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Terms & Conditions of StockerYale Canada Inc. ('the Company')

1)      These terms and conditions of trade are effective from 'the date' and supersede any and all previously issued terms & conditions.

2)      References to "the Company" shall mean StockerYale Canada Inc. References to "the Customer" shall mean the purchaser of any goods or services produced or provided by The Company.

3)      Written purchase orders are required for all purchases. Each purchase order shall constitute a firm offer and shall indicate specific products and technical specifications where necessary, quantity, price, shipping instructions, bill and ship to addresses, and any other special instructions. Any contingencies contained on such order are non-binding upon the Company. All orders are subject to order acceptance by the Company who will accept or reject orders according to the terms and conditions as laid out below. These terms and conditions shall prevail over any conditions of contract which the Customer may seek to impose and no variation or addition to these terms shall be valid unless accepted in writing by an authorized representative of the Company.

4)      The Customer shall indemnify the Company against all damages, penalties, costs, and expenses to which the Company may become liable as a result of work done in accordance with the Customer's specifications which involves the infringement of any intellectual property right of a third party.

5)      Any time or date named by the Company for delivery is an estimate only and the Company shall not be liable for the consequences of any delay. Failure of the Company to make delivery on an estimated date shall not entitle the Customer to cancel the order or contract. Maximum period a blanket purchase is valid is twelve (12) months. Each shipment released from a blanket purchase order must be equal to $1000 or 8% of the order total, whichever is greater. The Company reserves the right to ship and invoice all remaining unshipped units at the end of the blanket order period.

6)      Where specifications are to be supplied by the Customer, the Customer shall provide such information to the Company to enable it to make delivery within the period agreed with the Company.

7)      Where the Company arranges for delivery of the goods to the Customer, it does so only as the agent of the Customer who shall bear the cost and risks of such an arrangement. Special packing materials where required may be charged extra and are non returnable. Delivery shall take place upon collection of the goods from the Company's premises by the Customer or the carrier responsible for transporting the goods to a destination specified by the Customer. Such transport shall be at the Customer's risk. Goods supplied to the Customer by the Company shall be at risk as soon as they are delivered to the Customer or otherwise to the order of the Customer or to vehicles for transmission to the Customer and the Customer shall arrange all insurances with respect to such goods and shall arrange all insurances until the Company has been paid the price of the goods in full.

8)      The Customer shall examine the goods forthwith upon receipt and shall within seven (7) days of such receipt report in writing to the Company any damage in transport or shortfall to enable a claim to be made to the carrier where appropriate. In case of any breakages, the Customer must retain the damaged goods and packing material for inspection. The Customer shall report in writing to the Company in the case of non-delivery within seven (7) days of despatch. The Company acts as the Customers agent in arranging carriage and cannot be responsible for any act, omissions or defaults on the part of the carrier.

9)      Unless otherwise explicitly stated all quotations provided by the Company for goods or services are valid for a period of thirty (30) days from date of quotation. After that period the Company may be required to adjust prices due to circumstances, including foreign exchange rate movement, commodity prices, or other unforeseen conditions.

10)    LIMITED WARRANTY AND REMEDIES. The Company makes no warranties or representations as to the products, except as set forth in this limited warranty statement. All Products are guaranteed to be free from material and manufacturing defects for a period of two (2) years with the exception of the following products listed below. The Customer's sole remedy for the breach of this warranty shall be to require the Company, in its sole discretion, to repair or replace FOB Company's facility at Montreal, Quebec, any defective Products. This express warranty shall extend to the Customer only, and is in lieu of all other warranties, express or implied, whether under common law, statute or otherwise, including the implied warranty of fitness for a particular purpose and merchantability.:

      . The warranty period shall be one (1) year for products with a wavelength lower than 635nm (including but not limited to all GLL, GTEC, and 375 to 473 nm Violet TEC series), all products in the Reduced Speckle Series (including but not limited to B680nm and B810nm), the PureBeam 635nm at 10mW and 30mW, and all products using a 635nm - 35mW and higher power diode.

      . For all Magnum series, the warranty period shall be four thousand (4000) hours or one (1) year (whichever comes first) for the laser diode chip and one (1) year for the electronic, optical, and mechanical components.

      .  For all PowerLine series, the warranty period shall be one (1) year.

      . For all HPTL series, the warranty period shall be six (6) months for the laser diode chip and one (1) year for the electronic, optical, and mechanical components.

         Should a product fail during the warranty period, the Company will, at its option, repair or replace the damaged unit. Repaired or replaced units shall be covered by the remainder of the original equipment warranty period. Any of the Company's products being returned must have prior authorization and a valid RMA number issued by the Company. This shall apply only to Products determined by the Company, in its sole discretion, to be defective and, without limitation, shall not apply in the event of any improper use, abuse, maintenance, use with spare or replacement parts not approved by Company, or any non-conformity to Company's installation instructions or any modifications to the Products made without the prior written approval of Company. Any tampering, misuse or negligence in handling or use of the Products renders the warranty void. Further, the warranty is void if, at any time, the Customer attempts to make any internal changes to any of the components of the Products; if at any time the power supplied to any part of the Products exceeds the rated tolerance; if any external device attached by the Customer creates conditions exceeding the tolerance of the Products; or if any time the serial number plate is removed or defaced.

11)    The Customer will be responsible for costs of transporting away defective goods and returning any such goods once they have been repaired or replaced. The Customer will be deemed to have accepted the goods supplied by the Company as complete and fit for purpose unless the Company is notified of any discrepancy or non-conformance in writing, such notice to be given within fourteen days from the date of shipping as stated on the goods delivery note, or where applicable the waybill.

12)    Upon credit approval by the Company, payment for goods and services is due within thirty days from date of invoice unless agreed otherwise in writing with the Company. First time customers whose orders total less than US $1000 must pay by recognized credit card. The Company reserves the right, without prejudice to any other rights which it may have, to charge interest at the rate of 3% over the Prime Rate currently in effect as published by the Bank of Canada on overdue accounts and such interest to run from day to day and accrue after as well as before any judgement.

13)    Goods supplied by the Company shall remain the property of the Company until the Company has received payment in full of all sums invoiced under each and every current contract between the Company and the Customer together with any interest accrued thereon and other charges. In the meantime the Company shall retain the full legal and beneficial title to the goods and the Customer shall hold the goods in a fiduciary capacity as the Company's bailee, free from charge, lien, or other encumbrance, shall store the goods separately and shall keep them fully insured with a reputable insurer. In this period the Company shall be entitled to recover possession of the goods (or any part of them) at any time and shall be entitled without restriction to lawfully enter upon the premises of the Customer for the purpose of removing the goods.

14)    The Company shall not be liable in respect of any breach of contract, nor the Customer have any right to rescind any contract or order if such failure is caused directly or indirectly beyond the reasonable control of the Company, including strikes, lockouts or other form of industrial action or non action of government, government departments or other competent authority, war, whether declared or not, or any action of any third parties for whom the Company is not responsible. The Company may terminate the contract immediately without notice or cause in the event the Customers becomes insolvent, has its goods or assets seized or ceases to trade.

15)    a) No cancellations or amendment of any order will be accepted unless received by the Company in writing at least 60 days before the delivery date notified by the Company to the Customer.

         b) Notwithstanding Section 15(a) above no cancellation or amendment of an order will be accepted where goods have been ordered or purchased by the Company to meet the Customer's requirements or where a special price has been negotiated with the Customer.

         c) The Company is entitled to recover all or any costs as a result of cancellation immediately.

         d) The charge for authorized returns under Section 15 (c) shall be based on how much of the goods are reusable by the Company in support of its regular business operations and in any case shall not be less than twenty percent (20%) of the invoiced value of the goods being returned.

16)    No returns are permitted without the Company's previous consent in writing and must be marked with a Return Material Authorisation (RMA) number, including returns accepted under the warranty contained in Clause 10. If the Company has issued an RMA for returns other than under the warranty contained in Clause 10, they must be returned at the Customer's expense in the original condition within thirty (30) days of the original delivery date and must be accompanied by the original Company's packing note together with the full reason for returning the goods.

17)    Defects in quality or quantity in any part delivery shall not be a reason for cancellation of the remainder of the order or contract.

18)    The Company does not undertake to install, commission, or otherwise get operational any equipment at the premises of the Customer unless specifically stated within the terms of any contract.

19)    This Agreement shall be governed and interpreted in accordance with the laws of the Province of Quebec, Canada, as such laws shall from time to time be in effect and shall in all respects be treated as a Quebec contract and the parties hereto agree to submit to the non-exclusive jurisdiction of the Courts of the Province of Quebec, Canada located in the judicial district of Montreal (Quebec).

20)    All amounts are ExWorks Dollard-des-Ormeaux, Quebec, Canada and are exclusive of any taxes, shipping charges, brokerage and/or customs duties unless otherwise stated.

StockerYale Canada Inc.

275 Kesmark, Dollard-des Ormeaux, QC, H9B 3J1 Canada