1. Find the Problems with the Provisions May 11, 2016 Presented By:
Alan Fishel Partner Arent Fox LLP

2. Exercise 1A: Liquidated Damages
The parties’ rights, duties, and obligations with respect to liquidated damages shall be the same as those set forth in the General Contract between the Owner and the Contractor, flowed down to apply equally to this Purchase Order.

3. Exercise 1B: Liquidated Damages
The time of Seller’s performance is of the essence. Seller agrees to reimburse Contractor for any and all liquidated and actual damages that may be assessed by Owner against Contractor, or that Contractor may otherwise incur that may relate to Seller’s alleged failure to perform the Work required by this Contract within the time fixed or in the manner provided for herein.
Seller also agrees to pay Contractor upon demand any increased costs or other damages Contractor may sustain by reason of Seller’s alleged delay or other failure, whether or not liquidated or actual damages are assessed by Owner.

4. Exercise 2: Warranty
Vendor warrants that the equipment supplied hereunder shall be of the best quality, shall be fit and appropriate for the purposes intended, and shall strictly conform to the provisions, specifications, performance standards, drawings, samples or other descriptions contained herein, in the Prime Contract, or as otherwise set forth.
Vendor warrants equipment against defects in design, workmanship and materials and guarantees that the equipment will achieve the performance requirements defined in the Contract Documents for a minimum of one year after Owner’s acceptance of the project.
If, after the date for commencement of warranties, Contractor believes that any work is not in accordance with this Agreement, Vendor shall correct such work immediately after receipt of written notice, and the applicable warranty period shall be extended 12 months from the performance of the corrected work.
The cost of all labor, materials and expenses associated with work required to restore equipment to the requirements of this Agreement will be borne solely by the Vendor.

5. Exercise 3: Indemnification
Seller obligates itself to Contractor, Contractor’s surety, Owner and any other party required to be indemnified under the Prime Contract, and their officers, directors, employees, agents, representatives, invitees, contractors, and subcontractors, jointly and severally, as follows:
(a) to defend, indemnify, and hold them harmless from any and all claims, suits, liability, losses, expenses or damages for any actual or alleged infringement of any intellectual property right relating to Seller’s operations or this Contract;
(b) to defend, indemnify and hold them harmless from any and all claims, suits, liability, losses, expenses or damages relating to property, including loss of use, injuries to persons, including death, and from any other claims, suits, liability, losses, expenses or damages relating to Seller’s goods or operations regardless of fault, unless the fault is the sole negligence of the party to be indemnified.
(c) to defend, indemnify, and hold them harmless from any and all claims, suits, liability, losses, expenses or damages relating to the materials provided by Seller, including in connection with any liens or encumbrances in the materials.

6. Exercise 4: Limitation of Liability
NEITHER CONTRACTOR NOR SELLER WILL BE LIABLE TO THE OTHER PARTY FOR ANY CONSEQUENTIAL DAMAGES, INCLUDING ANY DAMAGES FOR FAILURE TO PAY AMOUNTS OWED FOR THE EQUIPMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR IF SUCH POSSIBILITY WAS REASONABLY FORESEEABLE, OTHER THAN WITH RESPECT TO ANY BREACH OF THE CONTRACT BY SELLER THAT CAUSES HARM TO OWNER OR ANOTHER THIRD PARTY.
THE MAXIMUM LIABILITY THAT CONTRACTOR SHALL HAVE TO SELLER THROUGHOUT THE ENTIRE TERM OF THIS CONTRACT FOR ANY AND ALL CLAIMS, AT ANY AND ALL TIMES (AND REGARDLESS OF HOW MANY SEPARATE CLAIMS ARISE DURING THE COURSE OF THIS CONTRACT) SHALL EQUAL THE AMOUNT THAT SELLER HAS RECEIVED FROM CONTRACTOR UNDER THIS CONTRACT DURING THE 12 MONTH PERIOD IMMEDIATELY PRECEDING THE FIRST CLAIM BROUGHT UNDER THIS CONTRACT.

7. Exercise 5: Payment
With respect to any invoice properly and timely submitted by Vendor, Purchaser shall pay any undisputed amounts within 30 business days of Purchaser’s receipt of full payment from Owner.
Purchaser may, in addition to any other rights under this Agreement, withhold payment of all or a portion of any invoiced amount as and to the extent that may be reasonably necessary to protect Purchaser or Owner from loss due to costs, expenses and other amounts that may be incurred by Purchaser or Owner (i) in correcting defects or deficiencies not remedied by Vendor in accordance with this Agreement; (ii) for the removal of liens or other encumbrances filed in connection with the Work by Vendor, Subcontractors or any other Person or Entity acting through or under any of them, which Vendor has failed to discharge; (iii) to procure, due to Vendor’s failure to procure, insurance coverage Vendor is required to provide under this Agreement; (iv) for liquidated damages or any other damages or claims Purchaser or Owner may have against Vendor in accordance with this Agreement; and (v) for any claims, suits, or actions related to work performed on the project.

8. If you have any questions, please contact:
Alan Fishel Partner Arent Fox LLP