CALIFIA FARMS, LLC
STANDARD PURCHASE ORDER TERMS AND CONDITIONS
1. Applicability. A purchase order is an offer by Califia Farms, LLC (the “Buyer”) for the purchase of the goods specified on the face of the purchase order (the “Goods”) from the party to whom a purchase order is addressed (the “Seller”) in accordance with and subject to these terms and conditions (the “Terms”; together with the terms and conditions on the face of a purchase order, the “Purchase Order”). Seller hereby acknowledges and agrees that in accepting a Purchase Order, Seller agrees to be bound by Buyer’s standard terms and conditions set forth below, as the same may be in effect from time to time. These Terms, together with any documents incorporated herein by reference, constitutes the sole and entire agreement of the parties with respect to a Purchase Order, and supersede all prior or contemporaneous understandings, agreements, negotiations, representations and warranties, and communications, both written and oral, with respect to the subject matter of a Purchase Order.
a) Buyer is not obligated to any minimum purchase or future purchase obligations under any Purchase Order.
b) During the term of a Purchase Order, Seller shall comply with these Terms and all standards set forth in Buyer’s Code of Conduct, available at califiafarms.com/suppliers, which Seller hereby acknowledges and agrees it has read and understands.
2. Acceptance. No Purchase Order is binding on Buyer until Seller accepts the Purchase Order in writing or starts to perform in accordance with the Purchase Order. If Seller does not accept a Purchase Order in writing or provide written notice that it has commenced performance within ten (10) days of Seller’s receipt of the Purchase Order, such Purchase Order will lapse. Buyer may withdraw a Purchase Order at any time before it is accepted by Seller.
3. Quantity. If Seller does not deliver the exact quantity of goods set forth in a Purchase Order, Buyer may reject all or any Goods, including without limitation all or any excess Goods. Any such rejected Goods shall be returned to Seller at Seller’s risk and expense.
4. Delivery and Risk of Loss. Seller shall deliver Goods in the quantities and on the date(s) specified in a Purchase Order or as otherwise agreed in writing by the parties (the “Delivery Date”). Timely delivery of the Goods is of the essence. Seller shall immediately notify Buyer in writing of any actual or potential delay of delivery of the Goods. If Seller fails to deliver the Goods in full on the Delivery Date, Buyer may terminate a Purchase Order immediately by providing written notice to Seller and Seller shall indemnify Buyer against any losses, claims, damages, and reasonable costs and expenses attributable to Seller’s failure to deliver the Goods on the Delivery Date. Seller bears all risk of loss or damage to the Goods until delivery of the Goods to the location specified in the applicable Purchase Order.
5. Inspection and Rejection of Nonconforming Goods. Buyer, at its sole option, may inspect all or a sample of the Goods, and may reject all or any portion of the Goods if it determines the Goods are nonconforming or defective. If Buyer rejects any portion of the Goods, Buyer has the right, effective upon written notice to Seller, to: (a) rescind a Purchase Order in its entirety; (b) accept the Goods at a reasonably reduced price; or (c) reject the Goods and require replacement of the rejected Goods. If Buyer requires replacement of the Goods, Seller shall, at its expense, promptly replace the nonconforming Goods and pay for all related expenses, including, but not limited to, transportation charges for the return of the defective goods and the delivery of replacement Goods. If Seller fails to timely deliver replacement Goods, Buyer may replace them with Goods from a third party and charge Seller the cost thereof and terminate a Purchase Order for cause pursuant to Section 15.
6. Price. The price of the Goods shall be as set forth on the Purchase Order (the “Price”). Unless otherwise specified in the Purchase Order, the Price includes all packaging, transportation costs to the delivery location set forth in the applicable Purchase Order, insurance, customs duties, and fees and applicable taxes, including, but not limited to, all sales, use, or excise taxes.
7. Most Favored Customer. Seller represents and warrants that the price for the Goods is the lowest price charged by Seller to any of its external buyers for similar volumes of similar Goods. If Seller charges any other buyer a lower price, Seller hereby agrees to apply that price to all Goods under each Purchase Order. If Seller fails to meet the lower price, Buyer, at its option, may terminate any Purchase Order without liability pursuant to Section 15.
8. Setoff. Without prejudice to any other right or remedy it may have, Buyer reserves the right to set off at any time any amount owing to it by Seller against any amount payable by Buyer to Seller.
9. Warranties. Seller warrants to Buyer that all Goods will: (a) be free from any defects in workmanship, material, and design; (b) conform to applicable specifications, formulations, recipes, drawings, designs, samples, and other requirements specified by Buyer; (c) be fit for their intended purpose and operate as intended; (d) be merchantable; (e) be free and clear of all liens, security interests, or other encumbrances; and (f) not infringe or misappropriate any third party’s patent or other intellectual property rights.
10. General Indemnification. Seller shall defend, indemnify, and hold harmless Buyer and Buyer’s subsidiaries, affiliates, successors or assigns, and their respective directors, managers, officers, shareholders, members, partners, agents, attorneys, accountants, and employees and Buyer’s customers (individually, an “Indemnitee,” and collectively, “Indemnitees”) against any and all loss, injury, death, damage, liability, claim, deficiency, action, judgment, interest, award, penalty, fine, cost or expense, including, but not limited to, reasonable attorney and professional fees and costs, and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers (collectively, “Losses”) arising out of or occurring in connection with the products purchased from Seller or Seller’s negligence, willful misconduct, or breach of the Terms. Seller shall not enter into any settlement of third-party claims without Buyer’s or Indemnitee’s prior written consent.
11. Insurance. During the term of a Purchase Order and for a period of one (1) year thereafter, Seller shall, at its own expense, maintain and carry insurance, by insurers of recognized financial responsibility, in full force and effect, which is customary and commercially reasonable in the insurance industry for the business in which Seller is engaged.
12. Recalls. If any of the Goods are the subject of any recall or seizure by any governmental agency, or in the event any governmental agency requires that any of the Goods to be recalled or withdrawn from any level of the market, or in the event Buyer (in its sole and absolute discretion) deems that such a recall or withdrawal is necessary or advisable, Seller shall cooperate with Buyer in such action, including, without limitation, as directed by Buyer, (i) cooperating with governmental authorities, and (ii) developing a recall strategy and preparing, maintaining, and furnishing reports, records, and other information with respect to such recall or withdrawal process as directed by Buyer or any applicable governmental authority.
13. Books and Records. Seller shall prepare, maintain and retain complete and accurate books and records, including those required by any law (the “Production Records”). All Production Records shall be made available to Buyer and its representatives for inspection during regular business hours for a period of one (1) year after the term of a Purchase Order, upon seven (7) days’ notice.
14. Compliance with Law. Seller is in compliance with and shall comply with all applicable laws, regulations, and ordinances. Seller has and shall maintain in effect all the licenses, permissions, authorizations, consents, and permits that it needs to carry out its obligations under each Order.
15. Termination. Buyer may terminate a Purchase Order, in whole or in part, at any time with or without cause for undelivered Goods on ten (10) days’ prior written notice to Seller. In addition to any remedies that may be provided under these Terms, Buyer may terminate a Purchase Order with immediate effect upon written notice to the Seller, either before or after the acceptance of the Goods, if (i) Seller has not performed or complied with any of these Terms, in whole or in part; or (ii) Seller becomes insolvent, files a petition for bankruptcy or commences or has commenced against it proceedings relating to bankruptcy, receivership, reorganization, or assignment for the benefit of creditors. If Buyer terminates a Purchase Order for any reason, Seller’s sole and exclusive remedy is payment for the Goods received and accepted by Buyer prior to the termination.
16. Limitation of Liability. Nothing in any Purchase Order shall exclude or limit (a) Seller’s liability under Sections 9, 10, and 17 hereof, or (b) Seller’s liability for fraud, personal injury, or death caused by its negligence or willful misconduct.
17. Waiver. No waiver by any party of any of the provisions of a Purchase Order shall be effective unless explicitly set forth in writing and signed by the party so waiving. Except as otherwise set forth in a Purchase Order, no failure to exercise, or delay in exercising, any rights, remedy, power, or privilege arising from a Purchase Order shall operate or be construed as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
18. Confidential Information. Seller acknowledges and agrees that, from time to time, Seller may receive or otherwise become exposed to or familiar with Confidential Information disclosed by or on behalf of Buyer. “Confidential Information” means any and all information or data disclosed by or on behalf of Buyer in connection with a Purchase Order or any commercial relationship between Buyer and Seller that is confidential, proprietary or otherwise non-publicly available, whether or not marked or designated as “confidential” or “proprietary,” and irrespective of whether such information is furnished before, on or after the effective date of a Purchase Order or such commercial relationship. Seller and its representatives who have a need to know the Confidential Information may use Confidential Information solely for the purpose of fulfilling its obligations under a Purchase Order, will keep such Confidential Information strictly confidential and will protect such Confidential Information from use by or disclosure to any third party using the same degree of care used to protect its own Confidential Information, but in any case, using no less than a reasonable degree of care. Seller will be responsible for any breach of the confidentiality provisions of a Purchase Order by it or any of its representatives and agrees (at its sole cost and expense) to take all reasonable measures (including but not limited to court proceedings) to restrain its representatives from prohibited or unauthorized use or disclosure of Confidential Information disclosed to such representatives under any Order.
19. Force Majeure. If either party hereto is prevented from complying, either totally or in part, with any of the terms or provisions of a Purchase Order by reason of fire, flood, storm, riot, war, acts of terrorism, rebellion, or other acts of god, then upon written notice to the other party, the affected provisions and/or other requirements of a Purchase Order shall be suspended during the period of such disability. If the disability continues for more than thirty (30) days after the cessation of the reason for such disability, the non-disabled party shall have the right to terminate a Purchase Order and any future Orders immediately upon written notice, and neither party shall thereafter have any further rights or obligations under any Order, except as set forth in Section 26.
20. Amendment and Modification. No change to a Purchase Order is binding upon Buyer unless it is in writing, specifically states that it amends the Purchase Order and is signed by an authorized representative of Buyer.
21. Assignment. Seller shall not assign, transfer, delegate, or subcontract any of its rights or obligations under a Purchase Order without the prior written consent of Buyer, which may be withheld in Buyer’s sole and absolute discretion. Any purported assignment or delegation in violation of this Section 21 shall be null and void. No assignment or delegation shall relieve the Seller of any of its obligations hereunder. Buyer may at any time assign, transfer, or subcontract any or all of its rights or obligations under a Purchase Order without Seller’s prior written consent.
22. Relationship of the Parties. The relationship between the parties is that of independent contractors. Nothing contained in any Purchase Order shall be construed as creating any agency, partnership, joint venture, or other form of joint enterprise, employment, or fiduciary relationship between the parties, and neither party shall have authority to contract for or bind the other party in any manner whatsoever. No relationship of exclusivity shall be construed from any Purchase Order.
23. Governing Law and Jurisdiction. Each Purchase Order shall be governed and construed by the substantive federal and state law of the state of California. Buyer hereby agrees that any claim or cause of action arising out of any Purchase Order shall be brought in a state or federal court in Los Angeles County, California.
24. Notices. All notices, requests, consents, claims, demands, waivers, and other communications hereunder (each, a “Notice”) shall be in writing and addressed to the parties at the addresses set forth on the face of a Purchase Order or to such other address that may be designated by the receiving party in writing. All Notices shall be delivered by personal delivery, nationally recognized overnight courier (with all fees pre-paid), facsimile (with confirmation of transmission), or certified or registered mail (in each case, return receipt requested, postage prepaid). Except as otherwise provided in a Purchase Order, a Notice is effective only (a) upon receipt by the receiving party, and (b) if the party giving the Notice has complied with the requirements of this Section 24.
25. Severability. If any term or provision of a Purchase Order or these Terms is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of a Purchase Order or these Terms or invalidate or render unenforceable such term or provision in any other jurisdiction.
26. Survival. Provisions of a Purchase Order or these Terms which by their nature should survive beyond the expiration or earlier termination of the Purchase Order will remain in force after such expiration or earlier including, but not limited to, the following provisions: Setoff, Warranties, General Indemnification, Intellectual Property Indemnification, Insurance, Compliance with Law, Confidential Information, Governing Law, Submission to Jurisdiction/Arbitration and Survival. With respect to confidential information that constitutes a trade secret under applicable law, the rights and obligations set forth in Section 17 hereof shall survive the expiration or earlier termination of a Purchase Order until, if ever, such confidential information loses its trade secret protection other than due to an act or omission of Seller.
Califia Farms Supplier Code of Conduct
2024 UPDATE
INTRODUCTION
Califia Farms is committed to maintaining high standards of social and environmental responsibility and ethical conduct within our business operations worldwide, and we aim to partner with suppliers who share our values. To that end, this Supplier Code of Conduct sets out minimum standards of conduct that we expect our suppliers to meet. This Supplier Code of Conduct is based on the Ethical Trade Initiative Base Code, UN Guiding Principles on Business and Human Rights, and the International Labour Organisation (ILO) Declaration on Fundamental Rights and Principles at Work. This Code of Conduct applies to our own manufacturing sites, as well as our direct suppliers, who, certify that they and all entities in their supply chain meet the requirements below.
The provisions of this Code constitute minimum and not maximum standards, and this Code should not be used to prevent companies from exceeding these standards. Companies applying this Code are expected to comply with national and other laws applicable in the country(ies) in which they do business and, where the provisions of law and this Code address the same subject, to apply that provision which affords the greater protection.
REQUIREMENTS
Employment is Freely Chosen
1.1 Supplier does not use forced, bonded or involuntary labor of any kind, including involuntary prison labor.
1.2 Supplier does not require employees to lodge “deposits” or their identity papers with their employer and are free to leave their employer after reasonable notice.
1.3 Supplier’s employment agreements comply with local laws and regulations, inform workers of their legal rights and employment conditions in a language understood by the worker, and are completed before work has commenced
1.4 Supplier ensures employees are made aware of their rights and responsibilities at the time of hire.
Freedom of Association and the Right to Collective Bargaining are Respected
2.1 Workers, without distinction, have the right to join or form trade unions of their own choosing and to bargain collectively.
2.2 The employer adopts an open attitude towards the activities of trade unions and their organizational activities.
2.3 Workers representatives are not discriminated against and have access to carry out their representative functions in the workplace.
2.4 Where the right to freedom of association and collective bargaining is restricted under law, the employer facilitates, and does not hinder, the development of parallel means for independent and free association and bargaining.
Working Conditions are Safe and Hygienic
3.1 A safe and hygienic working environment shall be provided, bearing in mind the prevailing knowledge of the industry and of any specific hazards. Adequate steps shall be taken to prevent accidents and injury to health arising out of, associated with, or occurring in the course of work, by minimizing, so far as is reasonably practicable, the causes of hazards inherent in the working environment.
3.2 Supplier shall provide workers regular and recorded health and safety training, and such training shall be repeated for new or reassigned workers. Training shall be provided in a manner understood by the employee.
3.3 Access to clean toilet facilities and to potable water, and, if appropriate, sanitary facilities for food storage shall be provided.
3.4 Accommodation, where provided, shall be clean, safe, and meet the basic needs of the workers.
3.5 The company observing the code shall assign responsibility for health and safety to a senior management representative.
3.6 Suppliers shall identify and reduce the use of hazardous materials, chemicals, and substances. Suppliers will also ensure their safe handling, storage, and disposal.
3.7 Potential emergencies are to be identified and assessed, and their impact minimized by implementing emergency plans and response procedures. Emergency exits shall be unlocked and unblocked at all times.
Child Labor Shall Not be Used
4.1 There shall be no new recruitment of child labor*.
4.2 Companies shall develop or participate in and contribute to policies and programs which provide for the transition of any child found to be performing child labor to enable her or him to attend and remain in quality education until no longer a child; “child” and “child labor” being defined in the appendices.
4.3 Children and young persons under 18 shall not be employed at night or in hazardous conditions.
4.4 These policies and procedures shall conform to the provisions of the relevant ILO standards.
* Per the ILO, children are classified as people under the age of 15, under the legal age for completion of compulsory education, or under the legal minimum age for employment according to national law, whichever is higher. A child may help at their family’s business only if they perform light work and meet the requirements above.
Living Wages are Paid
5.1 Wages and benefits paid for a standard working week meet, at a minimum, national legal standards or industry benchmark standards, whichever is higher. In any event wages should always be enough to meet basic needs and to provide some discretionary income.
5.2 All workers shall be provided with written and understandable information about their employment conditions in respect to wages before they enter employment and about the particulars of their wages for the pay period concerned each time that they are paid.
5.3 Deductions from wages as a disciplinary measure are not permitted nor shall any deductions from wages not provided for by national law be permitted without the expressed permission of the worker concerned. All disciplinary measures should be recorded.
5.4 Workers should be charged fair prices, where applicable, for job uniforms, protective gear, food, toiletries and other essential items and transportation. The collective cost of living expenses and transportation costs shall not exceed the amount paid for the duration/term length of employment.
Working Hours are Not Excessive
6.1 Working hours must comply with national laws, collective agreements, and the provisions of 6.2 to 6.6 below, whichever affords the greater protection for workers. Sub-clauses 6.2 to 6.6 are based on international labor standards.
6.2 Working hours, excluding overtime, shall be defined by contract, and shall not exceed 48 hours per week.*
6.3 All overtime shall be voluntary. Overtime shall be used responsibly, taking into account all the following: the extent, frequency and hours worked by individual workers and the workforce as a whole. It shall not be used to replace regular employment. Overtime shall always be compensated at a premium rate, which is recommended to be not less than 125% of the regular rate of pay.
6.4 The total hours worked in any seven-day period shall not exceed 60 hours, except where covered by clause 6.5 below.
6.5 Working hours may exceed 60 hours in any seven day period only in exceptional circumstances where all of the following are met: • this is allowed by national law; • this is allowed by a collective agreement freely negotiated with a workers’ organization representing a significant portion of the workforce; • appropriate safeguards are taken to protect the workers’ health and safety; and • the employer can demonstrate that exceptional circumstances apply such as unexpected production peaks, accidents or emergencies.
6.6 Workers shall be provided with at least one day off in every seven-day period or, where allowed by national law, two days off in every 14 day period.
* International standards recommend the progressive reduction of normal hours of work, when appropriate, to 40 hours per week, without any reduction in workers’ wages as hours are reduced.
No Discrimination is Practiced
7.1 There is no discrimination in hiring, compensation, access to training, promotion, termination or retirement based on race, caste, national origin, religion, age, disability, gender, marital status, sexual orientation, union membership, pregnancy status or political affiliation.
Regular Employment is Provided
8.1 To every extent possible work performed must be on the basis of recognized employment relationship established through national law and practice.
8.2 Obligations to employees under labor or social security laws and regulations arising from the regular employment relationship shall not be avoided through the use of labor-only contracting, sub- contracting, or homeworking arrangements, or through apprenticeship schemes where there is no real intent to impart skills or provide regular employment, nor shall any such obligations be avoided through the excessive use of fixed-term contracts of employment.
No Harsh or Inhumane Treatment is Allowed
9.1 Physical abuse or discipline, the threat of physical abuse, sexual or other harassment and verbal abuse or other forms of intimidation shall be prohibited.