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Original Equipment Suppliers Association

OEM North American Production Purchase Order Contract Terms and Conditions Comparative Analysis12th Edition

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OEM North American Production Purchase Order Contract Terms and Conditions Comparative Analysis

2017 Original Equipment Suppliers Association, All Rights Reserved Page 1

INTRODUCTION

Welcome to the OEM North American Production Purchase Order Contract Terms and Conditions Comparative Analysis published by the Original Equipment Suppliers Association (“OESA”) (revised September 2017). This document is a comparative analysis of general contract Terms and Conditions issued by automotive original equipment manufacturers in North America (“OEMs”) for production parts purchased in North America. Although some OEMs or associated entities may have more than one version of their Terms and Conditions, OESA has identified and analyzed the most broadly used Terms and Conditions for purchases in the North American market for each OEM. The specific Terms and Conditions analyzed and compared are as follows:

BMW BMW Group International Terms and Conditions for the Purchase of Production Materials and Automotive Components (Status 2/28/2014)

FCA US Production and Mopar Purchasing General Terms and Conditions (7/2015)

Ford Ford Motor Company and Affiliates — Production Purchasing Global Terms and Conditions (PPGTC 1/1/2004)

General Motors (2011)

General Terms and Conditions (Revised 03/2011)

General Motors (2014)

General Terms and Conditions for Direct Material, CCA and Tooling Purchases (Revised 2/2014)

Honda Terms and Conditions for Purchase and Sale of Goods (revised 5/16/2012)

Hyundai Hyundai Motor Manufacturing Alabama, LLC — Parts Development General Terms and Conditions (Rev. 1 110103)

Kia1 Kia Motors Manufacturing Georgia, Inc. — Parts Development Agreement Rev. 2/2010

Mercedes Mercedes-Benz U.S. International, Inc. — Master Terms Direct Purchasing (10/1/2010)

Nissan Nissan North America, Inc. — Master Purchase Agreement, dated 12/19/2003

Rivian Rivian Automotive, LLC — Terms and Conditions of Purchase

Tesla Tesla Motors, Inc. (USA) — General Terms and Conditions for Prototype or Production Parts or Service (Rev. 10/21/2012)

Toyota Toyota Motor Engineering & Manufacturing North America, Inc. — Terms and Conditions (4/1/2009)

Volkswagen Volkswagen Group of America, Inc. — Terms and Conditions of Purchase (Last revised 7/31/2008)

OESA OESA Draft Model General Terms and Conditions (10/2011)

1 The Kia terms are, with limited exceptions, identical to the Hyundai terms. Therefore, the Comparative Analysis of the Kia terms is limited to “Same as Hyundai” unless there are material differences.



Note 1: The 2014 GM Terms are generally applicable only to RFPs issued after July 15, 2013, with the 2011 terms remaining applicable to POs under any earlier issued RFP. Accordingly, the Analysis includes both the 2011 and 2014 GM Terms.

Note 2: For purposes of the Comparative Analysis, the term “OEM” is used to indicate the “buyer” in the analysis as referenced in the OESA Draft Model General Terms and Conditions.

The purpose of this comparative analysis is to provide OESA members a ready reference to understand the standard Terms and Conditions all OEMs routinely incorporate into Purchase Orders, and to highlight those areas most critical to today’s industry environment. This is especially relevant as the pace of change – and the magnitude of challenges – continue to escalate.

This comparative analysis does not purport to be the “last word” on each of the topics covered. It can neither cover all of the relevant contract law and other legal principles, nor capture every clause and nuance of the OEM’s standard Terms and Conditions. However, it is OESA’s hope that the analysis will provide a useful reference guide and starting point for risk assessment and contract and dispute negotiations. The comments in the body of the comparative analysis are intended to highlight critical areas and hot-button issues in today’s Supplier/OEM relationships.

About OESA

The Original Equipment Suppliers Association champions the business interests of more than 450 member organizations. Since 1998, the association is committed to addressing issues of common concern and advocating on behalf of the automotive supplier community. OESA strives to foster collaboration throughout the supply chain and help members make critical business decisions. Through timely events, active peer group councils and ongoing advocacy and thought leadership, OESA provides relevant industry information and resources to and for the automotive supplier industry. OESA is one of four Divisions of the Motor & Equipment Manufacturers Association (MEMA).

The Authors

This updated comparative analysis was prepared by OESA in collaboration with Butzel Long, a Professional Corporation. Butzel Long is a leading legal advisor to automotive supplier companies worldwide. The Firm has broad experience pertinent to all aspects of the Supplier-to-OEM and Supplier-to-Supplier relationships.

Butzel Long’s multi-disciplinary team of authors included Sheldon Klein, Cynthia Haffey, Dan Rustmann, James Bruno, Patrick Dreisig, Jennifer Dukarski, David Devine, and Haley Jonna.2 (OESA gratefully acknowledges the work of those who authored early versions of this analysis, from which this version has evolved.) Portions of the analysis were also reviewed by members of the OESA Legal Issues Council.

2 Additional information regarding the authors, and the Butzel Long firm, may be found at www.butzel.com. The

Firm maintains a section pertinent to Supplier issues at http://www.butzel.com/terms-and-conditions. Butzel Long and its automotive team may also be contacted at 313.225.7000.

http://www.butzel.com/



Format and Use

In each Section, there is a Context and Questions introduction, which synthesizes the key points and considerations relevant to that Section. It is followed by a Comparative Analysis, which summarizes the main points of each OEM’s Terms and Conditions with regard to each subject matter. Certain summary points include brief comments, indicated by a flag () symbol, that identify distinctive or potentially problematic aspects of particular terms.

Many sections include a “Dashboard.” The purpose of the Dashboard is to provide a simple, high-level comparison among the OEM and OESA Terms and Conditions. The Dashboard frames the topics as simplified questions, which are answered Yes (Y), No (N) or Silent (S) for each OEM. “Yes” indicates that there is an expressed provision responding affirmatively. “No” indicates that there is an expressed provision responding negatively. “Silent” indicates that there is no expressed provision. “Silent” is used because there may be a default rule of law under the UCC or other applicable rules of law which addresses the issue in the absence of an agreement to the contrary. Because the Dashboard is necessarily simplified to make it useful for quick review, it should be used accordingly.

Limitations

This analysis is a summary of the documents described above and is necessarily limited solely to those documents. As referenced in this analysis and highlighted in Appendix A, many of the documents analyzed in this comparative analysis reference and incorporate other documents, laws and industry standards that contain additional terms and requirements which the OEMs assert are part of the contract between the OEM and Supplier. Although some are referenced in summary fashion, these additional documents and laws are not reviewed in this analysis. This comparative analysis cannot, therefore, be used as the “last word” on a topic, especially with regard to those topics (such as quality) addressed in multiple contract documents. Suppliers must also be mindful that a topic addressed in an OEM’s general Terms and Conditions might also be addressed differently on the face of the associated Purchase Order or in its other contract documents. For that reason, Suppliers should review all applicable contract documents in their entirety (as well as any applicable laws) with competent counsel in order to obtain a complete understanding of the Terms and Conditions governing its relationship with their particular OEM. The Supplier must regularly monitor changes to the OEM contract documents, which have become more frequent in recent years. OEMs typically reserve the right to change various contract documents at any time and often without notice. They have also increasingly relied on Suppliers to locate and review documents through online portals and may not communicate changes via traditional methods, such as hard copy or email.

OESA, its counsel, individual member companies, their representatives, and attorneys assisting with this project do not warrant the accuracy or completeness of this analysis. This analysis is not intended to provide legal advice, and should not be relied upon for that purpose. A Supplier should consult legal counsel about specific legal issues arising from its relationship with the OEMs.



Please email suggestions, comments and questions to OESA at [email protected] or address them to OESA at 25925 Telegraph Road, Ste. 350, Southfield, MI 48033. Electronic copies are available to OESA members. Ordering information may be found under the Publications section at http://www.oesa.org.

This document may not be copied or reproduced in whole or in part without the prior written consent of OESA.

As a matter of policy, OESA does not furnish copies of OEM Terms and Conditions or other contract documents.

mailto:[email protected]

http://www.oesa.org/



INTRODUCTION......................................................................................................................... 1

PART ONE . ................................................................................................................................ 21

I. Contract Formation – Context and Questions ..................................................................... 22

I. Contract Formation – OEM Comparative Analysis ............................................................ 25

1. BMW (Sections 1.1, 1.2, 2.1 and 2.2): ............................................................................... 25 2. FCA US (Sections 1 and 2): ............................................................................................... 25 3. Ford (Sections 3, 4 and 5): ................................................................................................. 26 4. General Motors (2011) (Sections 1 and 31):..................................................................... 26 5. General Motors (2014) (Sections 1 and 2):....................................................................... 27 6. Honda (Sections 1, 2.1-2.3 and 14.13):.............................................................................. 27 7. Hyundai (Sections 1 and 2):............................................................................................... 28 8. Kia (Sections 1 and 2): ....................................................................................................... 28 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Sections 1.1 (a), (f), (l), and (hh), 2.1, 2.3, 10.1, 10.2 and 38): .................................................................................................... 28 10. Nissan (Sections 1.1, 2.1 and 29): .................................................................................... 29 11. Rivian (Sections 1.1, 1.2, 2.1 and 2.2): ............................................................................ 29 12. Tesla (Sections 1.1, 1.2, 1.3, 1.4, 1.5 and 2.1): ................................................................ 30 13. Toyota (Sections 1.1, 1.4, 7.1, 7.5 and 7.6 and final paragraph): .................................... 30 14. Volkswagen (Sections 1, 38 and 40): ............................................................................... 31 15. OESA (Sections 1 and 21.6):............................................................................................ 31

I. Contract Formation – Dashboard.......................................................................................... 33

II. Contract Changes – Context and Questions........................................................................ 34

II. Contract Changes – OEM Comparative Analysis .............................................................. 36

1. BMW (Sections 2.3 - 2.4, 3.2 and 21.1): ............................................................................ 36 2. FCA US (Section 12): ........................................................................................................ 36 3. Ford (Sections 4, 9 and 44): ............................................................................................... 37 4. General Motors (2011) (Sections 5, 6 and 31):................................................................. 38 5. General Motors (2014) (Sections 2, 10 and 12):............................................................... 38 6. Honda (Sections 1.2, 2.4, 3.5 and 14.3): ............................................................................ 38 7. Hyundai (Sections 3, 11 and 20): ...................................................................................... 39 8. Kia (Sections 3, 11 and 20): ............................................................................................... 39 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Sections 9.3, 9.7, 10.1, 10.4, 12.2, 13.2 and 38): ........................................................................................................................... 39 10. Nissan (Sections 8 and 29): ...………...…………………………………………………40 11. Rivian (Sections 2.2, 17.1 and 17.2): ............................................................................... 40 12. Tesla (Section 1.6): ........................................................................................................... 40 13. Toyota (Sections 1.4, 2.2(b), 3.5(b) and 4.1): .................................................................. 40 14. Volkswagen (Sections 9 and 38): ..................................................................................... 41 15. OESA (Sections 1.2, 1.3 and 21.6): ................................................................................. 41

II. Contract Changes – Dashboard............................................................................................ 42

III. Assignment and Subcontracting – Context and Questions .............................................. 43

III. Assignment and Subcontracting – OEM Comparative Analysis ..................................... 45



1. BMW (Sections 7.9, 13.8, 14.1, 17.3, 20 and 21.6): .......................................................... 45 2. FCA US (Sections 11(b) and 19): ...................................................................................... 45 3. Ford (Sections 20.04, 32.02, 37.02, 42.01 and 42.04): ...................................................... 45 4. General Motors (2011) (Sections 14, 25 and 27):............................................................. 46 5. General Motors (2014) (Sections 11, 12, 31 and 37):....................................................... 46 6. Honda (Section 14.1): ........................................................................................................ 46 7. Hyundai (Section 26): ........................................................................................................ 47 8. Kia (Section 26):................................................................................................................. 47 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Sections 4.7, 6.3(f), 6.3(t), 20.1, 22.8, 33 and 37): ..................................................................................................................... 47 10. Nissan (Sections 21 and 30): ............................................................................................ 47 11. Rivian (Sections 16.4, 20.1, 38 and 40): .......................................................................... 47 12. Tesla (Section 14): ............................................................................................................ 48 13. Toyota (Section 7.3): ........................................................................................................ 48 14. Volkswagen (Sections 14, 15 and 32): ............................................................................. 48 15. OESA (Section 15): .......................................................................................................... 49

III. Assignment and Subcontracting – Dashboard .................................................................. 50

IV. Expiration and Termination – Context and Questions ..................................................... 52

IV. Expiration and Termination – OEM Comparative Analysis ........................................... 55

1. BMW (Section 2.8): ........................................................................................................... 55 2. FCA US (Sections 22, 31 and 38): ..................................................................................... 55 3. Ford (Sections 8 and 27-31): .............................................................................................. 55 4. General Motors (2011) (Section 13): ................................................................................ 56 5. General Motors (2014) (Section 34): ................................................................................ 56 6. Honda (Section 13.3): ........................................................................................................ 57 7. Hyundai (Section 29): ........................................................................................................ 57 8. Kia (Section 29):................................................................................................................. 57 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Sections 21 and 22): .................. 57 10. Nissan (Sections 26 and 27.6): ......................................................................................... 58 11. Rivian (Sections 3.2, 26, 27, 28 and 29): ......................................................................... 58 12. Tesla (Sections 1.5 and 12): ............................................................................................. 59 13. Toyota (Section 5.8): ........................................................................................................ 59 14. Volkswagen (Sections 2 and 19): ..................................................................................... 60 15. OESA (Sections 12 and 21.2):.......................................................................................... 60

IV. Expiration and Termination – Dashboard ......................................................................... 62

PART TWO ................................................................................................................................ 63

I. Releases and Delivery – Context and Questions ................................................................... 64

I. Releases and Delivery – OEM Comparative Analysis ......................................................... 66

1. BMW (Sections 2.4, 3.1-3.5, and 5): .................................................................................. 66 2. FCA US (Sections 3-5):...................................................................................................... 66 3. Ford (Sections 6 and 13): ................................................................................................... 66 4. General Motors (2011) (Sections 3 and 4):....................................................................... 67 5. General Motors (2014) (Sections 3, 7, 8 and 14):............................................................. 67



6. Honda (Sections 3.2 and 4): ............................................................................................... 67 7. Hyundai (Sections 3-6): ..................................................................................................... 67 8. Kia (Sections 3-6): .............................................................................................................. 68 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Section 12): ............................... 68 10. Nissan (Sections 4 and 5): ................................................................................................ 68 11. Rivian (Sections 3.1, 4, 8 and 15): ................................................................................... 68 12. Tesla (Sections 1.3, 1.5, 2.3, 3.2 and 3.3): ....................................................................... 69 13. Toyota (Sections 2.1(a), 2.4 and 2.7): .............................................................................. 69 14. Volkswagen (Section 3): .................................................................................................. 70 15. OESA (Sections 2.1, 3.2 and 13.1): ................................................................................. 71

I. Releases and Delivery – Dashboard ....................................................................................... 72

II. Packing, Marking, and Shipping – Context and Questions ............................................... 74

II. Packing, Marking, and Shipping – OEM Comparative Analysis ..................................... 75

1. BMW (Sections 4 and 9): ................................................................................................... 75 2. FCA US (Section 4): .......................................................................................................... 75 3. Ford (Sections 10.03 and 13): ............................................................................................ 75 4. General Motors (2011) (Sections 2, 4 and 10):................................................................. 75 5. General Motors (2014) (Sections 4 and 14):..................................................................... 76 6. Honda (Section 4.3): .......................................................................................................... 76 7. Hyundai (Section 5): .......................................................................................................... 76 8. Kia (Section 5):................................................................................................................... 76 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Section 12): ............................... 76 10. Nissan (Sections 4.1.1 and 6): .......................................................................................... 77 11. Rivian (Sections 14 and 15): ............................................................................................ 77 12. Tesla (Section 3.1): ........................................................................................................... 77 13. Toyota (Section 2.4): ........................................................................................................ 77 14. Volkswagen (Section 5): .................................................................................................. 78 15. OESA (Section 3.1): ......................................................................................................... 78

III. Inspections and Non-Conforming Parts – Context and Questions .................................. 79

III. Inspections and Non-Conforming Parts – OEM Comparative Analysis ........................ 80

1. BMW (Sections 6, 10.1, 10.3-10.5 and 21.5): .................................................................... 80 2. FCA US (Section 6): .......................................................................................................... 80 3. Ford (Section 14): .............................................................................................................. 81 4. General Motors (2011) (Sections 6 and 7):....................................................................... 81 5. General Motors (2014) (Sections 6 and 15):..................................................................... 81 6. Honda (Sections 4.6, 4.7, 8.1 and 10.2): ............................................................................ 81 7. Hyundai (Sections 8 and 11):............................................................................................. 82 8. Kia (Sections 8 and 11): ..................................................................................................... 82 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Section 13): ............................... 82 10. Nissan (Section 5): ........................................................................................................... 83 11. Rivian (Section 7): ........................................................................................................... 83 12. Tesla (Sections 3.3, 5.2, 6.2 and 6.3): ............................................................................. 83 13. Toyota (Sections 1.7(a) and (b), 2.5, 2.6 and 3.6): ........................................................... 84 14. Volkswagen (Section 7): .................................................................................................. 84



15. OESA (Sections 4 and 7.2):.............................................................................................. 85

IV. Supplier Quality – Context and Questions ......................................................................... 86

IV. Supplier Quality – OEM Comparative Analysis ............................................................... 87

1. BMW (Section 9): .............................................................................................................. 87 2. FCA US (Section 6): .......................................................................................................... 87 3. Ford (Section 12): .............................................................................................................. 87 4. General Motors (2011) (Section 6): .................................................................................. 87 5. General Motors (2014) (Sections 12 and 15):................................................................... 87 6. Honda (Sections 5.1 and 13.1): .......................................................................................... 88 7. Hyundai (Section 11): ........................................................................................................ 88 8. Kia (Section 11):................................................................................................................. 88 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Section 13): ............................... 88 10. Nissan (Section 10): ......................................................................................................... 88 11. Rivian (Sections 6.1, 6.2 and 26): .................................................................................... 88 12. Tesla (Section 5): .............................................................................................................. 89 13. Toyota (Sections 1.6, 5.4(b) and 5.4(c)): ......................................................................... 89 14. Volkswagen (Section 11): ................................................................................................ 89 15. OESA (Sections 7.2 and 8.2):........................................................................................... 90

IV. Supplier Quality -- Dashboard ............................................................................................ 91

V. Service Parts – Context and Questions ................................................................................ 92

V. Service Parts – OEM Comparative Analysis ....................................................................... 93

1. BMW (Sections 13.8, 13.9 and 14): ................................................................................... 93 2. FCA US (Section 13): ........................................................................................................ 93 3. Ford (Section 33): .............................................................................................................. 93 4. General Motors (2011) (Section 20): ................................................................................ 94 5. General Motors (2014) (Section 5): .................................................................................. 94 6. Honda (Section 9): ............................................................................................................. 94 7. Hyundai (Section 21): ........................................................................................................ 94 8. Kia (Section 21):................................................................................................................. 94 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Sections 9.5 and 18): ................. 95 10. Nissan (Section 19): ......................................................................................................... 95 11. Rivian (Sections 3.2 and 9.4): .......................................................................................... 95 12. Tesla (Section 2.2): ........................................................................................................... 95 13. Toyota (Sections 4.2 and 5.4(d)): ..................................................................................... 95 14. Volkswagen (Section 12): ................................................................................................ 96 15. OESA (Sections 2.2 and 2.3):........................................................................................... 96

V. Service Parts – Dashboard .................................................................................................... 97

VI. Invoices and Payment – Context and Questions ................................................................ 98

VI. Invoices and Payment – OEM Comparative Analysis ...................................................... 99

1. BMW (Section 7): .............................................................................................................. 99 2. FCA US (Section 14): ........................................................................................................ 99 3. Ford (Sections 10, 11 and 14.07): ...................................................................................... 99



4. General Motors (2011) (Sections 2 and 7):....................................................................... 99 5. General Motors (2014) (Sections 6 and 17):................................................................... 100 6. Honda (Sections 3.4 and 4.6): .......................................................................................... 100 7. Hyundai (Sections 7 and 8):............................................................................................. 100 8. Kia (Sections 7 and 8): ..................................................................................................... 100 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Sections 9.6(a), 9.6(b) and 12.4(b)): ................................................................................................................................ 100 10. Nissan (Sections 5.1 and 7): ........................................................................................... 101 11. Rivian (Sections 9.1, 9.2, 9.3,11 and 12): ...................................................................... 101 12. Tesla (Sections 4.1, 4.2, 4.3 and 4.6): ............................................................................ 101 13. Toyota (Sections 2.2, 2.3 and 3.5): ................................................................................ 101 14. Volkswagen (Sections 4 and 8): ..................................................................................... 102 15. OESA (Section 6): ......................................................................................................... 102

VII. Taxes – Context and Questions ........................................................................................ 103

VII. Taxes – OEM Comparative Analysis .............................................................................. 104

1. BMW (Section 7.2): ......................................................................................................... 104 2. FCA US (Section 40): ...................................................................................................... 104 3. Ford (Section 10.04): ....................................................................................................... 104 4. General Motors (2011):................................................................................................... 104 5. General Motors (2014) (Section 19): .............................................................................. 104 6. Honda (Section 3.2): ........................................................................................................ 104 7. Hyundai (Sections 12, 16, 22 and 30): ............................................................................ 104 8. Kia (Sections 12, 16, 22, 30 and 41): ............................................................................... 104 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Sections 6.1(b), 6.3(i), 9.6(c) and 26): ........................................................................................................................................ 105 10. Nissan (Section 39): ....................................................................................................... 105 11. Rivian (Section 10): ....................................................................................................... 105 12. Tesla (Sections 4.7 and 4.8): .......................................................................................... 105 13. Toyota (Sections 5 and 7): ............................................................................................. 105 14. Volkswagen (Sections 4 and 33): ................................................................................... 106 15. OESA (Section 5): .......................................................................................................... 106

VIII. Setoff – Context and Questions ...................................................................................... 107

VIII. Setoff – OEM Comparative Analysis............................................................................. 109

1. BMW (Section 7.11): ....................................................................................................... 109 2. FCA US (Section 14): ...................................................................................................... 109 3. Ford (Section 11): ............................................................................................................ 109 4. General Motors (2011) (Section 23): .............................................................................. 109 5. General Motors (2014) (Section 17): .............................................................................. 109 6. Honda (Sections 3.4 and 3.6): .......................................................................................... 109 7. Hyundai (Sections 7 and 28(e)): ...................................................................................... 109 8. Kia (Section 7s and 28(e)): ............................................................................................... 109 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Section 22.9): .......................... 110 10. Nissan (Section 7.5): ...................................................................................................... 110 11. Rivian (Sections 13.1 and 13.2): .................................................................................... 110



12. Tesla (Section 4.5): ......................................................................................................... 110 13. Toyota (Sections 2.3(a), 2.6, 3.9, 3.12 and 5.9(b)(7)): ................................................... 110 14. Volkswagen (Sections 8 and 27): ................................................................................... 111 15. OESA (Section 6): .......................................................................................................... 111

VIII. Setoff – Dashboard .......................................................................................................... 112

PART THREE ........................................................................................................................... 113

I. Parts Warranty – Context and Questions ........................................................................... 114

I. Parts Warranty – OEM Comparative Analysis ................................................................. 117

1. BMW (Sections 10.1-10.5): ............................................................................................. 117 2. FCA US (Section 8): ........................................................................................................ 117 3. Ford (Section 22): ............................................................................................................ 117 4. General Motors (2011) (Section 9): ................................................................................ 117 5. General Motors (2014) (Section 13): .............................................................................. 118 6. Honda (Section 5): ........................................................................................................... 118 7. Hyundai (Section 12): ...................................................................................................... 119 8. Kia (Sections 12 and 31): ................................................................................................. 119 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Section 16): ............................. 119 10. Nissan (Sections 3, 9 and 13): ........................................................................................ 120 11. Rivian (Sections 5.1, 5.2 and 5.4): ................................................................................. 121 12. Tesla (Sections 6.1 and 5.3): .......................................................................................... 121 13. Toyota (Section 5.4): ...................................................................................................... 122 14. Volkswagen (Section 10): .............................................................................................. 123 15. OESA (Section 7.1): ....................................................................................................... 123

I. Parts Warranty – Dashboard ............................................................................................... 124

II. Recall – Context and Questions .......................................................................................... 125

II. Recall – OEM Comparative Analysis ................................................................................ 127

1. BMW (Section 11.4): ....................................................................................................... 127 2. FCA US (Sections 11 and 26): ......................................................................................... 127 3. Ford (Section 23): ............................................................................................................ 127 4. General Motors (2011) (Section 21): .............................................................................. 128 5. General Motors (2014) (Section 25): .............................................................................. 128 6. Honda: .............................................................................................................................. 128 7. Hyundai (Section 13): ...................................................................................................... 128 8. Kia (Section 13):............................................................................................................... 128 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Section 19): ............................. 128 10. Nissan (Section 11): ....................................................................................................... 128 11. Rivian (Sections 5.2, 5.4 and 5.6): ................................................................................. 129 12. Tesla (Sections 7 and 8.1): ............................................................................................. 129 13. Toyota (Sections 5.5(a) and 5.5(b)): .............................................................................. 129 14. Volkswagen (Sections 13 and 15): ................................................................................. 129 15. OESA (Section 7.3): ....................................................................................................... 129

II. Recall – Dashboard .............................................................................................................. 130



III. Price Warranty – Context and Questions ........................................................................ 131

III. Price Warranty – OEM Comparative Analysis .............................................................. 132

1. BMW: ............................................................................................................................... 132 2. FCA US (Section 9): ........................................................................................................ 132 3. Ford: ................................................................................................................................. 132 4. General Motors (2011):................................................................................................... 132 5. General Motors (2014):................................................................................................... 132 6. Honda: .............................................................................................................................. 132 7. Hyundai (Section 14): ...................................................................................................... 132 8. Kia (Section 14):............................................................................................................... 132 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Section 16.14): ........................ 133 10. Nissan: ............................................................................................................................ 133 11. Rivian (Sections 9.2 and 9.4): ........................................................................................ 133 12. Tesla (Section 4.4): ......................................................................................................... 133 13. Toyota (Section 2.2(a)): ................................................................................................. 133 14. Volkswagen (Section 10): .............................................................................................. 133 15. OESA:............................................................................................................................. 133

IV. Indemnification and Product Liability – Context and Questions .................................. 134

IV. Indemnification and Product Liability – OEM Comparative Analysis ........................ 136

1. BMW (Section 10.3, 10.4, 11): ........................................................................................ 136 2. FCA US (Sections 11 and 24): ......................................................................................... 136 3. Ford (Section 25): ............................................................................................................ 136 4. General Motors (2011) (Sections 16 and 25):................................................................. 136 5. General Motors (2014) (Sections 16, 25 and 31):........................................................... 137 6. Honda (Section 6): ........................................................................................................... 137 7. Hyundai (Section 18): ...................................................................................................... 137 8. Kia (Sections 18 and 21): ................................................................................................. 137 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Sections 17 and 24): ................ 138 10. Nissan (Sections 12 and 13): .......................................................................................... 138 11. Rivian (Sections 22.1 and 22.2): .................................................................................... 138 12. Tesla (Sections 7, 8.1, 8.2 and 8.3): ............................................................................... 138 13. Toyota (Sections 4.3, 4.6, 5.5 and 6.16): ....................................................................... 139 14. Volkswagen (Section 15): .............................................................................................. 139 15. OESA (Section 8): .......................................................................................................... 140

IV. Indemnification and Product Liability – Dashboard ...................................................... 141

V. Default and Remedies – Context and Questions ............................................................... 142

V. Default and Remedies – OEM Comparative Analysis ...................................................... 145

1. BMW (Sections 2.6, 2.7, 2.8, 10.3 and 21.4): .................................................................. 145 2. FCA US (Sections 21 and 23): ......................................................................................... 145 3. Ford (Sections 26, 28 and 41): ......................................................................................... 146 4. General Motors (2011) (Sections 11, 12, 21 and 26):..................................................... 146 5. General Motors (2014) (Sections 9, 15, 20, 25, 26, 33 and 36): .................................... 147 6. Honda (Sections 4.7, 5.8 and 13): .................................................................................... 148



7. Hyundai (Sections 27, 28, 31 and 34): ............................................................................ 148 8. Kia (Sections 27, 28, 31 and 34): ..................................................................................... 149 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Section 22): ............................. 149 10. Nissan (Sections 27.1-27.5 and 28): ............................................................................... 149 11. Rivian (Sections 26, 29.2 and 29.3): .............................................................................. 150 12. Tesla (Sections 12.2, 12.3, 20 and 21.1): ....................................................................... 150 13. Toyota (Sections 2.6, 3.7, 5.4 and 5.9): ......................................................................... 151 14. Volkswagen (Sections 13, 17 and 18): ........................................................................... 152 15. OESA (Sections 7.2, 13 and 21.5): ................................................................................ 152

V. Default and Remedies – Dashboard ................................................................................... 154

VI. Excusable Delays/Force Majeure – Context and Questions ........................................... 155

VI. Excusable Delays/Force Majeure – OEM Comparative Analysis ................................. 157

1. BMW (Sections 3.6-3.7): ................................................................................................. 157 2. FCA US (Section 7): ........................................................................................................ 157 3. Ford (Section 40): ............................................................................................................ 157 4. General Motors (2011) (Section 8): ................................................................................ 158 5. General Motors (2014) (Sections 8 and 27):................................................................... 158 6. Honda (Sections 4.8 and 4.9): .......................................................................................... 158 7. Hyundai (Section 10): ...................................................................................................... 159 8. Kia (Section 10):............................................................................................................... 159 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Sections 1.1(p) and 14): .......... 159 10. Nissan (Section 33): ....................................................................................................... 160 11. Rivian (Section 32): ....................................................................................................... 160 12. Tesla (Section 15): .......................................................................................................... 160 13. Toyota (Section 2.7): ...................................................................................................... 160 14. Volkswagen (Section 21): .............................................................................................. 161 15. OESA (Section 16): ........................................................................................................ 161

VI. Excusable Delays/Force Majeure – Dashboard ............................................................... 163

VII. Dispute Resolution – Context and Questions ................................................................. 165

VII. Dispute Resolution – OEM Comparative Analysis ........................................................ 166

1. BMW: ............................................................................................................................... 166 2. FCA US (Section 26 and Annex A): ................................................................................ 166 3. Ford (Section 39): ............................................................................................................ 166 4. General Motors (2011) (Section 29): .............................................................................. 167 5. General Motors (2014) (Section 35): .............................................................................. 167 6. Honda: .............................................................................................................................. 167 7. Hyundai (Section 36): ...................................................................................................... 167 8. Kia (Section 36):............................................................................................................... 167 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Section 31): ............................. 167 10. Nissan: ............................................................................................................................ 168 11. Rivian (Section 45): ....................................................................................................... 168 12. Tesla (Sections 19 and 21.15): ....................................................................................... 168 13. Toyota (Sections 5.4 and 7.8): ....................................................................................... 168 14. Volkswagen (Sections 34 and 39): ................................................................................. 169



15. OESA (Section 20): ........................................................................................................ 169

PART FOUR ............................................................................................................................. 171

I. OEM’s Intellectual Property – Context and Questions ..................................................... 172

I. OEM’s Intellectual Property – OEM Comparative Analysis ........................................... 173

1. BMW (Sections 12.1 - 12.3, 13.1, 15 and 17): ................................................................. 173 2. FCA US (Sections 4, 10, 16, 17 and 18): ......................................................................... 173 3. Ford (Sections 15, 17, 35.03 and 46): .............................................................................. 173 4. General Motors (2011) (Sections 14 and 24):................................................................. 174 5. General Motors (2014) (Sections 23 and 30):................................................................. 174 6. Honda (Sections 8, 11.1 and 11.2): .................................................................................. 174 7. Hyundai (Sections 19, 24 and 25): .................................................................................. 175 8. Kia (Sections 19, 24 and 25): ........................................................................................... 175 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Sections 6.3(e), 15.1, 25.1 and 32): …………............................................................................................................................... 175 10. Nissan (Sections 15, 17, 22 and 23): .............................................................................. 175 11. Rivian (Sections 16.1, 16.2, 18.1, 19.1, 19.2, 19.4 and 19.5): ....................................... 176 12. Tesla (Sections 10.1, 10.3, 13 and 21.8): ....................................................................... 176 13. Toyota (Sections 2.1(b), 4.5, 4.6 and 5.6): ..................................................................... 177 14. Volkswagen (Sections 23, 24 and 29): ........................................................................... 177 15. OESA (Sections 10.1, 14 and 21.1): .............................................................................. 177

I. OEM’s Intellectual Property – Dashboard ......................................................................... 178

II. Supplier’s Intellectual Property – Context and Questions .............................................. 179

II. Supplier’s Intellectual Property – OEM Comparative Analysis ..................................... 181

1. BMW (Sections 12.2, 13.1, 15.3 and 17): ........................................................................ 181 2. FCA US (Sections 10, 16, 17 and 23): ............................................................................. 181 3. Ford (Sections 16, 17, 19 and 20): ................................................................................... 181 4. General Motors (2011) (Sections 14 and 15):................................................................. 182 5. General Motors (2014) (Sections 22, 23 and 29):........................................................... 182 6. Honda (Section 8): ........................................................................................................... 183 7. Hyundai (Section 19): ...................................................................................................... 183 8. Kia (Section 19):............................................................................................................... 183 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Sections 15.1, 20.1 and 25.1): . 183 10. Nissan (Sections 14, 15 and 22): .................................................................................... 184 11. Rivian (Sections 16.2 and 18.3): .................................................................................... 184 12. Tesla (Section 10.2): ....................................................................................................... 185 13. Toyota (Sections 4.5, 4.6 and 4.7): ................................................................................ 185 14. Volkswagen (Sections 22 and 24): ................................................................................. 185 15. OESA (Sections 10.2 and 14):........................................................................................ 186

II. Supplier’s Intellectual Property – Dashboard .................................................................. 187

III. Infringement – Context and Questions ............................................................................ 189

III. Infringement – OEM Comparative Analysis ................................................................... 191

1. BMW (Section 15): .......................................................................................................... 191



2. FCA US (Sections 8 and 18): ........................................................................................... 191 3. Ford (Section 21): ............................................................................................................ 191 4. General Motors (2011) (Section 14): .............................................................................. 192 5. General Motors (2014) (Section 24): .............................................................................. 192 6. Honda (Section 6.1): ........................................................................................................ 192 7. Hyundai (Sections 12(c) and 19(a)): ................................................................................ 192 8. Kia (Sections 12(c) and 19(a)): ........................................................................................ 192 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Sections 15.2 and 15.3): .......... 192 10. Nissan (Section 16): ....................................................................................................... 193 11. Rivian: (Section 16.2, 16.3 and 22): .............................................................................. 193 12. Tesla (Section 8.1): ......................................................................................................... 193 13. Toyota (Section 4.6(e)): ................................................................................................. 193 14. Volkswagen (Sections 22 (e) and (f)): ........................................................................... 194 15. OESA (Section 10.3): ..................................................................................................... 194

III. Infringement – Dashboard ................................................................................................ 195

PART FIVE . ............................................................................................................................. 197

I. OEM-Owned Tooling and Other Property – Context and Questions .............................. 198

I. OEM-Owned Tooling and Other Property – OEM Comparative Analysis .................... 201

1. BMW (Section 13): ........................................................................................................ 201 2. FCA US (Section 10): .................................................................................................... 201 3. Ford (Sections 15, 32.01 and 34): .................................................................................. 202 4. General Motors (2011) (Section 19): ............................................................................ 202 5. General Motors (2014) (Section 22): ............................................................................ 203 6. Honda (Sections 8.1 and 17): ......................................................................................... 203 7. Hyundai (Section 16): .................................................................................................... 204 8. Kia (Section 16 and 41): ................................................................................................. 204 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”): ................................................ 204 10. Nissan (Sections 17, 18 and 39): .................................................................................... 205 11. Rivian (Section 19.1, 19.2, 19.3 and 19.4): .................................................................... 206 12. Tesla (Section 11.1): ....................................................................................................... 206 13. Toyota (Sections 3.1(f), 3.2(c), 3.6, 3.10-3.11 and 4.5): ................................................ 207 14. Volkswagen (Section 23): .............................................................................................. 207 15. OESA (Section 11.1): ..................................................................................................... 208

I. OEM-Owned Tooling and Other Property – Dashboard .................................................. 209

II. Payment for OEM-Owned Tooling – Context and Questions ......................................... 210

II. Payment for OEM-Owned Tooling – OEM Comparative Analysis ................................ 212

1. BMW (Section 13.9): ..................................................................................................... 212 2. FCA US (Section 10): .................................................................................................... 212 3. Ford (Sections 34.04, 34.15 and 34.16): ........................................................................ 212 4. General Motors (2011):................................................................................................. 212 5. General Motors (2014):................................................................................................. 212 6. Honda: ............................................................................................................................ 212 7. Hyundai:......................................................................................................................... 213



8. Kia (Section 41):............................................................................................................ 213 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Sections 6.1 and 6.2): ............ 213 10. Nissan (Section 18): ....................................................................................................... 213 11. Rivian: ............................................................................................................................ 214 12. Tesla (Section 11.1(c)): .................................................................................................. 214 13. Toyota (Sections 3.45 and 3.11): ................................................................................... 214 14. Volkswagen (Section 26): .............................................................................................. 214 15. OESA (Section 11.1): ..................................................................................................... 215

II. Payment for OEM-Owned Tooling – Dashboard ............................................................. 216

III. Supplier-Owned Tooling – Context and Questions ......................................................... 217

III. Supplier-Owned Tooling – OEM Comparative Analysis ............................................... 218

1. BMW (Sections 13.4-13.6 and 13.8): ............................................................................. 218 2. FCA US: ......................................................................................................................... 218 3. Ford (Section 35): .......................................................................................................... 218 4. General Motors (2011) (Section 18): ............................................................................ 218 5. General Motors (2014) (Section 21): ............................................................................ 218 6. Honda: ............................................................................................................................ 219 7. Hyundai (Section 15): .................................................................................................... 219 8. Kia (Sections 15 and 41): ............................................................................................... 219 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Sections 6.7 and 6.8): ............ 219 10. Nissan (Section 18.1): .................................................................................................... 219 11. Rivian: ............................................................................................................................ 219 12. Tesla (Sections 11.1 and11.2): ....................................................................................... 219 13. Toyota (Section 3.3): ...................................................................................................... 220 14. Volkswagen (Section 25): .............................................................................................. 220 15. OESA (Section 11.2): ..................................................................................................... 220

III. Supplier-Owned Tooling – Dashboard ............................................................................. 221

PART SIX … ............................................................................................................................. 223

I. Advertising – Context and Questions .................................................................................. 224

I. Advertising – OEM Comparative Analysis......................................................................... 225

1. BMW (Section 12.3): ....................................................................................................... 225 2. FCA US (Section 16): ...................................................................................................... 225 3. Ford (Section 46): ............................................................................................................ 225 4. General Motors (2011) (Section 24): .............................................................................. 225 5. General Motors (2014) (Section 30): .............................................................................. 225 6. Honda (Section 11.2): ...................................................................................................... 225 7. Hyundai (Section 24): ...................................................................................................... 225 8. Kia (Section 24):............................................................................................................... 225 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Section 32): ............................. 226 10. Nissan (Section 23): ....................................................................................................... 226 11. Rivian: ............................................................................................................................ 226 12. Tesla (Section 21.2): ....................................................................................................... 226 13. Toyota (Section 5.6): ...................................................................................................... 226



14. Volkswagen (Section 29): .............................................................................................. 226 15. OESA (Section 21.1): ..................................................................................................... 226

II. Audit and Inspection Rights – Context and Questions .................................................... 227

II. Audit and Inspection Rights – OEM Comparative Analysis ........................................... 228

1. BMW (Sections 9.4, 21.5 and 21.8): ................................................................................ 228 2. FCA US (Sections 10, 12 and 21): ................................................................................... 228 3. Ford (Sections 17 and 32): ............................................................................................... 228 4. General Motors (2011) (Sections 2, 6 and 13):............................................................... 228 5. General Motors (2014) (Sections 15 and 34):................................................................. 229 6. Honda (Sections 8.1, 8.2 and 16): .................................................................................... 229 7. Hyundai (Sections 11, 23 and 29): .................................................................................. 229 8. Kia (Sections 11, 23 and 29): ........................................................................................... 229 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Sections 20 and 25): ................ 229 10. Nissan (Sections 22, 23A and 24): ................................................................................. 230 11. Rivian (Section 25): ....................................................................................................... 230 12. Tesla (Sections 13 and 21.5): ......................................................................................... 230 13. Toyota (Sections 3.6 and 4.6): ....................................................................................... 230 14. Volkswagen (Sections 7 and 17): ................................................................................... 230 15. OESA (Sections 4, 14 and 21.2): ................................................................................... 231

III. Labor Disputes – Context and Questions ......................................................................... 232

III. Labor Disputes – OEM Comparative Analysis ............................................................... 233

1. BMW (Sections 3.6-3.8): ................................................................................................. 233 2. FCA US (Section 7): ........................................................................................................ 233 3. Ford (Section 38): ............................................................................................................ 233 4. General Motors (2011) (Section 8): ................................................................................ 233 5. General Motors (2014) (Section 8): ................................................................................ 233 6. Honda (Section 4.8): ........................................................................................................ 233 7. Hyundai (Section 9): ........................................................................................................ 233 8. Kia (Section 9):................................................................................................................. 234 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Section 14.3): .......................... 234 10. Nissan (Section 18B): ..................................................................................................... 234 11. Rivian (Section 34): ....................................................................................................... 234 12. Tesla (Section 16): .......................................................................................................... 234 13. Toyota (Section 2.7(d)): ................................................................................................. 235 14. Volkswagen (Section 21): .............................................................................................. 235 15. OESA (Sections 16 and 17):........................................................................................... 235

IV. Import and Export – Context and Questions .................................................................. 236

IV. Import and Export – OEM Comparative Analysis ......................................................... 239

1. BMW (Section 8): ............................................................................................................ 239 2. FCA US (Sections 15 (a) – (f)): ....................................................................................... 239 3. Ford (Section 10.04): ....................................................................................................... 240 4. General Motors (2011) (Section 22): .............................................................................. 240 5. General Motors (2014) (Sections 18 and 32):................................................................. 240



6. Honda (Sections 3.2(b), 3.3, 12.1, 12.2, 12.3 and 12.4): ................................................. 240 7. Hyundai (Sections 22 (a) – (e)): ...................................................................................... 241 8. Kia (Sections 22 (a) – (e)): ............................................................................................... 241 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Sections 7.1, 7.2, 7.3, 7.4, 7.5, 7.6 and 7.7): ................................................................................................................................ 242 10. Nissan (Section 40): ....................................................................................................... 242 11. Rivian (Section 10 and 14): ............................................................................................ 242 12. Tesla (Sections 4.7 and 17): ........................................................................................... 242 13. Toyota (Sections 5.7 (a) and (b)): .................................................................................. 243 14. Volkswagen (Section 6): ................................................................................................ 243 15. OESA (Section 18): ........................................................................................................ 244

IV. Import and Export – Dashboard....................................................................................... 245

V. Suppliers with Special Needs – Context and Questions.................................................... 247

V. Suppliers with Special Needs – OEM Comparative Analysis .......................................... 248

1. BMW (Section 20): .......................................................................................................... 248 2. FCA US (Section 25): ...................................................................................................... 248 3. Ford (Section 36.02): ....................................................................................................... 248 4. General Motors (2011):................................................................................................... 248 5. General Motors (2014):................................................................................................... 248 6. Honda: .............................................................................................................................. 248 7. Hyundai (Section 33): ...................................................................................................... 248 8. Kia (Section 33):............................................................................................................... 248 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Section 34): ............................. 248 10. Nissan: ............................................................................................................................ 249 11. Rivian ............................................................................................................................. 249 12. Tesla: .............................................................................................................................. 249 13. Toyota: ........................................................................................................................... 249 14. Volkswagen: ................................................................................................................... 249 15. OESA:............................................................................................................................. 249

VI. Electronic Communication – Context and Questions ..................................................... 250

VI. Electronic Communication – OEM Comparative Analysis............................................ 251

1. BMW (Sections 7.1 and 16): ............................................................................................ 251 2. FCA US (Section 27): ...................................................................................................... 251 3. Ford (Section 44): ............................................................................................................ 251 4. General Motors (2011) (Section 2): ................................................................................ 251 5. General Motors (2014) (Section 17): .............................................................................. 251 6. Honda (Sections 2.2 and 2.3): .......................................................................................... 251 7. Hyundai (Section 38): ...................................................................................................... 251 8. Kia (Section 38):............................................................................................................... 251 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Section 12): ............................. 251 10. Nissan (Section 1): ......................................................................................................... 251 11. Rivian (Section 44): ....................................................................................................... 251 12. Tesla (Section 21.6): ....................................................................................................... 252 13. Toyota (Sections 1.4 and 6): .......................................................................................... 252



14. Volkswagen: ................................................................................................................... 252 15. OESA (Section 21.3): ..................................................................................................... 252

VII. Compliance with Laws and Applicable Law – Context and Questions ....................... 253

VII. Compliance with Laws and Applicable Law – OEM Comparative Analysis.............. 254

1. BMW (Sections 10.1, 20 and 22): .................................................................................... 254 2. FCA US (Sections 24 and 26): ......................................................................................... 254 3. Ford (Sections 36, 37 and 39.07): .................................................................................... 254 4. General Motors (2011) (Sections 25 and 29):................................................................. 254 5. General Motors (2014) (Sections 14 and 31):................................................................. 255 6. Honda (Sections 3.2, 5.2, 14.7 and 14.8): ........................................................................ 255 7. Hyundai (Sections 32 and 36):......................................................................................... 255 8. Kia (Sections 32 and 36): ................................................................................................. 256 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Section 31): ............................. 256 10. Nissan (Sections 35, 36 and 40): .................................................................................... 256 11. Rivian (Section 45): ....................................................................................................... 256 12. Tesla (Sections 9, 21.3 and 21.15): ................................................................................ 256 13. Toyota (Sections 4.3 and 7.2): ....................................................................................... 257 14. Volkswagen (Sections14, 34 and 37): ............................................................................ 257 15. OESA (Sections 9 and 21.10):........................................................................................ 258

VIII. Relationship of the Parties – Context and Questions ................................................... 259

VIII. Relationship of the Parties – OEM Comparative Analysis ......................................... 260

1. BMW: ............................................................................................................................... 260 2. FCA US: ........................................................................................................................... 260 3. Ford: ................................................................................................................................. 260 4. General Motors (2011) (Section 28): .............................................................................. 260 5. General Motors (2014) (Section 38): .............................................................................. 260 6. Honda: .............................................................................................................................. 260 7. Hyundai (Section 35): ...................................................................................................... 260 8. Kia (Section 35):............................................................................................................... 260 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Section 28): ............................. 260 10. Nissan (Section 31): ....................................................................................................... 260 11. Rivian (Section 37): ....................................................................................................... 261 12. Tesla (Section 21.7): ....................................................................................................... 261 13. Toyota (Section 5.1): ...................................................................................................... 261 14. Volkswagen (Section 30): .............................................................................................. 261 15. OESA (Section 21.4): ..................................................................................................... 261

IX. Ingredients – Context and Questions ................................................................................ 262

IX. Ingredients – OEM Comparative Analysis ...................................................................... 263

1. BMW (Section 19): .......................................................................................................... 263 2. FCA US (Section 28): ...................................................................................................... 263 3. Ford (Sections 24.04 and 24.05): ..................................................................................... 263 4. General Motors (2011) (Section 10): .............................................................................. 263 5. General Motors (2014) (Section 14): .............................................................................. 263



6. Honda: .............................................................................................................................. 263 7. Hyundai (Sections 5 and 12(d)): ...................................................................................... 264 8. Kia (Sections 5 and 12(d)):............................................................................................... 264 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Section 35.2): .......................... 264 10. Nissan (Section 38): ....................................................................................................... 264 11. Rivian ............................................................................................................................. 264 12. Tesla (Sections 9 and 21.4): ........................................................................................... 264 13. Toyota (Section 4.4): ...................................................................................................... 264 14. Volkswagen (Section 5): ................................................................................................ 264 15. OESA (Section 9): .......................................................................................................... 265

X. Insurance – Context and Questions .................................................................................... 266

X. Insurance – OEM Comparative Analysis .......................................................................... 267

1. BMW (Section 18): .......................................................................................................... 267 2. FCA US (Section 11(a)): .................................................................................................. 267 3. Ford (Section 34.18): ....................................................................................................... 267 4. General Motors (2011) (Section 17): .............................................................................. 267 5. General Motors (2014) (Section 28): .............................................................................. 267 6. Honda (Section 7): ........................................................................................................... 267 7. Hyundai (Section 17): ...................................................................................................... 268 8. Kia (Sections 17 and 41): ................................................................................................. 268 9. Mercedes-Benz U.S. International, Inc. (“MBUSI”) (Section 24.4): .......................... 268 10. Nissan (Section 18A):..................................................................................................... 268 11. Rivian (Section 21): ....................................................................................................... 269 12. Tesla (Section 18): .......................................................................................................... 269 13. Toyota (Section 5.3): ...................................................................................................... 269 14. Volkswagen (Section 16): .............................................................................................. 269 15. OESA (Section 19): ........................................................................................................ 270

Appendix A – Documents Referenced in OEM Terms and Conditions

Appendix B – 2011 Original Equipment Suppliers Draft Model General Terms and Conditions

Supplement – General Motors General Terms and Conditions for Collaborative Contract Management for Global Emerging Market (GEM) Programs


2017 Original Equipment Suppliers Association, All Rights Reserved

PART ONE

I. Contract Formation 21 II. Contract Changes 33 III. Assignment and Subcontracting 42 IV. Expiration and Termination 51


2017 Original Equipment Suppliers Association, All Rights Reserved

I. Contract Formation – Context and Questions

1. Not a “Legal Technicality”

When auto industry disputes wind up in court, more often than not, the dispute centers on what documents make up the contract, rather than what those documents mean. For example, a Supplier’s bid may condition its price quote on volume and raw material assumptions. When volumes disappoint and raw material prices soar, the Supplier’s right to relief may be determined by whether the bid is part of the contract and, as many Suppliers have painfully learned, if the Supplier did not make the bid part of the production Purchase Order, the answer may be unsettled and the risks high.

This means that Suppliers must understand that contract formation is not a legal technicality. Once the contract is formed, it is often too late for the Supplier to protect itself. The lesson is clear: If an assumption, past practice, understanding, or document is critical to the Supplier, the Supplier should do all that it can to see that it is specifically included in the contract.

2. Lack of Actual Agreement = Uncertainty

All OEMs attempt to say, in varying ways, that the goods are sold on their terms, and only their terms, as stated in the OEM’s Purchase Order and standard Terms and Conditions, regardless of whether the Supplier expressly agreed to the terms, objected to the terms, or proposed different terms. Despite the OEM’s endeavor to have its terms control, when the OEM and Supplier do not expressly agree on the terms, and particularly when they exchange conflicting terms, there is room for uncertainty and argument as to the actual terms of the parties’ agreement. As stated in the leading treatise:

[T]here is no language that a lawyer can put on a form that will always assure the client of forming a contract on the client’s own terms. . . . [T]he only answer may be to raise the price, buy insurance, or—as a last resort---have an extra martini every evening and do not capitalize the corporation too heavily.3

3. Battle of the Forms Does Not Eliminate Uncertainty

UCC 2-2074 provides rules for resolving these “battle of the forms” disputes.5 Although extensive consideration of the nuances of UCC 2-207 is beyond the scope of this Comparative Analysis, it is indisputable that the rules are complex and often provide unclear or unsatisfactory answers. UCC 2-207 often turns on elusive questions, such as whether a particular communication is an offer, whether a Supplier’s response to a RFQ is

3 White and Summers, Uniform Commercial Code, Fourth Ed., §1-3, p. 31. 4 UCC 2-207 states in part: Between merchants [additional or different] terms become part of the contract unless:

(i) the offer expressly limits acceptance to the terms of the offer; (ii) they materially alter it; (iii) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.

5 It is notable that Toyota and VW’s standard terms expressly provide that UCC 2-207 does not apply. (See the comments to the Toyota terms regarding the possible effect of the exclusion of 2-207.)



I. Contract Formation – OEM Comparative Analysis

1. BMW (Sections 1.1, 1.2, 2.1 and 2.2):

• Agreement consists of: (i) Purchase Order; (ii) standard terms; and (iii) any applicable framework supply agreement.

• BMW uniquely does not include a separate “integration clause,” but § 2.1 does state that any additional or different Terms and Conditions are expressly excluded and are not part of the parties’ contract.

The lack of an integration clause increases the possibility of a court finding that a prior agreement is included in the Agreement. Nevertheless, a Supplier is at considerable risk if the prior agreement is not referenced in the Purchase Order.

• Acceptance is by signed acknowledgment or by any “performance in relation to purchase order.”

• Supplier must give a written acknowledgement of acceptance within 14 working days after receipt of the Purchase Order. BMW may revoke a Purchase Order if not accepted (by acknowledgement or performance) within 14 working days.

• Acceptance is limited to the terms of the Purchase Order.

• Additional or different terms presented by Supplier are excluded.

• The Purchase Order will prevail over the Terms and Conditions in the event of a discrepancy, contradiction, or inconsistency.

• Each Purchase Order is a separate and individual Supply Contract. 2. FCA US (Sections 1 and 2):

• Agreement consists of: (i) Purchase Order; (ii) standard terms; (iii) FCA US supplemental clauses that are referenced in the Purchase Order; and (iv) other documents referenced in the Purchase Order.

FCA US uniquely relies on incorporated standard clauses regarding basic terms. For example, other OEMs have a single standard termination provision in their standard terms, while FCA US maintains a menu of termination clauses in its Supplier Portal from which it picks and incorporates by reference for each Purchase Order. This “menu” approach leads to greater variability in FCA US contracts than other OEMs.

Prior agreements will likely not be part of the Agreement unless referenced in the Purchase Order.

• Acceptance is by signed acknowledgment (including electronic communication), by delivery of parts, rendering of services, or by commencement of work after Seller’s receipt of the Order.

• Acceptance is limited to the terms of the Purchase Order.



I. Contract Formation – Dashboard

Specific Provisions Provided in Terms and Conditions

BM

W

FCA

US

Ford

GM

201

1

GM

201

4

Hon

da

Hyu

ndai

Kia

MB

USI

Nis

san

Riv

ian

Tes

la

Toy

ota

VW

OE

SA

UCC 2-207 (Battle of the Forms) expressly disclaimed N N N N N N N N N N N

Y Y Y N

Performance = acceptance Y Y Y Y Y Y Y Y Y Y Y

Y Y Y Y(b)

Supplier failure to promptly object = acceptance N N N N N Y N N N N Y

Y N N Y(a)

Supplier signature expressly required for contract N N N N N N N N N N N

N N Y Y

Supplier terms rejected/excluded Y Y Y N Y Y Y Y Y Y Y

Y Y N N

Particular signatures of OEM executives required for effective modification?

N N Y N N N N N N N N

N N N N

Agreement (as defined in terms) is the complete and exclusive agreement

S Y Y Y Y Y Y Y Y Y Y

S Y Y Y

Agreement (as defined in terms) expressly supersedes all prior agreements

S Y Y Y Y S Y Y Y Y Y

Y Y Y Y

General Notes

1. The Dashboard is intended to provide a simple, high-level comparison among the OEM and OESA Terms and Conditions on certain basic issues. It is necessarily over-simplified, omitting limitations, exceptions and nuanced distinctions regarding the contract terms, and it should be used accordingly.

2. For each question or statement, the response is either Yes (“Y”), No (“N”) or Silent (“S”). “Yes” indicates that there is an express provision responding affirmatively. “No” indicates that there is an express provision responding negatively. “Silent” indicates that there is no express provision and that there may be a default rule of law under the UCC or other applicable rules of law which provide for the right in the absence of an agreement to the contrary.

3. All Terms and Conditions of Purchase provisions have to be construed in light of the UCC and other law which may provide a “gap filler” term or a gloss on an express contract term.

Specific Notes

(a) If combined with commencement of performance.

(b) Unless objected to within 10 days.



PART TWO

I. Releases and Delivery 63

II. Packing, Marking, and Shipping 73 III. Inspections and Non-Conforming Parts 78 IV. Supplier Quality 85 V. Service Parts 91 VI. Invoices and Payment 97 VII. Taxes 102 VIII. Setoff 106



PART THREE

I. Parts Warranty 113 II. Recall 124 III. Price Warranty 130 IV. Indemnification and Product Liability 133 V. Default and Remedies 141 VI. Excusable Delays/Force Majeure 154 VII. Dispute Resolution 164



PART FOUR

I. OEM’s Intellectual Property 170 II. Supplier’s Intellectual Property 177 III. Infringement 187



PART FIVE

I. OEM-Owned Tooling and Other Property 196

II. Payment for OEM-Owned Tooling 208 III. Supplier-Owned Tooling 215



PART SIX

I. Advertising 221 II. Audit and Inspection Rights 224 III. Labor Disputes 229 IV. Import and Export 233 V. Suppliers with Special Needs 244 VI. Electronic Communication 247 VII. Compliance with Laws and Applicable Law 250 VIII. Relationship of the Parties 256 IX. Ingredients 259 X. Insurance 263

OESA DRAFT MODEL GENERAL TERMS AND CONDITIONS OCTOBER 2011

2017 Original Equipment Suppliers Association, All Rights Reserved B1

Appendix B - 2011 Original Equipment Suppliers Association Draft Model General Terms and Conditions



Original Equipment Suppliers Association

Draft Model General Terms and Conditions

With Comments

The Original Equipment Suppliers Association www.oesa.org 248.952.6401

http://www.oesa.org/



TABLE OF CONTENTS

1. The Contract 1.1 Offer and Acceptance ......................... 1 1.2 Changes ............................................. 2

1.3 Other Changes .................................... 2

2. Products and Services 2.1 Quantity ............................................. 2 2.2 Current-Model Service

Requirements .................................. 3 2.3 Past-Model Service Requirements ...... 3

3. Delivery 3.1 Packing and Shipment ....................... 3 3.2 Delivery Schedules ............................. 4

4. Inspection ...................................................... 4

5. Taxes .............................................................. 4

6. Payment ......................................................... 4

7. Product Warranties 7.1 Seller’s Warranties ............................ 5 7.2 Non-Conforming Products ................. 5 7.3 Recalls ................................................ 5

8. Product Liability 8.1 Indemnification .................................. 6 8.2 Procedure .......................................... 6

9. Compliance with Laws ................................. 7

10. Intellectual Property Rights 10.1 Buyer’s Intellectual Property ............. 7 10.2 Seller’s Intellectual Property ............. 7 10.3 Infringement ....................................... 7

11. Property 11.1 Buyer’s Property ................................ 8 11.2 Seller’s Property ................................ 9

12. Term and Termination 12.1 Generally ........................................... 9 12.2 Long-Term Contracts ........................ 9 12.3 Short-Term Contracts ...................... 10 12.4 Property Orders .............................. 10

13. Default 13.1 Events of Default ............................. 10 13.2 Remedies .......................................... 11

14. Confidential Information ........................... 12

15. Assignment and Subcontracting .............. 12

16. Excusable Non-Performance .................... 13

17. Labor Contracts ........................................... 13

18. Customs ...................................................... 14

19. Insurance .................................................... 14

20. Dispute Resolution 20.1 Negotiation and Mediation .............. 14 20.2 Arbitration ....................................... 14 20.3 Litigation ......................................... 14

21. Miscellaneous 21.1 Advertising ...................................... 15 21.2 Audit Rights ..................................... 15 21.3 Electronic Communication .............. 15 21.4 Relationship of the Parties .............. 15 21.5 Waiver ............................................. 15 21.6 Entire Agreement ............................. 15 21.7 Severability ...................................... 15 21.8 Interpretation .................................. 16 21.9 Notices ............................................. 16 21.10 Governing Law ................................ 16

These Draft Model General Terms and Conditions were designed for use in connection with the purchase and sale of automotive original equipment parts. OESA developed the Model Terms to promote a more collaborative approach to supplier-customer relationships. The goal is to increase cooperation, communication, and trust between buyers and sellers, eliminate ambiguities in responsibilities, reduce transaction costs, increase certainty, and ultimately increase the industry’s competitiveness. The Model Terms should serve as a reference guide and educational tool for buyers and sellers, and may help form the basis for fair and balanced contracts. USE OF THE MODEL TERMS IS ENTIRELY VOLUNTARY. Price and other terms of sale are determined by the buyer and seller in every transaction, and the Model Terms and Conditions are not intended to affect that negotiating process. Buyers and sellers are always free to negotiate whatever



terms or conditions they believe appropriate and are able to agree upon in the specific situation. Each buyer and seller should independently decide whether the Model Terms are appropriate for the company or transaction. Under no circumstances should buyers or sellers discuss with their competitors the specific terms and conditions they should adopt in particular negotiations, or agree collectively not to deal with a company refusing to adhere to the recommendations in this document or any other particular terms and conditions.

Original Equipment Suppliers Association OESA NA Terms and... · BMW Group International Terms and...

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Transcript of Original Equipment Suppliers Association OESA NA Terms and... · BMW Group International Terms and...