Common use of Defective deliveries Clause in Contracts

Defective deliveries. 4.9.1 Dealing with faulty units before dispatch If it becomes obvious that agreements made (e.g. in respect of quality criteria, deadlines, delivery quantities) cannot be adhered to, the Supplier undertakes to inform the Customer. If defective parts are found within the framework of manufacturing or outgoing goods inspections, these parts must be marked immediately and stored in a restricted area. The cause of the defect must be established and the process must be corrected. All parts manufactured since the last "correct" inspection must be subjected to a 100% inspection. Reworked batches must be inspected again, released and marked accordingly. In all cases, reworking requires a release by the Customer. If, in exceptional cases, parts are delivered, which do not conform to the specifications, a written release must be obtained from the Customer in respect of the specific number of parts and/or for a specific period of time. In consultation with the Customer, the parts which do not conform to the specifications, must be marked accordingly. Irrespective of the result of a special release, the Supplier shall carry out precise defect analyses for the purpose of determining the cause of the defect and introducing corrective measures. 4.9.2 Dealing with defective units on the premises of the Customer The Customer tests the products purchased by the Supplier when delivered and solely in respect of their quantity and identity and externally visible damages. To this extent, the Customer waives objections of delays in the notification of defects. As soon as the Customer recognizes defects in the goods supplied, it will inform the Supplier. This shall take place in written form and by means of a test report. If necessary, the Supplier will receive advance information of the defect (photo, etc.) and can request, at its expense and for the purpose of analysis, samples of the parts for which a complaint has been made. If the supplied goods are defective, the Supplier shall immediately carry out remedial action (delivery of re- placements, sorting work or reworking). The following possibilities exist: o immediate return of the entire consignment o sorting and reworking on-site by the Supplier o sorting and reworking on-site by the Customer Insofar, in the relationship between the Customer and the end customer, as there is a risk of delay in delivery, the Supplier is obliged to carry out immediately the inspection, sorting and/or reworking activities on the Cus- tomer's premises. If there is a risk of delay, or if the carrying out of such work by the Supplier would be disproportionate (distance, time), the Customer itself is entitled to carry out the measures at the Supplier's expense or to instruct third parties to do this. 4.9.3 Feedback relating to complaints In the event of complaints, the Customer shall, without asking, receive the respective 8D report on the correc- tive measures introduced within the deadlines stated in the inspection report. Immediate measures (D3) must be implemented within 24 hours and must be reported to the customer. All additional measures (up to D7) must be introduced within 14 days and indicated via the 8D report. Deviating deadlines (e.g. in the case of longer-term measures) can be agreed with the Customer. In the event of major quality problems, the Customer has a right to demand the appearance of one of the Supplier's contact persons within 24 hours and on-site. If there are acute supply bottlenecks or the risk of a delivery stop the Customer is entitled to have a "resident engineer", selected by the Customer, at the Suppli- er's site. In particular, the "resident engineer" has the right and the task to observe the manufacturing process, to record problems, interruptions to production and the reasons for these and to work towards an improvement in quality.

Defective deliveries. 4.9.1 4.10.1 Dealing with faulty units before dispatch If it becomes obvious that agreements made (e.g. in respect of quality criteria, deadlines, delivery quantities) cannot be adhered to, the Supplier undertakes to inform the Customer. If defective parts are found within the framework of manufacturing or outgoing goods inspections, these parts must be marked immediately and stored in a restricted area. The cause of the defect must be established and the process must be corrected. All parts manufactured since the last "correct" inspection must be subjected to a 100% inspection. Reworked batches must be inspected again, released and marked accordingly. In all cases, reworking requires a release by the Customer. If, in exceptional cases, parts are delivered, which do not conform to the specifications, a written release must be obtained from the Customer in respect of the specific number of parts and/or for a specific period of time. In consultation with the Customer, the parts which do not conform to the specifications, must be marked accordingly. Irrespective of the result of a special release, the Supplier shall carry out precise defect analyses for the purpose of determining the cause of the defect and introducing corrective measures. 4.9.2 4.10.2 Dealing with defective units on the premises of the Customer The Customer tests the products purchased by the Supplier when delivered and solely in respect of their quantity and identity and externally visible damages. To this extent, the Customer waives objections of delays in the notification of defects. As soon as the Customer recognizes defects in the goods supplied, it will inform the Supplier. This shall take place in written form and by means of a test report. If necessary, the Supplier will receive advance information of the defect (photo, etc.) and can request, at its expense and for the purpose of analysis, samples of the parts for which a complaint has been made. If the supplied goods are defective, the Supplier shall immediately carry out remedial action (delivery of re- placements, sorting work or reworking). The following possibilities exist: o immediate return of the entire consignment o sorting and reworking on-site by the Supplier o sorting and reworking on-site by the Customer Insofar, in the relationship between the Customer and the end customer, as there is a risk of delay in delivery, the Supplier is obliged to carry out immediately the inspection, sorting and/or reworking activities on the Cus- tomer's premises. If there is a risk of delay, or if the carrying out of such work by the Supplier would be disproportionate (distance, time), the Customer itself is entitled to carry out the measures at the Supplier's expense or to instruct third parties to do this. 4.9.3 4.10.3 Feedback relating to complaints In the event of complaints, the Customer shall, without asking, receive the respective 8D report on the correc- tive measures introduced within the deadlines stated in the inspection report. Immediate measures (D3) must be implemented within 24 hours and must be reported to the customer. All additional measures (up to D7) must be introduced within 14 days and indicated via the 8D report. Deviating deadlines (e.g. in the case of longer-term measures) can be agreed with the Customer. In the event of major quality problems, the Customer has a right to demand the appearance of one of the Supplier's contact persons within 24 hours and on-site. If there are acute supply bottlenecks or the risk of a delivery stop the Customer is entitled to have a "resident engineer", selected by the Customer, at the Suppli- er's site. In particular, the "resident engineer" has the right and the task to observe the manufacturing process, to record problems, interruptions to production and the reasons for these and to work towards an improvement in quality.