement, without judicial intervention or declaration of default of Purchaser and without prejudice to any right or remedy which may have accrued or may accrue thereafter to Manufacturer (b) require full or partial payment in advance and suspend any further deliveries (or continuance or the work to be performed by Manufacturer) until such payment has been received or (c) may shipments C.O.D. or other prepayment terms specified by Manufacturer.

16. PRECEDENCE. These Terms and Conditions override any conflicting terms and conditions on Purchaser’s purchase orders unless agreed to in writing by Manufacturer.

17. APPLICABLE LAW. These Terms and Conditions shall be governed and interpreted in all respects by the laws of the State of Montana except for any law of the State of Montana which designates the law of another jurisdiction as applicable.

Copyright Quantum Composers Inc. 2014 V2.0 1/15/14

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