Common use of Sampling Clause in Contracts

Sampling. (1) If the Agreement provides for inspection by sampling, conformance of supplies subject to warranty shall be determined by the sampling procedures in the Agreement. The Company— (A) May, for sampling purposes, group any supplies delivered under this Agreement; (B) Shall use a sample of the size required by the sampling procedures for the quantity of supplies on which warranty action is proposed; (C) May project warranty sampling results over supplies in the same shipment or in other shipments; and (D) Need not use the same lot size as on original inspection or reconstitute the original inspection lots. (2) Within a reasonable time after notice of any breach of the warranties the Company may exercise one or more of the following options: (A) Require an equitable adjustment in the price for any group of supplies. (B) Screen the supplies grouped for warranty action under this clause at the Seller’s expense and return nonconforming supplies to the Seller for correction or replacement. (C) Return the supplies grouped for warranty action under this clause to the Seller (irrespective of the f.o.b. point or the point of acceptance) for screening and correction or replacement. (1) The Company may, by contract or otherwise, correct or replace the nonconforming supplies with similar supplies from another source and charge to the Seller the cost occasioned to the Company thereby if the Seller— (A) Fails to deliver corrected or replaced supplies within the time established for their return; or (B) Fails either to accept return of the nonconforming supplies or fails to make progress after their return to correct or replace them so as to endanger performance of the delivery schedule, and in either of these circumstances does not cure such failure within a period of 10 calendar days (or such longer period as the Company may authorize in writing) after receipt of notice from the Company specifying such failure. (2) Instead of correction or replacement by the Company, the Company may require an equitable adjustment of the price. In addition, if the Seller fails to furnish timely disposition instructions, the Company may dispose of the nonconforming supplies for the Seller’s account in a reasonable manner. The Company is entitled to reimbursement from the Seller, or from the proceeds of such disposal, for the reasonable expenses of the care and disposition of the nonconforming supplies, as well as for excess costs incurred or to be incurred.