STANDARD TERMS AND CONDITIONS OF PURCHASE

STANDARD TERMS AND CONDITIONS OF PURCHASE OF THE JOLLIBEE GROUP OF COMPANIES
(2014-PHILIPPINES)

These Standard Terms and Conditions (“STC”) shall apply to suppliers (each, a “Supplier”) of Jollibee Foods Corporation, Fresh N’ Famous Foods, Inc., Red Ribbon Bakeshop, Inc., Freemont Foods Corporation, Zenith Foods Corporation, Mang Inasal Philippines, Inc., PERF Restaurants, Inc., and other subsidiaries or affiliates of Jollibee Foods Corporation as may be specified by it (the “Buyer”).

“Goods” and “Services” shall refer to the goods and services covered by the relevant Purchase Order. Other capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Purchase Order.

 

1. TERMS OF AGREEMENT

1.1 The STC shall apply to purchases made pursuant to purchase orders, notes or instructions in the purchase order, and any appendices or drawings attached or referred to in the purchase order (collectively referred to as the “Purchase Order”) and any other document or written communication between Buyer and Supplier.

1.2 If Buyer and Supplier execute a contract in addition to the Purchase Order, the terms of the STC shall be deemed incorporated in such contract, provided that, in case of any inconsistency between the provisions of the contract and the provisions of the STC, the provisions of the contract shall prevail over those of the STC to the extent only of the inconsistency.

1.3 Supplier’s acknowledgement of the Purchase Order (whether through electronic acceptance, email, facsimile, written acknowledgment, the commencement of performance of services or delivery of goods, general fulfillment of its obligations under the Purchase Order, or otherwise) constitutes unconditional acceptance of the STC.

1.4 The STC supersedes all prior discussions between Buyer and Supplier. No communication between Buyer and Supplier shall be binding unless confirmed by Buyer in writing. No failure or delay by Buyer in enforcing any provision of the STC or in exercising any right thereunder shall constitute a waiver thereof. In order to be valid, a waiver of any provision of the STC must be expressly written in the Purchase Order, indicating the specific provision waived. The STC shall continue to be applicable unless terminated by Buyer.

 

2. FORECASTS; DELIVERY

2.1 A forecast or other indication of Buyer’s requirements is merely an estimate of Buyer’s possible order requirements for the period stated therein, and shall be used only to assist Supplier in anticipating Buyer’s future orders. It shall not be binding upon Buyer and shall not, under any circumstances, be constituted as a commitment to order. An order is confirmed only upon the issuance of a Purchase Order covering such order.

2.2 Supplier shall deliver to the Buyer the Goods or perform the Services on the date/s and place/s required by Buyer. Supplier shall not make any deliveries or perform any services before the delivery date (s) as indicated in the Purchase Order, unless advanced delivery is requested or agreed to in writing by Buyer.

2.3 Supplier shall deliver to Buyer Goods, and perform Services, that strictly comply with (i) all specifications and quality standards required by Buyer and/or accepted by Buyer as provided in the agreed quote or proposal, previously approved specification sheets, approved samples, or Purchase Order notes and instructions, and (ii) generally accepted quality standards and/or certification standards and/or industry standards applicable to such Goods or Services, including, at the minimum, applicable standards in the territory where the Goods or Services will be received.

2.4 Supplier shall pack, mark and ship the Goods in such manner as to prevent damage during transport and which facilitates unloading, handling and storage. All deliveries shall be subject to Buyer’s quality inspection and standards. Buyer may refuse receipt of Goods that are improperly packed or do not meet Buyer’s standards. Buyer may refuse to accept Services or require the cessation of Services that do not meet Buyer’s standards and requirements.

2.5 Title to the Goods, free and clear of any encumbrances, shall pass to Buyer upon delivery, unless otherwise agreed in writing by Buyer, and provided that any defect that may be discovered subsequent to inspection during delivery shall entitle Supplier to its remedies under these STC, contract and applicable laws.

2.6 Payment shall not constitute acceptance of the Goods or Services. Payment or acceptance of Goods or Services shall not relieve Supplier of any of its obligations as to Supplier’s representation and warranties, or operate as a waiver of any defect or nonconformity with Buyer’s requirements or Buyer’s rights under these STC, law, equity or contract.

 

3. PRICE AND PAYMENT

3.1 Buyer shall pay Supplier the price indicated in the Purchase Order, which shall be inclusive of Value Added Tax, any sales tax, and any other taxes on the sale of the Goods or Services. All duties shall be for Supplier’s account unless otherwise stated in the Purchase Order. All payments to Supplier shall be subject to withholding taxes as required by applicable laws.

3.2 Payments may be made through electronic funds transfer. Supplier shall comply with any enrolment and/or registration process that may be required by Buyer for purposes of processing electronic payments to Supplier.

3.3 Buyer shall pay Supplier for the Goods or Services ordered and delivered/performed within thirty (30) days from the latest of (i) Buyer’s receipt of the specified quantity of the Goods or Services; (ii) the date on which the correct Sales Invoice is duly received by Buyer, and (iii) Buyer’s written acceptance of all Goods and/or Services.

3.4 Supplier shall submit the Sales Invoice, Delivery Receipt and any other document required by Buyer to process payment to Buyer no later than sixty (60) days from complete delivery of the Goods or performance of the Services, failing which, Supplier shall be deemed to have waived the right to collect payment from Buyer.

3.5 Buyer may, at any time, offset any amounts Supplier owes to Buyer or any of its affiliates or subsidiaries, against amounts Buyer or any of its affiliates or subsidiaries may owe to Supplier.

 

4. RIGHT TO INSPECT, AUDIT AND REQUIRE ADDITIONAL DOCUMENTATION

4.1 Buyer shall have the right to inspect, examine or test the Goods at any reasonable time and place. The Buyer shall have the right at any time to conduct a site visit to verify warehouse conditions, production quality and quantity, and compliance with Buyer’s requirements.

4.2 Inspection, testing, site visits, and any other investigation or accreditation by Buyer shall not relieve Supplier of any of its obligations as to Supplier’s representations and warranties, nor constitute acceptance or approval of the Goods or Services, nor operate as a waiver of any defect or nonconformity with Buyer’s requirements. Buyer may, at any time, resort to its rights or remedies under these STC, law, equity or contract.

4.3 Supplier and its subcontractors (if Supplier is allowed to subcontract), shall keep accurate records and books of accounting showing all charges and related expenses incurred to produce the Goods or perform the Services. Said records shall be maintained in conformance with generally accepted accounting principles and procedures. Buyer (or outside parties designated by Buyer) shall have the right to inspect such records and perform audits for one (1) year from the date of delivery, on Supplier’s or its subcontractors’ premises during business hours.

4.4 Supplier shall submit such independent third party certifications as may be required by Buyer to substantiate compliance of the Goods and/or Services with Buyer’s standards and/or generally accepted quality standards, provided that, the submission of such certifications shall not relieve Supplier of any of its obligations under these STC or operate as a waiver of any of Buyer’s rights hereunder.

 

5. ASSIGNMENT; SUBCONTRACTING

5.1 Supplier shall not, whether in whole or in part, assign or subcontract any of its obligations under the Purchase Order to any third party without the prior written consent of Buyer, which Buyer may withhold for any reason. If Supplier is permitted to subcontract any of its obligations, it shall remain fully responsible and liable for the proper performance of its obligations under the Purchase Order. Supplier shall ensure that its contract with its subcontractor allows Buyer, at Buyer’s sole option, to exercise Buyer’s rights under these STC against Supplier’s subcontractors, but in no case shall this absolve Supplier from any direct liability to Buyer as provided above.

5.2 Buyer may assign any Purchase Order to any of its affiliates or subsidiaries or to any third party in connection with any merger, acquisition, re-structuring, disposal, change of control, or sale or other transaction in relation to all or substantially all or part of Buyer’s business and/or assets upon written notice to Supplier.

5.3 Any assignment or subcontracting in violation of this Section shall be void. If Buyer gives its consent to assignment, Supplier shall ensure that the assignment is implemented at its sole cost and without any disruption in the operations of Buyer or deterioration in service levels.

6. SOFTWARE

6.1 For all software, including without limitation device drivers, firmware and any necessary software for the proper operation and support of the Goods, Buyer is granted a perpetual, non-exclusive, non-transferable, irrevocable, royalty-free, worldwide right and license to use, reproduce, prepare derivative works of and distribute the software including, without limitation, distribution in electronic form.

6.2 Supplier shall provide all updates and modifications to the software to Buyer during the term of the relevant agreement between Buyer and Supplier without additional charges.

6.3 Any license fees for software shall be included in the purchase price or any other amounts payable under the Purchase Order.

7. TOOLS, MOULDS, DRAWINGS, AND OTHER MATERIALS

7.1 Supplier shall use specifications, drawings, information, tools, moulds, masks, jigs, dies and other materials furnished to Supplier or funded or paid for by Buyer (whether separate or as a part of the unit price) only in the manner prescribed by the Buyer. Supplier shall not allow any third party to use said materials for any purpose whatsoever.

7.2 Buyer may demand the surrender of the aforementioned material(s) at Buyer’s office or warehouse at any time. If the materials are stored at Supplier’s site, Supplier is expected to exercise reasonable diligence in handling and storing said materials. These should be delivered to Buyer promptly on Buyer’s demand.

8. DEFAULT AND CONTINUITY OF SUPPLY

8.1 Supplier acknowledges that time is of the essence in the performance of its obligations and that each day of delay in the delivery of the Goods or performance of the Services, regardless of quantity, will cause Buyer substantial damage including lost profits, loss of goodwill, etc. Consequently, if there is no accepted delivery of Goods or Services on the required date and place, Supplier shall not be entitled to any payment. In addition, Buyer shall have the following non-exclusive remedies:

(a) consider the Purchase Order rescinded without need of judicial intervention and require Supplier to pay Liquidated Damages in an amount equivalent to 100% of the value of the Purchase Order;

(b) choose to accept late delivery but impose the Penalty for Late Delivery of 2% for every day of delay (times the total value of the items delayed), until the Goods are delivered or Services are performed in full and to the satisfaction of Buyer.

8.2 In either case under 8.1, Buyer may engage a third party to provide the Goods or Services, and Supplier must provide and as applicable, allow the use of, all drawings, tooling, and other materials required for such third party to manufacture the Goods or perform the Services for Buyer, without prejudice to Buyer’s right to claim for costs and expenses (including without limitation additional costs incurred in connection with the contract with the third party) and/or damages (including without limitation Liquidated Damages in an amount equivalent to 100% of the value of the Purchase Order), arising from Supplier’s default.

 

9. WARRANTY

9.1 Goods are of good quality, design, materials, construction and workmanship, and conform strictly to the specifications approved samples, industry standards, and all other requirements of Buyer, in compliance with Supplier’s obligation under Section 2.3 of these STC. Supplier warrants that the Goods are free from inherent, manufacturing and workmanship defects, and bugs and errors, within one (1) year from receipt and acceptance thereof, provided the Goods are properly used and maintained as per instructions issued.

If within 1 year from delivery and acceptance thereof, all or some Goods manifest defects or sub-standard qualities, Supplier shall, at Buyer’s option (i) accept the return of the Goods and refund of the purchase price thereof; (ii) replace the Goods; or (iii) repair the Goods. In all cases, the entire attendant cost of the return, replacement or repair of the Goods shall be for the account of Supplier, without prejudice to Buyer’s claim for damages (including without limitation Liquidated Damages in an amount equivalent to 100% of the value of the Purchase Order) and Buyer’s exercise of its other remedies under these STC, law, equity or contract.

9.2 Services are performed with due diligence and in accordance with the requirements of Buyer and industry standards, in compliance with Supplier’s obligation under Section 2.3 of these STC. If the Services are not performed to the satisfaction of Buyer, Supplier shall, at Buyer’s option, (i) refund the fee for the inadequately performed Services, (ii) re-perform the Services, (iii) rectify the inadequately performed Services, and/or the results thereof; and/or (iv) reimburse Buyer for Buyer’s costs to rectify the Services and/or the results thereof. In all cases, the entire attendant cost of the refund, re-performance or rectification of the Services shall be for the account of the Supplier, without prejudice to Buyer’s claim for damages and Buyer’s exercise of its other remedies under these STC, law, equity or contract including without limitation Liquidated Damages in an amount equivalent to 100% of the value of the Purchase Order.

9.3 In addition to cancelling the Purchase Order in connection with defective Goods or Services, Buyer may also cancel any other pending purchase order with Supplier or any of its affiliates (whether or not these are for the same goods) and/or refuse receipt of any other goods or services from Supplier or its affiliates without need to pay for such orders.

10. INTELLECTUAL PROPERTY & CONFIDENTIALITY

10.1 The terms and conditions of the Confidentiality and Intellectual Property Assignment Agreement of the Jollibee Group of Companies (as found in https://www.jollibee.com.ph/ciaa/ (“CIPAA”) as amended from time to time are hereby incorporated herein by reference and made part of these STC, and are unconditionally accepted by Supplier, whether or not Supplier has separately signed the CIPAA. The provisions of this Section 10 shall be without prejudice to the application of the CIPAA.

10.2 Supplier acknowledges that the Buyer’s trademark and trade name, when used in the Goods, is the exclusive property of the Buyer. Supplier can only use them in the manner prescribed by Buyer and only for the purpose of meeting its obligations under the Purchase Order.

10.3 The concept applied in the manufacture or development of the Goods belongs to Buyer. Buyer has the sole right over the concept and Supplier cannot produce a product with similar concept (or any derivative work) without the written consent of Buyer.

10.4 Any customized Goods or software, and any intellectual property developed in collaboration with Buyer, shall be owned by Buyer.

10.5 Supplier shall, during the exploratory/discussion stage, disclose to Buyer in writing all patent, trademark or, copyright, or applications thereof related to, or that may used in connection with, the Goods or Services, as well as all licenses and/or franchises held by Seller in connection therewith.

10.6 Supplier shall keep in confidence all information it may acquire relating to the operation of the business of the Buyer while performing the obligations established under this STC, including without limitation, launch dates and details about new Goods and processes. Further, it shall ensure that its directors, officers, employees, personnel and agents are made aware of this obligation to keep confidential said information and comply therewith. Supplier shall install such measures in its facilities as Buyer may deem necessary to ensure compliance with this provision. Violation by Supplier’s director, officer, employee, personnel or agent shall be considered a violation by Supplier. Violations of this clause shall be subject to Liquidated Damages for breach of confidentiality as provided in the CIPAA, without prejudice to Buyer’s other rights under these STC, law, equity or contract.

11. INDEMNIFICATION

11.1 Supplier shall defend, indemnify, and hold harmless Buyer and all directors, officers, employees, representatives and agents, subsidiaries and affiliates thereof and their respective directors, officers, employees, representatives and agents, against any and all claims, judgments, actions, debts or rights of action, suits, expenses, costs, loss and damage (including, without limitation, any direct or indirect consequential losses, loss of profit and loss of reputation, and all interest, penalties, legal fees, and other professional costs and expenses) arising from (i) any breach by Supplier or its personnel of these STC, (ii) the use of the Goods or Services by Buyer or its customers; (iii) any actual or alleged defects in the Goods or Services, whether defects in design, manufacture or otherwise, (iv) the acts or omissions of Supplier or its personnel; and (v) all claims made by Supplier’s personnel.

11.2 In case of a claim, action, or suit alleging a defect in the design, manufacture or otherwise in the Goods, Supplier shall not destroy or discard any engineering design records or safety testing records relating to such Goods without the prior written consent of Buyer.

 

12. TERMINATION

1.2 Buyer may terminate the Purchase Order and/or relevant agreement without cause by giving written notice to the Supplier at least thirty (30) days before the intended date of termination.

12.2 Buyer may terminate the Purchase Order and/or relevant agreement for breach of any of the provisions of these STC by written notice to the Supplier, which shall take effect immediately upon the issuance thereof without need for court action or arbitration.

12.3 Termination of the Purchase Order and/or relevant agreement for cause shall entitle the Buyer to the payment by Seller of Liquidated Damages in an amount equivalent to 100% of the value of the Purchase Order, without prejudice to Buyer’s right to recover other forms of damages, costs of suit and attorney’s fees.

13. EXCLUSIVITY

13.1 Supplier warrants that for the duration of the contract between Buyer and Supplier and for a period of 10 years after the termination thereof, the Goods (or any similar Goods) will be offered and sold exclusively to the Buyer. No other person or entity anywhere in the world shall be permitted to order or buy the Goods or anything identical or similar thereto from Supplier or its affiliates, nor shall Supplier be allowed to offer the Goods for sale or manufacture to any person, without the Buyer’s prior written consent.

13.2 If Supplier (i) supplies goods or services to any other restaurant or food retail/service outlet of any kind, or (ii) manufactures goods similar to the Goods for sale under its own brand, Supplier shall make a written disclosure of such fact to Buyer immediately upon the execution of this STC. Supplier shall keep its disclosure updated throughout the term of this STC and shall provide such additional information as may be required by Buyer in relation to such disclosure. This is without prejudice to Section 13.1.

13.3 For the avoidance of doubt, Buyer has the right, at any time, order and purchase from other suppliers (free from financial and/or other claims from Supplier, if any) goods and services that are identical and/or similar to the Goods and Services.

14. COMPLIANCE WITH LAW

14.1 Supplier represents and warrants to Buyer that the Goods will and have been designed, manufactured and delivered and/or the Services will and have been performed in compliance with all applicable laws and regulations (including, without limitation, environmental, health and safety laws and regulations) and Buyer’s policies or guidelines on the environment and banned substances, as may be from time to time informed to Supplier, and all applicable industry standards. For dangerous or hazardous goods, Supplier shall provide to Buyer written and detailed specifications of the composition of such goods and of all laws, regulations and other requirements relating to such goods in order to enable Buyer to properly transport, store, process and use such goods.

14.2 Supplier shall, within 5 days from notice thereof, inform Buyer in writing of any investigation, inspection, order, suit, or any other legal proceeding, conducted or filed against or otherwise involving Supplier, in connection with Supplier’s compliance with the requirements of applicable laws and with these STC or any contract, in relation to its implementation and/or performance of this Agreement.

15. NATURE OF BUYER-SUPPLIER RELATIONSHIP

Supplier is not an agent, legal representative, joint venture partner, or employee of Buyer and is not empowered to act on the Buyer’s behalf in any manner. Neither is there any employer-employee relationship between Supplier’s employees and Buyer.

16. SEPARABILITY

If a provision of these STC is held to be invalid or unenforceable, then such provision shall, so far as it is invalid or unenforceable, be given no effect and shall be deemed not to be included in these STC but without invalidating any of the remaining provisions of these STC. The Parties shall then use all reasonable endeavors to replace the invalid or unenforceable provisions by a valid and enforceable substitute provision the effect of which is as close as possible to the intended effect of the invalid or unenforceable provision.

17. CONSEQUENTIAL DAMAGES.

In no event shall Supplier be entitled to loss of profits, revenue, goodwill, or production downtime, or indirect, special, incidental, or consequential damages, even if Buyer is advised of the same.

18. SUSPENSION OF PAYMENTS

In addition to all its other remedies under these STC, law, equity or contract, Buyer shall have the right to suspend payments if (i) Buyer has reasonable basis to believe that there has been fraud, negligence, delay or violation any provision of these STC during the period of effectivity of these STC and/or or any contract between Supplier and Buyer or any of Buyer’s affiliates and subsidiaries, in which case payment for Goods delivered and Services rendered will be made upon resolution of the relevant issue to the mutual satisfaction of Buyer and Supplier; or (ii) Seller’s title or right over the manufacturing, distribution, sale, or other disposition of Goods, or capacity or right to perform the Services is in question, in which case, Buyer shall have the right to suspend payment for all Goods or Services ordered from Supplier until the matter is fully resolved by the proper governmental authority.

19. GENERAL WARRANTIES

19.1 Supplier has good title to Goods, and has the legal power and authority and all required licenses and permits to manufacture, distribute, sell, or otherwise dispose of the Goods to Buyer. The Goods are free and clear of any liens or encumbrances and not subject of and/or involved in any suit before the courts or administrative bodies. Buyer shall perpetually have legal, valid, peaceful, and uninterrupted use, possession, and enjoyment of the Goods.

19.2 Supplier has the expertise and experience to provide the Goods and perform the Services in accordance with the requirements, standards and specifications of Buyer, and will do so with due care and due diligence. Supplier has the legal power and authority to perform the Services.

19.3 Supplier is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it was incorporated and all jurisdictions where it operates. It has the power and authority necessary to own, lease and operate the assets and properties it owns, leases and operates, and to carry on its business as now conducted. It has all requisite power and authority to enter into the transaction/s contemplated in these STC and to perform its obligations hereunder. It has obtained and shall maintain throughout the term all rights from third parties that may be required for the due conduct of its business. The execution and performance of the transaction/s contemplated in these STC is not in violation of the rights of third parties or in breach of any agreement with third parties. All acts and other proceedings required to be taken by it to authorize the execution and performance of the transaction/s contemplated in these STC have been duly and properly taken. These STC has been duly executed by it and constitutes a valid and binding obligation, enforceable against it in accordance with its terms. The execution and performance of the transaction/s contemplated in these STC do not conflict with, or result in any violation of or default under, or require any consent, authorization or approval under, any provision of its incorporation documents, contracts under which it is bound, or laws and regulations applicable to it.

Supplier shall strictly comply with any agreement with third parties executed by Supplier with reference to the Goods including but not limited to Licensing Agreements, Purchase Agreements or Manufacturing Agreements (each, a “Third-Party Agreement”). A violation of a Third Party Agreement is a ground for termination by Buyer of the Purchase Order and/or the relationship with Supplier.

19.4 Supplier is and will be throughout the term, in full compliance with all laws, regulations, ordinances, and other governmental issuances and applicable to it and its business, including without limitation those related to labor and labor standards, occupational health and safety, environment, and anti-corruption.

20. FORCE MAJEURE

Buyer shall have the right to suspend payment should Supplier’s failure to comply with these STC be due to force majeure, provided that if the force majeure shall continue for a period of fifteen (15) consecutive days, Buyer shall have the right to terminate the Purchase Order and these STC by giving written notice to the Supplier, which notice shall be effective immediately.

21. JURISDICTION AND COURT VENUE

The STC shall be interpreted and governed by the laws of the Republic of the Philippines. Furthermore, any legal action or proceeding relating to the STC or Purchase Order or relevant contract shall be brought before the competent courts of Pasig City, Metro Manila, Philippines to the exclusion of any other venue.

22. CUMULATIVE REMEDIES

All rights and remedies of Buyer provided in these STC are cumulative and not exclusive of any other rights or remedies that may be available to Buyer, whether provided by law, equity, or contract. Without limiting the generality of the foregoing, it is understood that a claim for Liquidated Damages or the imposition of any penalty shall be without prejudice to Buyer’s right to recover other forms of damages, costs of suit and attorney’s fees, as applicable.

 


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