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Supplier Terms and Conditions

Buying Agreement

This Agreement for the Buying of Goods ('Agreement') is entered into on the first date of Purchase Order issuance by the Buyer (‘the Effective Date'), by and between any individual or entity receiving one or more purchase orders (the "Seller"), and Microchip USA LLC, a Florida limited liability company, with its principal place of business at 501 East Kennedy Blvd., Suite 1400, Tampa, FL 33602 (the "Buyer"). In consideration of the mutual promises and conditions expressed herein, and other good and valuable consideration, Seller and Buyer agree as follows:

1. Description and Quantity of Goods. Seller shall transfer and deliver to Buyer, and Buyer shall accept and pay for the goods described in the Purchase Order (the 'Goods').

2. Delivery; Risk of Loss. Seller shall deliver the Goods to Buyer at a location specified in writing by the Seller, on or before a date specified in writing by the Seller within ten (10)
business days after placement of a Purchase Order, during regular business hours. Seller acknowledges that timely delivery of conforming Goods to the Buyer is of the essence. Seller agrees to pay all transportation and insurance charges incurred in delivering the Goods to the Buyer. Title and risk of loss will pass F.O.B. destination. Seller shall package the Goods in ANSI/ESD (i.e. moisture sensitivity, electro-static discharge (ESD) protected, dry-packed, vacuum sealed packaging applicable to all electronic components per ANSI standard) and in accordance with Buyer's reasonable instructions.

3. Inspection of Goods. Buyer shall have one (1) year from the date of arrival of the shipment of Goods at the shipping location designated by Buyer to inspect the Goods for any discrepancies in quality or quantity in its sole discretion, including, but not limited to Goods status as: remarked or containing remarked parts; failing inspection; counterfeit or containing counterfeit parts; retinned or containing retinned parts; improper function during or after testing; originating from incorrect Original Component Manufacturer (OCM); arriving in incorrect packaging type; previously used or containing previously used parts; inconsistent internal die marking or bond wiring; not aligning with manufacturer data sheet; being marked with a different manufacturing part number than that referenced on Buyer’s Purchase Order; quantities different from what is referenced on Buyer’s Purchase Order; or a change in unit price from that referenced on Buyer’s Purchase Order. Buyer shall notify Seller of any such discrepancies, in which event Seller shall arrange for the return of the non-conforming Goods at Seller's expense along with Return Merchandise Authorization (RMA) and shipping account information, and, based on Buyer’s election, Seller will either i) refund Buyer for all amounts paid for the non-conforming Goods within ten (10) business days of Buyer's notice and election or ii) cure the non-conforming issues within ten (10) business days of Buyer’s notice and election.

4. Price; Payment.  Buyer shall pay Seller the Purchase Order amount for the Goods within thirty (30) days after the Goods are received by the Buyer; however, if payment is made within ten (10) days of receipt of the Goods the Buyer shall be entitled to two percent (2%) discount.

5. Warranty.  Seller warrants that the title to the Goods shall be good and shall be free and clean of all security interests, liens, encumbrances and/or colorable claims, including any claims of patent infringement or the like; warrants that all the Goods shall be of merchantable quality, free from defects in material, design and workmanship, shall be fit for the particular purposes intended, and that any discrepancies will be subject to refund or cured with conforming goods per Section 3 above; are genuine, new, original, un-pulled, un-programmed, solderable, without bent or formed leads, test dot or other 3rd party markings; are contained in the original manufacturer’s packaging, marked with all original part number markings and codes, and of the grade and quality specified in accordance with all manufacturer or other specifications; have date codes no later than 36 months old, unless expressly stated otherwise in the purchase order; that all programmable devices are free of all pre-programming; for any Goods that have a shelf life, such Goods will have the greater of (i) 80% of their shelf life or (ii) two (2) years of shelf life remaining at the time of shipment; conform to the order, to specifications, drawings, and other descriptions referenced in the order, and to any accepted samples; shall be free from defects in materials and workmanship; shall be free from defects in design unless the design was supplied by Buyer; and shall be fit and safe for the intended purposes. Seller expressly warrants that the goods conform to all manufacturer or other agreed- to specifications, including, without limitation, compliance with substance prohibitions and restrictions set out in EU Directive 2002/95/EC, Restriction on Hazardous Substances (RoHS) and any other related or similar, implementing laws, rules, regulations, standards and restrictions within the United States, the European Community, China or other countries. Except for the warranties set forth in compliance with environmental and other regulations, all of which shall have the maximum warranty period allowed by law, the warranties herein shall extend for the longer of (i) one (1) year from Buyer’s receipt of the goods, or (ii) the warranty period provided by the manufacturer. Seller further warrants and affirms that, in the event of Seller’s failure to timely deliver the Goods under this Agreement or indication that it will not be able to deliver the Goods timely, Buyer shall have the same remedy for refund as it would have under Section 3(i) regarding for non-conforming goods upon written notice to Seller.

6. Governing Law; Venue; Alternative Dispute Resolution; Fees and Costs.  Except as otherwise provided for herein, this Agreement and all rights and obligations of the parties, shall be governed by the Uniform Commercial Code as enacted and in force in the State of Florida. The parties hereby agree that any action arising out of this Agreement must be preceded by the good-faith attempt to successfully mediate the case in accordance with USA&M mediation procedures that shall not impasse until the parties have participated in at least ten (10) hours of mediation. In the event of the impasse, the parties agree that they, in lieu of utilizing the state or federal court systems for litigation, will resort to binding arbitration in accordance with USA&M procedures as the sole means of dispute resolution after an unsuccessful mediation attempt. The arbitration shall be administered by the USA&M office for Jacksonville, FL or another similarly situated institution of Seller’s choosing within the State of Florida. The decision of the arbitrator will be final, non-appealable, enforceable, and binding on the parties.

If either party to this Agreement institutes a proceeding to enforce any provision of the Agreement, or for damages by reason of any breach of this Agreement or otherwise arising out of this Agreement, then the prevailing party will be entitled to recover from the other party all associated costs, including, without limitation, litigation costs and such amounts as the court or arbitrator may award as reasonable attorney’s fees and expenses for services rendered to the prevailing party during the proceedings.

7. Limitation on Liability. Seller agrees that the Buyer is not liable for the following: i) non-conforming Goods providing by Seller (e.g. the Goods fail tested, are deemed counterfeit, or are deemed non-conforming based on any of the conditions outlined in Section or which are attributable to Seller); ii) shipping mistakes (e.g. commercial invoice mistakes, country of origin (COO) designations, etc.) that result in tariffs or customs duties; or any matter which gives rise to a breach by Seller under this Agreement or negligence or other wrongful conduct by Seller or its employees, officers, agents, affiliates, subsidiaries, joint venturers, partners, contractors, or agents. Any costs or expenses or any kind caused by matters covered by this Section 7 shall be setoff and deducted from Buyer’s payment(s) to Seller in addition to any other remedies available to Buyer.


8. Indemnification. Seller acknowledges that Buyer is relying on Seller’s representations to timely provide conforming Goods consistent with this Agreement, purchase orders, and applicable law. Seller will indemnify Buyer and its employees, officers, agents, affiliates, subsidiaries, joint venturers, partners, and contractors against any and all liabilities, fines, fees, expenses, costs, attorney fees, damages, claims, or other losses relating to claim or actions that result from or arise this Agreement or in connection with products supplied by Seller whether they be used in the Buyer’s product, in combination with other products, or resold unless it is adjudicated by a court of competent jurisdiction that such claim was the result of Buyer’s gross negligence or intentional misconduct, which gross negligence or misconduct shall not include any alleged failure of Buyer to notice any defect, discrepancy, or non-conformity before, during, or after the inspection period set forth in Section 3 above. Seller will further indemnify Buyer against all liabilities for infringement of third-party intellectual property rights arising out of any transaction under this Agreement.

9. Severability. In the event that any term of this Agreement is deemed to be invalid, illegal or otherwise unenforceable (1) the parties shall use all reasonable efforts to negotiate in good faith to amend the term to eliminate any such invalidity, illegality, or unenforceability to the extent practically possible, taking into full account their original intent when entering into this Agreement in the first instance, and (2) the remaining provisions hereof shall continue in full force and effect.

10. Force Majeure and Excuses for Non-Performance. Time is of the essence of this Agreement, and Seller shall not be excused from performance based on any force majeure or other excuse for non-performance. In the event Seller cannot timely perform under this Agreement, Seller has an affirmative duty to promptly notify Seller of the event giving rise to non-performance so that Seller may proceed to elect remedies consistent with this Agreement.

11. Assignment . Neither party may transfer or otherwise transfer this Agreement, in whole or in part, without the prior written consent of the other party in each instance, such consent not to be unreasonably withheld, conditioned, or delayed. Notwithstanding the foregoing, Buyer shall be free to assign this Agreement in its entirety to any (1) affiliate of Seller or (2) successor entity of Seller that assumes all, or a majority of, such party’s assets in writing. Any assignment in violation of this clause shall be voidable at Buyer’s election.

12. Non-Disparagement . Buyer agrees that they will not, either in their own account or directly or indirectly in conjunction with or on behalf of any other person or entity, disparage or otherwise speak or write negatively about Seller or its employees, officers, agents, affiliates, subsidiaries, joint venturers, partners, and contractors.

13. Export Control Statements. Seller warrants that all Goods are in compliance with U.S. laws or the laws of the jurisdiction(s) applicable to the transaction. Seller warrants that Seller will not permit any products to be shipped in violation of U.S. laws, including U.S. export laws and U.S. hazardous materials laws. Seller assumes full responsibility for compliance with applicable export laws and hazardous materials laws prior to any export or shipment from or within the United States of Goods ordered by Buyer and agrees to hold harmless and indemnify Buyer from any damages, liabilities, costs and expenses of any kind, including attorney’s fees, relating to any violations of laws or regulation committed by Seller or its agents, employees, affiliates, subsidiaries, representatives, partners, joint venturers, successors, or related entities. Seller agrees to pay any taxes, tariffs or duties, associated with the import or export of products purchased from Buyer in full, without offset.

14. Confidential Information; Non-Solicitation of/Non-Interference with Customers, Clients, Vendors, and Employees. Parties understand that Confidential Information of Buyer incidentally disclosed to Seller under this Agreement is property of the Buyer, must only be used in the furtherance of this Agreement and for benefit of the Buyer and not for any other purpose, and Seller is not authorized to disclose or permit disclosure of the information to third parties. Such Confidential Information includes but is not limited to: all information relating to the Buyer’s products, business and operations including, but not limited to, business plans, financial records, customers, suppliers, vendors, products, product samples, costs, sources, strategies, inventions, procedures, sales aids or literature, sales data, technical advice or knowledge, contractual agreements, pricing, price lists, product white paper, product specifications, trade secrets, procedures, distribution methods, inventories, marketing strategies and interests, algorithms, data, designs, drawings, work sheets, blueprints, concepts, manufacturing processes, computer programs and systems, and know-how or other intellectual property of Buyer and/or any of its affiliates that may be at any time furnished, gleaned directly or incidentally, communicated to, accessed by, or otherwise delivered to Seller hereunder, whether in oral, tangible, electronic or other form, and whether or not labeled or otherwise described to Seller as being confidential in nature, and all other non-public information provided to, accessed by, or gleaned by Seller pursuant to the performance of this Agreement, including without limitation, financial, technical, and business information of the Buyer. Seller may not, directly or indirectly, solicit or attempt to solicit any business from any of the Buyer’s Agents, Customers, Clients, Vendors, or Employees until the expiration of the sixty (60) months after the termination of the relationship between Parties, regardless of the reason for the termination, During that period, Seller may not, directly or indirectly, on its own behalf or on behalf of or in conjunction with any person or legal entity, recruit, solicit, or induce, or attempt to recruit, solicit, or induce, any Agents, Customers, Clients, Vendors, or Employees of the Buyer to terminate their contractual or otherwise diminish their relationship with Buyer.

15. TOOLS, DRAWINGS, MATERIALS, ETC. Seller shall use all designs, tools, jigs, patterns, drawings, information, equipment, and other items ("Items") furnished by Buyer only in the production of the goods or performance of services called for herein. Seller shall exercise care with property belonging to customers or external providers while it is under the organization’s control or being used by the organization. Seller shall identify, verify, protect, and Buyer’s property provided for use or incorporation into the products and services. Buyer makes no warranty, express or implied, concerning the accuracy of any of the items it furnishes. All work must be in strict accordance with specifications, regardless of any deficiency in Items supplied by Buyer. Title to all Items furnished shall remain in Buyer, and upon completion or termination of this order all items shall be returned to Buyer or disposed of in accordance with Buyer's directions. When the property of Buyer is lost, damaged, or otherwise found to be unsuitable for use, Seller shall report this to the buyer and retain documented information on what has occurred. Seller shall assume all risk of loss of the Items or damage to persons or property (including to the Items) resulting in any way from Seller's possession or use of the Items, and Seller agrees to hold Buyer harmless from all Claims due to injury or damage to any person or property resulting directly or indirectly from the Items or use thereof.

16. Survival. Provisions of this Agreement concerning payments, confidentiality, non-disparagement & non-solicitation, indemnification, governing law, mediation & arbitration, and limitations on liability shall survive any termination or expiration of this Agreement.

17. Entire Agreement; Modification; Waiver. This Agreement is the entire agreement between the Parties with respect to the subject matter hereof and supersedes any prior agreement or communications between the parties, whether written, oral, electronic or otherwise. No change or modification to this Agreement shall be valid unless in writing and signed by an authorized representative of the parties. No waiver of any term or right in this Agreement shall be effective unless in writing, signed by an authorized representative of the waiving party. The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver or modification of such provision, or impairment of its right to enforce such provision or any other provision of this Agreement thereafter.

18. Acceptance by Seller. The terms and conditions of this Agreement are incorporated by reference into each and every Order of Buyer, and Buyer’s act of placing an Order to Seller shall constitute acceptance by Seller of these terms unless otherwise agreed in a writing signed an authorized agent of each party. Seller’s representation in this Section is a material inducement by Seller to Buyer regarding Buyer’s submission of orders for purchase of Goods.

19. Insolvency. In the event of the institution of any proceedings by or against Seller in bankruptcy or insolvency or under any provisions of the Bankruptcy Act or for the appointment of a receiver or trustee or an assignment for the benefit of creditors of either party, the other Buyer may terminate an order subject to this Agreement without further cost or liability in addition to any other remedies Buyer may have.

20. Conflict Minerals Policy. On August 22, 2012, the Securities and Exchange Commission adopted Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Conflict Minerals Law”). The Conflict Minerals Law requires all publicly traded companies to report annually to the SEC whether they use Conflict Minerals including gold, wolframite, casserite, columbite-tantalite and their derivative metals, which include tin, tungsten, tantalum and any other compounds designated by the U.S. Secretary of State. Suppliers are expected to provide all necessary due diligence information to confirm that all material supplied to Direct are Conflict-free. Suppliers are expected to pass this requirement onto their supply chain.

21. ITAR. The seller shall control the disclosure of, and access to, all technical data, information, hardware, and other items received under this Purchase Order in accordance with U.S. export control laws and regulations including, but not limited to, the International Traffic in Arms Regulations (ITAR, 22 CFR 120-130) and the Export Administration Regulations (EAR, 15 CFR Parts 730- 774). The Seller shall indemnify the Buyer for all liabilities, penalties, losses, damages, costs and/or expenses that may be imposed on, or incurred by, the Buyer in connection with any violations of these export control laws and regulations by the Seller.

22. Representation Regarding Status. Seller represents and warrants that it is not, and will not be at any time during the performance of this purchase order, listed or named on, or affiliated with a party listed or named on, the “Excluded Parties List System” or “EPLS,” as described in the Federal Acquisition Regulations (currently Section 9.404). In the event of a violation of this representation, without limiting its other rights and remedies, Buyer reserves the right to terminate this purchase order without penalty. As of the date of sale to Buyer, Seller shall immediately advise Buyer’s purchasing representative in writing if Seller is unable to make any warranty or representative set forth above for any item covered by this order. Do not ship such to Buyer unless instructed to do so in writing by Buyer’s purchasing representative.

23. Conditions Applicable Only If This Order Is Placed Under Government Contracts Or Subcontracts. If this order is placed pursuant to a Government prime contract or subcontract referenced by a number, DPAS rating, or otherwise in this purchase order, the following clauses set forth in the FAR and DFARS as in effect on the date hereof are incorporated herein by reference with the same force and effect as if set forth in full.