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Purchase Order

General Terms

Unless signed and sealed by the supplier within 3 working days, this PO shall be deemed to be void and Hi-P is entitled to cancel this PO.


Unless is within the last 10 days before delivery, Hi-P is entitled to change or cancel this PO anytime.


This PO only is applicable to purchasing raw material, wrapper and parts. If this PO is used for other business range of product purchase, which including but not limited to equipment, plant or service purchase, Hi-P is entitled to withdraw the PO, at supplier's cost, at any time even after acceptance.


Please refer to this link http://www.hi-p.com/po-general-term.php to comply with integrated PO terms and conditions, The seal and signature of the supplier on this page shall be deemed to confirm acceptance all the conditions and terms in Hi-P Lan. In the event of any inconsistency between these terms and the terms in any contract signed between the parties herein, the terms in the contracts will prevail.


INCOTERMS: DDP

Payment term: No later than 90 days after Invoice date and subject to any set-off by Hi-P for rejected products

Notes:

* Payments will be made in RMB for material price that are determined in USD. The RMB payments are converted based on the average exchange rate issued by Bank of China, ruling at the last trading day in the preceding month prior to payment.

* Please input invoice number and the supplier code in all your delivery original documents submitted to Hi-P before payment as necessary condition. Mentioned documents show all obligations which are fixed and valid in the current terms and conditions.


Packing and Shipment Terms

1. All products shall be packed with and in materials and containers suitable for long distance ocean/parcel post/air freight or truck transportation and shall be protected against any change in climate, moisture and shocks, to ensure that all products would be delivered safely. Seller will package the Products for shipment in accordance with the standard commercial practices acceptable to common carriers.

2. One full set of packing list and invoice, stating clearly the PO No., product code, quantity and product description and instructions shall be enclosed together with the product.

3. Seller will mark the Products for shipment as 'in compliance with dealing procedure and operations regulation' stated terms. Product description, instructions, code and quantity shall be marked distinctly outside each container and each individually packed product.

4. Hi-P is entitled to reject products which do not conform to contractual packing requirements.

5. Please give a clear indication of PO number and Hi-P SAP part number in the Packing list, invoice and external label. Seller' s container, delivery bill and invoice shall display (a) the date of shipment, (b) PO No. and SAP material No. of buyer (c) the Product Part Number, (d) manufacture date (e) the Product revision level (f) and lot number and (g) the quantity in the container.

6. Buyer will reject product and payment or even withdraw the order in the event the seller can not match the above requirements.


Quality Requirement

1. The supplier warrants that the product is produced by the original manufacturer. The supplier shall not change the product model and/or specifications or manufacturer without the prior written agreement of Hi-P.

2. The supplier warrants that its product shall meet or surpass Hi-P's quality requirements, and no less than the highest industrial standard of the buyer's location. All products shall be according to ROHS direction and other applicable law and regulations for banned or restricted substances. The supplier shall provide Hi-P with a quality guarantee letter, Environmental Declaration Letter, Material Content testing report and certificate of origin of product upon request.

3. The supplier shall inform Hi-P immediately in the event of any change in the product usage instructions and/or storage conditions, engineering and process change. The supplier shall repair or replace defective products immediately as may be decided by Hi-P in its sole discretion.

4. The supplier should provide the COC or OQC report while delivering goods to Hi-P, All products shall carry a warranty period of 1 years at least from the date of COC or OQC report.


Inspection Standard and Liabilities

1. All products shall meet the technical specifications of Hi-P.

2. Hi-P shall be allowed to inspect the product to ensure that it conforms to Hi-P's required quality, quantity, technical specifications and packaging. The supplier shall provide the shipping inspection report or certification together with the product or in advance to Hi-P.

3. Hi-P may in its sole discretion reject products that do not comply with requirements under the PO or contract, or defective products or a consignment containing defective products at any time during the warranty period and shall inform supplier of such rejection. If supplier disobey quality assumpsit, to the rejected products, Hi-P take choice or paratactic claim as below :

1) Return the product in whole or partially, and the cost of delivery to the supplier shall be borne by the supplier;

2) Request for a replacement of the product: the supplier shall replace the defective or rejected product within 1 day after Hi-P issues notice of the same, and the supplier shall bear all cost of replacement and delivery of new products;

3) Devalue the product: at a discount of 30%-50%; and/or

4) Claim damages: at the rate of 50%-100% of the total price of the invoice to which these products fall under.

4. In the event that the supplier is unable to replace a batch containing defective products in time, Hi-P shall mobilise personnel to individually sort out the non-defective products. The cost of such an exercise shall be borne by the supplier at the rate of RMB30/hour)

5. Products which do not comply with requirements under the PO or contractor defective products stored at Hi-P's premises shall be at supplier's cost and risk.

6. For direct material, the AQL(Acceptable Quality Level) is AQL=0.4 C=0, quality agreement shall apply if quality agreement is signed, unless otherwise stated in Hi-P incoming inspection plan.

7. As for the product tooling, the seller should offer integrated technical inspection report and material report for the Buyer's verification, the tooling product should be jointly inspected by QA &PMD of buyer, the written qualification report of buyer's QA&PMD as well as the adequacy delivery document with the Buyer signature and the original voucher on Seller's purchase material) are the required documents for the Seller to apply for payment and settlement, any absence of those qualifications should be regarded as flaws in the delivery, and the Buyer is entitled to refuse payment until all the documents mentioned herein before are made available.

8. Buyer's Property. Seller will return to Buyer any tools, drawings or other materials provided by Buyer at the termination of this Agreement or upon Buyer's request, failing which, the Seller shall compensate the Buyer in accordance to the market price of the equipment and tools.


Violation

1. The supplier shall deliver product on time as stipulated in PO.

1.1 The supplier shall pay Hi-P a penalty of 0.3% of PO's total price for each day that the delivery is delayed. If the delay is more than 15 days, Hi-P is entitled to rescind PO without any liability, penalty or obligation to the supplier.

1.2 Where there is a short-fall in delivery, Hi-P is entitled to (1) require the supplier to continue delivering, and bear overdue liabilities as stipulated in PO; or (2) rescind the PO.

2. The supplier shall not assign any of its contractual rights and obligations without the prior written consent of Hi-P. Any assignment without Hi-P's permission shall be null and void and Hi-P is entitled to rescind the PO and the supplier shall pay Hi-P double the amount Hi-P paid to supplier up to the date that Hi-P discovers this breach as penalty, as well as compensate Hi-P for all damages and losses suffered.


Force Majeure

Act of God, fires, floods, weather, or other catastrophes, epidemics or quarantine restrictions, riot or war, or other cause(s) ("Force Majeure") beyond the reasonable control of the affected party shall suspend the obligation of the affected party. The affected party shall promptly notify the other party of such Force Majeure event and its cause within 7 days and sanctified documents from local government by mail. Where the Force Majeure event causes the suspension of obligation for more than 21 days, either party may terminate this PO without liability, penalty or obligation to the other party.


Confidential Clause

Supplier shall not disclose any confidential information it receives from Hi-P.


Governing law and jurisdiction

This PO shall be governed by the laws of country and/or laws of the region where the Hi-P subsidiary issuing this PO is located, respectively. Each party should attempt to settle any disputes of this PO through amicable negotiations. In the event that no settlement can be reached, both parties agree to submit such dispute to the non-exclusive jurisdiction of the court at the buyer's business location. All legal costs and fees incurred thereby shall be borne by the losing party.


Language

In case of any inconsistency or discrepancy between the English and Chinese version regarding these terms, the Chinese version shall prevail for Hi-P subsidiaries located in mainland China. For other Hi-P subsidiaries located outside mainland China, the English version shall prevail.

Signing and effectiveness

This PO goes into effect after being sealed or signed by legally authorized personnel of Supplier without any modification. Supplier acknowledges that any individual's signature shall not represent or bind the Hi-P unless Hi-P confirm with common stamp legally. The Supplier agrees and acknowledges all the terms above and to fully comply with them.

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