The following standard terms and conditions are applicable to all purchase orders and purchase supply agreements covering any and all material and service purchases by CN Rail or any of its U.S. Subsidiaries (Illinois Central Railroad, Grand Truck Western Railroad, Duluth, Winnipeg & Pacific Railway, Chicago Central & Pacific Railroad, Cedar River Railroad) for requirements consigned to U.S. destinations. These railroads are those that will be referred to on the face of all purchase orders as “The Railway”. These terms and conditions replace those previously included on the backside of the various purchase order/ agreement forms. These terms and conditions will be updated periodically by CN Supply Management. Each revision will be identified by the next revision number and effective date. Any subsequent revisions will be effective only to purchase orders issued on or after the date of the revision to the standard terms and conditions. For further information contact CN Supply Management Headquarters – Montreal, Quebec.

STANDARD TERMS AND CONDITIONS COVERING PURCHASES WITH U.S. ENTITIES


1. APPLICABILITY

Any reference to the Railroad in the following text refers to Canadian National Railways and all of it’s subsidiaries namely Canadian National Railways, Grand Trunk Western Railroad, Duluth, Winnipeg & Pacific Railway, Illinois Central Railroad, Chicago Central & Pacific Railroad, or Cedar River Railroad.

2. CONTRACT

Acceptance of a purchase order is limited to the terms on the face and back thereof and the documents, drawings and specifications referred to therein or attached thereto. Any proposal for additional or different terms in Seller’s acceptance are objected to and rejected and shall be deemed a material alteration thereof and the offer shall be deemed accepted by Seller without said additional or different terms. The purchase order, together with all documents, drawings and specifications referred to therein or attached thereto shall become a contract (the “Contract”) upon Railroad’s receipt of Seller’s acceptance, Seller’s commencement of work on the goods subject to the purchase order, or shipment of such goods.

3. PRICE

Unless otherwise agreed in writing prices are in U.S. dollars, are firm and are inclusive of all applicable taxes, duties, (shipping, packaging, labeling, storage, insurance, boxing or crating charges) of any kind. Seller warrants that the prices quoted are the lowest prices at which these or similar articles are sold by Seller to other customers, and in the event of any price reduction between issuance of the purchase order and delivery of the goods, Railroad shall be entitled to such reduction.

4. INVOICES

Unless otherwise agreed in writing, Seller must provide a separate invoice in duplicate for each shipment made under the Contract. Invoices under the Contract will not relate to goods or services under any other Contract, Railroad’s purchase order number must appear on all invoices and other relevant documentation (packing slips, bills of lading etc.).

5. PAYMENT

The time specified for the payment of invoices of for accepting Seller’s payment discounts shall commence from the receipt by Railroad of a complete and correct invoice. Regardless of any provision in an invoice to the contrary, no interest will be paid by Railroad on overdue accounts.

6. ROUTING

Carload shipments to be loaded in system cars when obtainable. All shipments must be routed so as to give the Grand Trunk Western Railroad, Canadian National Railways, Duluth, Winnipeg & Pacific Railway, Illinois Central Railroad, Chicago Central & Pacific Railroad, or Cedar River Railroad the longest possible haul.

A. All truckload and less than truckload shipments must be routed as indicated on the face of this order. If there are no routing instructions indicated, shipment is to be forwarded via Parcel Post, Parcel Delivery Service or Motor Carrier, whichever is more economical.
B. All carload shipments must be routed as indicated on the face of this order. If there are no routing instructions indicated, ship via the nearest CN/IC interchange point.
C. CN or IC cars must be used on all carload shipments. Contact the Car Management Department at (708) 206-6727 if you need assistance in obtaining such cars.

7. DELIVERY; TRANSPORTATION CHARGES; PACKING SLIPS

Unless specifically stated on the face of the order.

A. All shipments are to be forwarded “freight collect”.
B. Any freight allowance, addition, or equalization must be based on the lowest published rate, and must show the tariff authority for such rate.

8. CUSTOMS DOCUMENTS

Seller shall comply with customs documentation requirements set out on the front hereof.

9. INSPECTION ACCEPTANCE

Payment for the goods delivered shall not constitute acceptance. Railroad shall have the right to inspect and test, anywhere and at any time, any item covered by the Contract. Notwithstanding any such inspection or test, should any item covered by the Contract be found not to be in accordance with the Contract. Railroad shall have the right to cancel the contract in whole or in part and to reject and return the goods. Seller shall pay all expenses of unpacking, examining, repacking and shipping rejected goods. However, Railroad may use such portion of the goods as may serve it’s purpose and such use shall not be deemed an acceptance of the remainder of the goods, nor prejudice Railroad’s right to reject the remainder of the goods and to recover back from Seller any amounts already paid for such shipment. All goods shall be subject to final inspection by Railroad prior to use thereof.

10. CHANGES; CANCELLATION

Railroad reserves the right either to change or cancel, for it’s conveniance the Contract in whole or in part at any time upon written notice to Seller.

11. COMPLIANCE

In supplying the goods or services, Seller shall comply with, and comply with and obtain applicable permits under:

A. All applicable laws, regulations, ordinances, orders, codes and standards (including health and safety) of any federal, state, or municipal authority having jurisdiction; and
B. all Railroad policies standards rules and regulations (safety and operational), Seller shall assure such compliance by its agents and subcontractors and their respective employees and agents.

12. SAFETY, HEALTH INFORMATION

Seller shall supply in printed form all relevant product safety and health information that pertains to all goods (including equipment) ordered hereunder. Seller will ensure that goods (including equipment) comply with certification standards.

13. WARRANTY

Seller warrants that:

A. Seller has the right to sell and/or provide the goods or services ordered;
B. The goods or services are in strict conformity with the specifications, drawings, design or other descriptions provided by Railroad and are fit for the particular purpose intended;
C. The goods or services are free of defects (whether patent or latent) including defects of title, design, workmanship and material; and
D. The goods or services are free and clear of all liens, privileges, encumbrances and claims of any kind.

All warranties shall be continuing and shall survive and not be diminished by inspection acceptance use or payment of or for the goods or services. Any goods or services that do not comply with this warranty shall, at Railroad’s option either be replaced or repaired by Seller or returned by Railroad for refund by Seller. This warranty is in addition to other express or implied warranties given to Railroad by Seller or its agents.

14. INDEMNITY

Seller shall indemnify, defend, hold harmless and release Railroad, its employees, officers, directors and agents from and against any and all loss, liability (including any environmental liability), demand, claim, damage, injury (including direct, indirect, incidental, or consequential damage) or loss of profits or expense (including reasonable attorneys’ fees or other legal expenses) sustained by reason of arising out of or relating to, without limitation:

A. Any breach or non-fulfillment of any of Seller’s warranties or obligations hereunder;
B. any act, omission, neglect or default by Seller, its officers, employees or agents (including Seller’s contractors, their employees and agents);
C. any claim or infringment of any patent, trade-mark, trade secret or other proprietary right including claims for royalties or license fees, in connection with the purchase, use or sale of the goods (whether or not the goods ordered, their parts or designs have been specified by Railroad) or services; and
D. the death or any bodily injury to anyone, damage to property, or any other damage or loss by whomsoever suffered, resulting or claimed to result in whole or in part from the manufacture, use, purchase, or sale of the goods or performance of services provided.

Railroad may at its option be represented by its own counsel in any action, the expenses of which shall be borne by Seller. All indemnifications and hold-harmless agreements and releases shall be continuing and shall survive acceptance of the goods or services provided hereunder, or cancellation of the Contract.

15. OWNERSHIP OF DRAWINGS DESIGNS ETC.

Railroad shall own any documents including specifications, drawings, or designs supplied by Railroad, or produced by Seller for Railroad with respect to the goods to the goods or services covered by the Contract.

16. PUBLICITY: CONFIDENTIALITY

Seller shall consider all information furnished by Railroad to be confidential and shall not disclose any such information to any other person, or use such information itself for any purpose other than performing this contract, unless Seller obtains written permission from Railroad to do so. This paragraph shall apply to drawings, specifications, or other documents prepared by Seller for Railroad in connection with this order. Seller shall not advertise or publish the fact that Railroad has contracted to purchase goods from Seller, nor shall any information relating to the order be disclosed without Railroad’s permission.

17. ASSIGNMENT

The Contract shall not be assigned in whole or in part by Seller nor shall Seller subcontract any part of this Contract without the prior written consent of Railroad.

18. WAIVER

A waiver by Railroad of any provision hereof must be in writing and shall not operate as a waiver of any other provision or breach.

19. PRECEDENCE

In the event of any inconsistency between:

A. These items and conditions and those set out on the front of the Contract, the latter shall prevail; and
B. This Contract and the Seller’s quotation, the Contract shall prevail.

20. SEVERABILITY

Any provision of the Contract which is unenforceable or void, shall be severable without invalidating or otherwise affecting the remaining provisions hereof.

21. MICROFILM; ELECTRONIC STORAGE

Seller agrees that the copy of any document relating to the Contract shall have the same value as the original if it is certified by an officer of Railroad to have been reproduced from Railroad’s microfilm or electronic storage.

22. GOVERNING LAW

The Contract shall be governed by the laws of the State of Illinois.

23. INSURANCE

In the event that Seller’s obligations hereunder require or contemplate performance of services by Seller’s employees, or persons under contract to Seller, to be done on Railroad’s property, or property of Railroad’s customers, the Seller agrees that all such work shall be done as an independent contractor and that the persons doing such work shall not be considered employees of the Railroad. Seller shall maintain all necessary insurance coverages, including public liability and Worker’s Compensation insurance. Seller shall name Railroad as an additional insured on all liability policies and shall indemnify and save harmless and defend Railroad from any and all claims or liabilities arising out of the work covered by this Contract.

24. SET-OFF

All claims for money due or to become due from Railroad shall be subject to deduction or setoff by the Railroad by reason of any counterclaim arising out of this or any other transaction with Seller.

25. DELIVERY

Time is of the essence of the Contract, and if delivery of items or rendering of services is not completed by the time promised, Railroad reserves the right, without liability and in addition to its other rights and remedies, to terminate the Contract by notice effective when received by Seller as to items not yet shipped or services not yet rendered and to purchase substitute items or services elsewhere and charge Seller with any loss incurred.

26. LIMITATION ON RAILROAD’S LIABILITY – STATUTE OF LIMITATIONS

In no event shall Railroad be liable for anticipated profits or for incidental or consequential damages. Railroad’s liability on any claim of any kind for any loss or damage arising out of or in connection with or resulting from the agreement or from the performance or breach thereof shall in no case exceed the price allocable to the goods or services or unit thereof, which gives rise to the claim. Railroad shall not be liable for penalties of any description. Any action resulting from any breach on the part of Railroad as to the goods or services delivered hereunder must be commenced within one year after the cause of action has accrued.