Common use of Acceptance and Rejection of Products Clause in Contracts

Acceptance and Rejection of Products. (a) Promptly following receipt of Product, Magenta shall have the right but not the obligation to test such Product to determine compliance with the Specifications. Magenta shall have [***] after receipt of the Product to notify Bachem in writing of any rejection of Product based on a sufficiently documented claim that the Product fails to meet the Specifications. In the event that Magenta does not inform Bachem within the [***] period that the Product does not meet the Specifications, Magenta shall be deemed to have accepted the Product. If there is no dispute between the Parties over a claim that the Product fails to meet the Specifications, Bachem shall (i) replace or (ii) with Magenta’s prior written consent, reprocess or rework the rejected Product within an agreed upon time frame, after the notice of such rejection, and in any case as soon as reasonably possible after receiving such notice, provided that Magenta shall, at Bachem’s expense, provide to Bachem sufficient quantities of supplies required to be supplied by Magenta under the relevant Project Plan, at no additional cost to Magenta (including transportation costs), and Bachem shall make arrangements with Magenta for the return or disposal of any rejected Product, such return shipping or disposal charges to be paid by Bachem. In the event of a discrepancy between Magenta’s and Bachem’s test results such that one Party’s test results fall within relevant Specifications and the other Party’s test results fall outside the relevant Specifications, or there exists a dispute between the Parties over the extent to which such failure is due to acts or omissions of Bachem, the Parties shall cause an independent GMP laboratory or appropriate experts promptly to review records, test data and perform comparative tests and/or analyses on samples of the alleged defective Product. Such independent laboratory shall be mutually agreed upon by the Parties. The independent laboratory’s results shall be in writing and shall be final and binding save for manifest error. Unless otherwise agreed to by the Parties in writing, the costs associated with such testing and review shall be borne by the Party against whom the independent laboratory rules.

Acceptance and Rejection of Products. (a) Promptly following Cadista shall notify Jubilant in writing of its rejection of any Product supplied to it pursuant to this Agreement (“Rejection Notice”) as follows: (i) in the case of defects that are readily discoverable upon a physical inspection of a Product shipment, Cadista shall deliver a Rejection Notice within thirty (30) calendar days after Cadista or its designated facility has received such Product shipment, or (ii) in the case of a latent defect or any defect that was not obvious and could not be readily discovered from a physical inspection of the Product supplied (“Latent Defect”), Cadista shall deliver a Rejection Notice within thirty (30) calendar days of the date that Cadista discovers such defect. The notification by customer or a returns processor of a defect to Cadista shall be treated as the date of discovery and such defect shall be deemed a Latent Defect. In the event the Failure to provide a Rejection Notice to Jubilant within the applicable 30-day period shall constitute acceptance by Cadista of the shipment, unless mutually agreed between the two parties. (“Accepted Product”). Rejection Notices that are provided by Cadista shall state in reasonable detail (sufficient to enable Jubilant to identify the nature of the problem for tests or studies to be conducted by or on its behalf or to dispute the same) the reason why Cadista believes the Product does not conform to its Specifications and/or the Product warranties contained in Section 8.1. Cadista shall, within fifteen (15) Business Days of the delivery by Cadista of any such Rejection Notice, provide samples of the Product being rejected, if appropriate, and copies of written reports relating to tests, studies or investigations performed to date by or on behalf of Cadista on the Product being rejected. (b) Cadista’s test results or basis for rejection shall be conclusive unless Jubilant notifies Cadista within fifteen (15) Business Days of receipt by Jubilant of receipt of the above mentioned samples that it disagrees with such test results or basis for rejection. Jubilant may only assert a disagreement if it alleges that the defects were introduced by Cadista. If Cadista and Jubilant fail to agree within fifteen (15) Business Days after Jubilant’s notice to Cadista as to whether any Product identified in the Rejection Notice deviates from the Product Specifications for such Product or fails to comply fully with the Product warranties contained in Section 8.1, representative samples of the batch of the Product in question, together with mutually agreed upon questions, shall be submitted to a mutually acceptable independent laboratory or consultant (if not a laboratory analysis issue) for analysis or review. The results of such applicable independent evaluation shall be binding upon the Parties. If Jubilant and Cadista determine by agreement, or if such evaluation certifies that the Product was properly rejected by Cadista, Cadista may reject the Product in the manner contemplated by Section 6.4(d). The Party that is determined to have been incorrect in its determination of whether the Product complies fully with the Product Specifications and the Product warranties contained in Section 8.1 shall pay all of the costs of such independent evaluation, including, without limitation, laboratory fees and additional shipping and transportation costs. Should the fees associated with the work conducted by the independent laboratory or consultant be due up front, Cadista and Jubilant shall each pay fifty percent (50%) of such upfront fees; provided, that if it is determined by the independent laboratory or consultant that either Party shall have been incorrect in its determination as to whether the Product complies fully with the Product Specifications and the Product warranties contained in Section 8.1, such incorrect Party shall reimburse the other Party for such fifty percent (50%) of such fees within ten (10) Business Days of such determination by the independent laboratory or consultant, as the case may be. (c) If any order of a Product is rejected by Cadista, Cadista’s obligation to pay Jubilant in respect of the rejected Product shall be suspended until such time as the rejection is determined or otherwise agreed to be incorrect per Section 6.4(b). If only a portion of an order is rejected, only the duty to pay the amount allocable to such rejected portion shall be suspended. (d) In the event an order or partial order is rejected by Cadista pursuant to the provisions of this Section 6.4, the non-conforming shipment of a Product, Magenta or the non-conforming portion thereof, shall have be held for Jubilant’s disposition, or shall be returned to Jubilant, in each case at Jubilant’s expense, as directed by Jubilant. Jubilant shall use its Commercially Reasonable Efforts to replace the right but not non-conforming shipment of such Product, or the obligation to test such non-conforming portion thereof, with conforming Product to determine compliance with the Specifications. Magenta shall have [***] as soon as reasonably practicable after receipt of notice of rejection thereof, and in any event will do so within the Product later of forty-five (45) calendar days after receipt of notice of rejection thereof or thirty (30) calendar days of an independent testing decision in favor of Cadista, at no cost to notify Bachem in writing Cadista. Jubilant shall make arrangements with Cadista for the return or destruction, at Jubilant’s option and cost, of any rejection rejected Product. All such return shipping charges or costs of Product based on a sufficiently documented claim that the Product fails to meet the Specificationsdestruction shall be paid by Jubilant. In the event that Magenta does not inform Bachem within the [***] period that the Product does not meet the Specifications, Magenta shall be deemed to have accepted the Product. If there is no dispute between the Parties over a claim that the Product fails to meet the Specifications, Bachem shall (i) replace or (ii) with Magenta’s prior written consent, reprocess or rework the rejected Product within an agreed upon time frame, after the notice of such rejection, and in any case as soon as reasonably possible after receiving such notice, provided that Magenta shall, at Bachem’s expense, provide to Bachem sufficient quantities of supplies required to be supplied by Magenta under the relevant Project Plan, at no additional cost to Magenta (including transportation costs), and Bachem shall make arrangements with Magenta Cadista has paid for the return or disposal of any rejected Product, and such return shipping or disposal charges Product has not been satisfactorily replaced, Jubilant shall promptly extend a credit to be Cadista for the full amount paid by Bachem. In the event of a discrepancy between Magenta’s and Bachem’s test results Cadista for such that one Party’s test results fall within relevant Specifications and the other Party’s test results fall outside the relevant SpecificationsProduct, together with related costs, or there exists a dispute between the Parties over the extent to which such failure is due to acts or omissions claim and, if necessary, initiate dispute resolution in accordance with Section 6.4(b) of Bachem, the Parties shall cause an independent GMP laboratory or appropriate experts promptly to review records, test data and perform comparative tests and/or analyses on samples of the alleged defective Product. Such independent laboratory shall be mutually agreed upon by the Parties. The independent laboratory’s results shall be in writing and shall be final and binding save for manifest error. Unless otherwise agreed to by the Parties in writing, the costs associated with such testing and review shall be borne by the Party against whom the independent laboratory rulesthis Agreement.