COSTCO WHOLESALE TERMS AND CONDITIONS
PURCHASE ORDER - GOODS
1. Definitions. “Costco” means Costco Wholesale Corporation and its affiliates, including affiliates located within the United States of America and Canada. “Supplier” means the person or entity to which this Purchase Order is addressed, including Supplier’s principal if Supplier is acting as a broker or agent. “Purchase Order” means this Purchase Order, including all terms and conditions contained herein, and all specifications issued hereunder. “Product(s)” means all goods, services, articles, equipment, materials, or other property or services that are the subject of this Purchase Order. “Costco Premises” means any, all, and/or a portion of Costco’s warehouses, offices and/or depots located in either the United States of America or Canada.
2. P.O. & Item Number. Supplier shall mark all invoices, bills of lading, packing lists and any other documents to show legibly the complete Supplier number and Purchase Order number to which they relate.
3. Price Changes. Prices on this Purchase Order are not subject to any increase or additional charges because of increased cost, any change in law or any other reason. Supplier must give Costco 30 days’ advance written notice of any price change on future orders.
4. Payment. Unless otherwise agreed in writing, Costco shall not be obligated to pay any undisputed invoice until 30 days after delivery. Supplier must submit all invoices to Costco within 6 months after the date the Products were supplied to Costco. In the event of a disputed invoice, Costco will pay the entire undisputed amount of the invoice and include standard remittance information and supporting documentation regarding the disputed invoice amount.
5. Delivery. Sales include delivery of the Product to Costco and Supplier’s delivery of the Product will occur and title and risk of loss will pass to Costco only when and to the extent Product conforming with the terms of this Purchase Order has been received at the Costco Premises designated in this Purchase Order and a Costco employee (a) signs the bill of lading; (b) provides an electronic receipt acknowledging receipt of Product; or (c) signs other shipping documents acknowledging Costco’s receipt of Product. Supplier will be responsible for making all claims with the carrier for any losses or damages and/or rework expenses regardless of whether Costco arranges carriage, designates the carrier and/or pays the freight.
6. Shipment; Right to Cancel. For freight prepaid shipments, Costco may at any time cancel any shipment not actually received by Costco by the “Arrival Date” shown on this Purchase Order, without cost to or further obligation by Costco. For freight collect shipments, Costco may cancel any shipment not ready for scheduled pickup at Supplier’s facility on the “Ship Date” shown on this Purchase Order, without cost to or further obligation by Costco. Supplier shall notify Costco immediately if any shipment will not arrive by the Arrival Date or will not be ready for the scheduled pickup. Supplier may ship backorders and late shipments only to the extent authorized in writing by Costco and only on a freight prepaid basis at Supplier’s expense.
7. Compliance with Laws. Supplier represents and warrants to Costco that all Products will be manufactured, processed, packaged, labeled, shipped, marketed and sold in compliance with all applicable industry standards and all applicable laws (collectively “Laws”). Supplier further represents and warrants that its business practices and operations pertaining to this Purchase Order are and shall remain in compliance with all applicable Laws. Laws shall include without limitation, laws relating to labor, health, safety, privacy, cybersecurity, anti-spam, consumer protection, finance, information technology, import and export controls, immigration, environment, toxic substances, serial and identification numbers, labeling, language, recycling stewardship, country of origin designation, Customs requirements, transportation, hazardous substances and the environment in the applicable jurisdiction.
8. Ability to Sell. Supplier represents and warrants to Costco that: (a) Costco’s purchase of the Product will not violate the rights of any third party; (b) the Product is without defects and has adequate warnings and instructions; (c) Supplier is not a party to any agreement, and there is no other impediment or restriction that limits, prohibits or prevents Supplier from selling and delivering the Product to Costco, or limits, prohibits or prevents Costco fromfully performing its obligations under this Purchase Order; and (d) the Product is not subject to any antidumping duty or countervailing duty investigation or order in any country where Product is manufactured and/or sold. Without limiting any other remedies, Costco may cancel any Purchase Order for Product that is or becomes the subject of an antidumping duty or countervailing duty investigation or order. Supplier represents it is fully aware of, and agrees to comply with, California Proposition 65. Supplier shall provide Costco a current Safety Data Sheet (“SDS”) that meets the requirements of OSHA regulations and California Admin. Code, 8 CCR § 5194, or a statement from the manufacturer that no SDS is legally required for the Product or any similar form required by the relevant jurisdiction. Supplier shall also transfer to Costco the warranties on goods and services incorporated into the Product.
9. Rejection/Product Return. Costco, at its option may, at any time, reject (or revoke acceptance of) and either return to Supplier or hold at Supplier’s risk and expense, any Product or shipment or portion thereof that Costco determines: (a) is nonconforming with the terms and conditions of this Purchase Order in any way, (b) is shipped contrary to Costco’s instructions, (c) is in excess/short of the quantities covered by this Purchase Order, (d) is the subject of a recall/safety notice, (e) allegedly contains any defect or inadequate warnings, instructions, or safety guards, (f) allegedly violates any Laws or fails to meet any applicable governmental/industry standards, (g) allegedly fails to comply with any customs requirements, or (h) allegedly infringes any patent, trade name, trade secret, trade dress, trademark, copyright, privacy rights or other right of any third party. Payment of any invoice does not limit Costco’s right to reject or revoke acceptance. Supplier hereby assumes all risks and expenses of unpacking, examining, repacking, storing, holding and/or reshipping and/or returning any such Product, and shall reimburse Costco its net landed cost for such Product, in addition to any other remedies available to Costco. In the event Supplier’s payment terms include a cash discount, Costco will refund Supplier only the amount it paid for the Product if Costco rejects/revokes acceptance. In the event Costco cancels this Purchase Order, rejects or revokes any Product, or exercises its rights to refund or offset, Costco shall not be liable to Supplier for any costs or damages of any kind.
10. Refund; Offsets. At Costco’s option, Supplier shall grant a full refund to Costco or, if Costco so elects, issue a credit or replacement with respect to any shipment, Product or portion thereof that Costco rejects, returns or revokes acceptance of. Costco may also offset costs associated with defective packaging, monies owed for regulatory fines or penalties (including associated legal fees), any rebates/incentive allowances, the cost of processing third party subpoenas and any other amounts owed or to be owed by Supplier against amounts Costco owes to Supplier. Costco may for any reason hold back a reasonable reserve for future claims against amounts owed, including but not limited to reasonable anticipated arbitration/litigation expenses. Supplier shall pay to Costco any outstanding balance if one remains after such offset.
11. Indemnification. To the fullest extent permitted by law, Supplier shall defend, hold harmless and indemnify Costco and its employees, agents and representatives from and against any and all claims, suits, actions, demands, damages liabilities, losses, fines, penalties, costs and expenses arising out of any purchase of Product and including without limitation any of the following: (a) any actual or alleged infringement or misappropriation of any intellectual property or proprietary right relating to any Product, including but not limited to any patent, trademark, trade name, trade dress, copyright or other right relating to the Product; (b) any actual or alleged breach of this Purchase Order; (c) any actual or alleged injury to any person, damage to any property, or any other damage or loss, by whomsoever suffered, claimed to result in whole or in part from: (i) the Product, (ii) any actual or alleged defect in the Product, whether latent or patent, including without limitation any alleged failure to provide adequate warnings, labeling, packaging or instructions, or (iii) the shipping, delivery and/or unloading of the Product by Supplier, its agent or representative, at Costco Premises; (d) any actual or alleged violation of any Laws relating to the Product, or to its manufacture, shipment, import, labeling, weights and measurements, use or sale, or any failure to provide a Safety Data Sheet or certification; (e) any other act, activity or omission of Supplier or any of its affiliates, employees, representatives, agents or contractors, including activities at Costco Premises, and the use of any vehicle, equipment, fixture or material of Supplier in connection with any sale to or service for Costco; (f) use of the Product by Costco including any of its employees, agents, subcontractors, independent contractors, representatives, members, vendors and/or customers; and/or (g) Supplier’s failure to pay any third party for any amounts due and owing for materials, equipment, supplies, transport or services performed in connection with the Product and/or this Purchase Order. The representations, warranties, indemnities and obligations of Supplier under this Purchase Order shall not be affected in any way by: (a) Costco’s acceptance of Product; (b) Costco’s extension of warranties to its customers, employees, agents, subcontractors, independent contractors, representatives, members and/or vendors; (c) Costco’s approval of Product samples, labels, packaging or other specifications; (d) Costco’s approval of tests and inspections; or (e) any act or omission of Costco.
12. Insurance. Supplier shall maintain, at its expense, a policy or policies of: Commercial General Liability Insurance with a minimum of $5,000,000 each occurrence; $5,000,000 General Aggregate limit and $5,000,000 Products and Completed Operations Aggregate limit written on an occurrence form. Suppliers whose employees enter Costco Premises for business are also required to have: (a) Workers’ Compensation Insurance with statutory limits and Employers’ Liability Insurance (Stop-Gap Liability Insurance in monopolistic State Workers Compensation Fund states) with minimum limits of $1,000,000 per accident/occurrence for bodily injury and property damage and (b) Automobile Liability Insurance with $1,000,000 per accident for bodily injury and property damage limits for each accident. Supplier shall deliver to Costco Certificate(s) of Insurance at all times naming Costco Wholesale Corporation as Additional Insured. Supplier’s insurers must be Best’s rated B+, VII (or the equivalent) or better. Policy limits may not be reduced, terms changed, or any policies canceled with less than 30 days’ prior written notice to Costco. It shall be the responsibility of Supplier to ensure that all of its agents, subcontractors, independent contractors and representatives comply with this Section.
13. Recalls. In the event the Product is the subject of a recall (including safety or quality or similar notices) or other action required to bring the Product into compliance with this Purchase Order (whether initiated by Costco, Supplier, or a government or consumer protection agency), Supplier shall be responsible for all associated costs and expenses. Supplier shall promptly reimburse Costco for all such costs and expenses incurred by or for Costco, including without limitation recalling, , storing, shipping, destroying or recycling the Product (and where applicable, any products with which the Product has been processed, packaged, combined or commingled), including Costco’s net landed cost of Product.
14. Taxes. Costco’s purchase of Product(s) is for use by Costco, including its employees, agents, subcontractors, independent contractors, representatives, members, vendors and/or customers, unless Costco otherwise states in writing. Supplier’s pricing invoice will itemize all sales, use and like taxes. Supplier’s invoicing Costco for any tax or fee shall constitute a warranty that Supplier is duly registered with the agency which levies the tax or fee. If Supplier does not remit the invoiced tax or fee to the appropriate agency, and/or if the same tax or fee is subsequently assessed by the agency against Costco, Supplier shall reimburse Costco for all amounts of tax or fee Costco has remitted to Supplier to date and Supplier shall defend, indemnify and hold harmless Costco against all losses, fines, penalties, interest and expenses (including attorneys’ fees).
15. Disputes and Arbitration. All disputes that (1) are between Supplier and Costco or either’s subsidiaries, parents, affiliates, officers, directors and/or employees, and (2) arise out of or relate to this Purchase Order or any applicable Law, between Supplier and Costco shall be arbitrated under the Commercial Arbitration Rules of the American Arbitration Association (“AAA”), in English at Seattle, Washington, before one neutral arbitrator who shall be a member of the AAA’s Large Complex Case Panel. The arbitrator may award interim and final injunctive relief and other remedies, but not punitive or similar damages. Notwithstanding the above, Costco or Supplier may bring court proceedings against each other (a) solely as part of separate litigation commenced by a third party, or (b) if not first sought from the arbitrator, solely to obtain in the state or federal courts in King County, Washington, injunctive relief or other interim remedies. The exercise of any remedy herein shall be without prejudice to any other right or remedy available to either party.
16. Venue; Attorneys’ Fees. Supplier consents to the personal jurisdiction and exclusive venue of the federal and state courts in King County, Washington, for any court proceeding allowed under this Purchase Order. The prevailing party in any arbitration or court action or proceeding shall be awarded its reasonable attorneys’ fees, expenses and costs.
17. Governing Law. This Purchase Order and any arbitration between Supplier and Costco shall be governed by and construed according to the laws of the State of Washington, without regard to conflicts of laws principles. The United Nations Conventions on Contracts for the International Sale of Goods and on the Limitation Period on the International Sale of Goods do not apply to this Purchase Order.
18. Severability; Assignment; Waiver. If any provision of this Purchase Order is held invalid or unenforceable, it shall be so held to the minimum extent required by law and all other provisions shall remain valid and enforceable. Any assignment of this Purchase Order without Costco’s prior written consent is void. This Purchase Order will be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective successors and all permitted assigns. The failure by either party to insist upon strict performance of any provisions in this Purchase Order will in no way diminish either party’s right to full performance at any time thereafter and a waiver by either party of a breach of any provision in this Purchase Order shall not constitute a waiver of a similar breach in the future.
19. Confidentiality. “Confidential Information” means non-public information in any format that Costco designates confidential or which ought to be treated as confidential, including information relating to Costco’s members, vendors, customers, suppliers, employees, business plans, marketing plans, product plans, processes, strategies, know-how, forecasts and/or sales or financial information. Supplier agrees, both during and after the business relationship, to hold the Confidential Information in the strictest confidence, not to disclose Confidential Information to any third party and not to use Confidential Information other than to fulfill obligations under this Purchase Order. Supplier shall give Costco notice immediately upon learning of any unauthorized use or disclosure of Confidential Information.
20. Entire Agreement. This Purchase Order is subject to Costco’s Standard Terms, and such Standard Terms supersede all terms in Supplier’s invoices and other forms, and all prior oral or written communications and agreements, unless the parties have executed an agreement for the Products, in which case this Purchase Order is subject to the terms provided in such agreement. Neither party is entering into this Purchase Order in reliance on any oral or written promises or understandings. Costco shall not be bound by any term, condition or other provision that is different from or in addition to the provisions of this Purchase Order and submitted by Supplier in any invoice, confirmation, correspondence or otherwise. If this Purchase Order is deemed to constitute acceptance of an offer, such acceptance is expressly made conditional on Supplier’s assent to the terms of this Purchase Order, and shipment of any Products or other commencement of performance constitutes such assent.These Terms and Conditions may be updated by Costco from time to time and Supplier shall review the applicable terms and conditions for the invoice.
21. No Publicity. Supplier shall not, without the prior written consent of Costco, refer to Costco or any of its affiliates as Supplier’s customer in any media or in any manner in press releases, advertising or other public or promotional statements in any media format.