H & M HENNES & MAURITZ AB

Standard Purchase Conditions (SPC)

Table of contents
1

DEFINITIONS ............................................................................................................. 2

CONTRACT DOCUMENTS AND GENERAL UNDERTAKINGS ........................................... 2

BASIS OF PURCHASE................................................................................................... 3

THE ORDER ................................................................................................................ 4

SPECIFICATIONS ......................................................................................................... 4

PRICE......................................................................................................................... 6

TERMS OF PAYMENT................................................................................................... 6

DELIVERY................................................................................................................... 6

RISK AND PROPERTY ................................................................................................. 7

10 INTELLECTUAL PROPERTY.......................................................................................... 8
11 WARRANTIES AND LIABILITY .................................................................................... 8
12 TERMINATION.......................................................................................................... 10
13 PENALTIES ............................................................................................................... 11
14 MISCELLANEOUS...................................................................................................... 11
15 GOVERNING LAW AND DISPUTES ............................................................................ 12

Specific acknowledgements

All documents listed or referred to in 2.1 of the SPC constitute an

integral part of the SPC. Of these documents, the following two
documents are of particular importance to H&Ms business and its
relationship with its suppliers.
H&M Code of Conduct
H&M Code of Ethics

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Although these Codes are part of the SPC terms and thereby accepted by
the Suppliers, H&M requires the Suppliers to sign these two appendices
also separately in order to emphasize their importance and acknowledge
their strict application at all times.

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1(13)

1 Definitions
In these Conditions:
BUYER means H&M Hennes & Mauritz GBC AB, registered in Sweden, corporate organisation
number 556070-1715, a wholly owned subsidiary of H&M Hennes & Mauritz AB (publ.), (H&M),
OR any other company, wholly or partly owned, directly or indirectly, by H&M OR Hennes &
Mauritz (Shanghai) Commercial Co. Ltd., wholly owned by H&M. H&M is registered in Sweden,
corporate organisation number 556042-7220.
CONDITIONS mean the standard terms and conditions of purchase, the H & M Standard
Purchase Conditions, set out in this document and include any special terms and conditions
agreed in Writing between the Buyer and the Supplier as well as the documents listed and
referred to in Art. 2.1-2.2 of this document
COUNTER SAMPLE means a representative sample of the Goods ordered, to be submitted to the
Buyer for approval before start of production
DELIVERY ADDRESS means the address stated on the Order
GOODS mean the goods (including all components, e.g. zippers and material, and any instalment of
the goods or any part of them) described in the Order
ORDER means the sale and purchase contract between the Supplier and the Buyer to which the
Conditions are incorporated by reference
PRICE means the price of the Goods
PRODUCTION OFFICE (PO) means a company or liaison office, wholly or partly owned,
directly or indirectly, by H&M, which, without being a contracting party, assists the Buyer in its
dealings with the Supplier and which may approve Counter Samples on behalf of the Buyer.
SUPPLIER means the person or entity so described in the Order
SPECIFICATION includes any plans, drawings, data or other information relating to the Goods
WRITING includes facsimile, e-mail and comparable means of communication

2
2.1

Contract Documents and General Undertakings

The H & M Standard Purchase Conditions incorporate the following documents which constitute
the standard terms and conditions, as applicable from time to time, used by the Buyer for the
purchase of goods to be sold by the Buyer, by other H&M company, or by a franchisee of H&M
(Franchisee) to the public in a country where the Buyer, other company within the H&M group
of companies or a Franchisee is trading or intends to commence trading. All these documents,
including these Conditions, have been made available to the Supplier and the Supplier
acknowledges that he has read the documents relevant to the Order, understood their contents

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and undertakes to act in accordance therewith:

(i)

H & M Code of Conduct;

(ii)

H & M Code of Ethics;

(iii)

H & M Chemical Restrictions;

(iv)

H & M Safety Requirements for Babies and Childrens Wear; and

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(v)
2.2

H & M Guidelines for Production and Quality control

The list of documents in Art 2.1 is not exhaustive. The latest versions of the documents listed in
Art. 2.1, as well as the latest versions of any other documents applicable to the purchase of goods
in accordance with these Conditions, are available at the H&M group supplier portal after Supplier
log-in. The Supplier is responsible for keeping himself informed of and adhering to the provisions of
such documents, as applicable.

2.3

H&M will provide each Supplier with a personal ID and password to the H&M group supplier portal.
The ID and password shall be kept strictly confidential by Supplier and Supplier is responsible for
any use of the H&M group supplier portal under Suppliers ID and password. Supplier is
recommended to log out and close the browser after every use of the H&M group supplier portal.
H&M and companies in the H&M company group will never ask for Supplier ID or password in
phone calls or emails.

2.4

H&M and companies in the H&M company group will make reasonable endeavours to protect and
keep confidential business information provided by Supplier.

2.5

Personal data included in the business information provided by Supplier will be used by H&M and
companies in the H&M company group only in the business relationship but the data may be
transferred to H&M group entities and stored in different parts of the world. It is the obligation of
Supplier to secure that individuals, whose personal data is provided, have agreed to the use, data
processing and possible transfer of such personal data.

2.6

The Supplier shall have a functioning Internet connection and shall be able to receive e-mails 24
hours a day 7 days a week. The Supplier shall check his e-mail account(s) and log on to the H&M
group supplier portal on a daily basis.

2.7

Production Offices will, for the purposes of these Conditions, assist the Buyer in its local dealings,
e.g. by issuing Orders, by inspecting and testing the Goods prior to dispatch, etc., as decided by
the Buyer from time to time.

2.8

Nothing in these Conditions shall create or be interpreted to create a partnership, an employment

relationship, an agency or similar between the Buyer and the Supplier. Neither party shall have
the authority to act on behalf of the other party in any matter whatsoever. Neither party will be
liable or responsible for any acts or defaults of the other party or its employees or agents.

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3.1

Basis of purchase
The Order constitutes an offer by the Buyer to purchase the Goods subject to the Conditions.

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3.2

The Conditions shall apply to the Order to the exclusion of any other terms and conditions on
which any quotation has been given to the Buyer or subject to which the Order is accepted or
purported to be accepted by the Supplier.

3.3

No variation to the Order or these Conditions shall be binding unless agreed in Writing between
the authorised representatives of the Buyer and the Supplier.

The Order

4.1

The complete Order number must be stated in all correspondence.

4.2

The Order is personal to the Supplier and the Supplier shall not assign or transfer or purport to
assign or transfer to any other person any of its rights or sub-contract any of its obligations
under the Order absent the Buyers consent in Writing. The Supplier is responsible towards the
Buyer for any acts and omissions of its sub-contractors as for its own acts and omissions.

4.3

In case of any deviation from or change to the Order, the Supplier must immediately notify the
Buyer and obtain written approval to such deviation or change.

4.4

The Supplier is responsible, at its own cost, for obtaining sufficient quotas, export permits, export
licenses and any other permits or documents necessary for the delivery of the Goods to the
Buyer.

4.5

The Order is not effective unless and until:

4.5.1

all relevant documents (including compliance commitment forms), duly signed by

the Supplier, have been sent to and received by the Buyer;

4.5.2

Counter Samples have been provided by the Supplier and accepted by or on behalf
of the Buyer; and

4.5.3

waived by the Buyer, all appropriate and necessary licenses and permits have
been granted.

5
5.1

Specifications
The quantity, quality and description of the Goods shall, subject to as provided in these
Conditions, be specified in the Order and/or in any applicable Specification supplied by the Buyer
to the Supplier or agreed in Writing by the Buyer.

5.2

Any Specification supplied by the Buyer to the Supplier, or specifically produced by the Supplier
for the Buyer shall be the exclusive property of the Buyer. The Supplier shall not disclose to any

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third party, or use, any such Specification except to the extent that it is or becomes public
knowledge through no fault of the Supplier, or as required for the purpose of an Order. Printing
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plates and other material used in design, developing and manufacturing of the Goods may only
be used by the Supplier for the purpose of the Order or as specifically approved in writing by the
Buyer. If so required by the Buyer, the Supplier shall destroy, and confirm such destruction in
writing to the Buyer, printing plates or other material used in the design, developing or the
manufacturing of the Goods.
5.3

In case the Supplier has provided the Buyer with designs or specifications and the Buyer has
ordered Goods based on such designs or specifications, the Supplier shall give the Buyer a nonexclusive, perpetual right to use, modify and manufacture or have manufactured by a third party,
additional goods based on such designs or specifications.

5.4

The Supplier shall comply with all applicable laws and regulations and other requirements
concerning the manufacture, packaging, packing, marking, delivery, import, export, etc. of
the Goods.

5.5

Price tags shall be paid for by the Supplier and the Supplier is responsible, at its own cost, for
ordering price tags in accordance with the Buyers instructions and the information available at
the H&M group supplier portal. The Supplier shall order the price tags well in time to meet the
delivery date stated in the Order.

5.6

The Buyer has the right to inspect and test the Goods during manufacture, processing or storage
at the premises of the Supplier or of any third party prior to dispatch. The Buyer has the right to
appoint a third party to carry out the tests on the Goods on the Buyers behalf. The Supplier shall
provide the Buyer and such third party with all facilities reasonably required for inspection and
testing. The Supplier shall bear the costs of tests performed on the Goods by a third party.

5.7

If as a result of inspection or testing the Buyer is not satisfied that the Goods will comply in all
respects with the Order, the Buyer shall inform the Supplier thereof without delay and latest
within fifteen (15) days of inspection or testing, and the Supplier shall take such steps as
necessary to ensure compliance to Buyers satisfaction within the time stipulated by the
Buyer, which time shall be reasonable considering the circumstances.

5.8

Tests will be carried out on Counter Samples and otherwise at random. The acceptance or
approval by the Buyer of a Counter Sample or the result of random tests performed by the Buyer
on other sample of the Goods or the manufacturing process or otherwise prior to delivery shall
not limit or affect the liability of the Supplier for the Goods being in accordance with the
Specification and other terms of the Order.

5.9

The Goods shall be marked in accordance with the Buyers instructions and any applicable
regulations and requirements of the carrier, and properly packeged, packed and secured so as to

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reach their destination in an undamaged condition.

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6.1

Price
The Price shall be as stated in the Order and shall, unless otherwise so stated, be exclusive of
any applicable value added tax (which shall be payable by the Buyer subject to receipt of a VAT
invoice).

6.2

The Buyer will pay for transport insurance after the risk of the Goods has passed to the Buyer as
stated below in Art. 9.

6.3

No increase in the Price may be made (whether on account of increased material, labour or
transport costs, fluctuation in rates of exchange or otherwise) without the prior consent of the
Buyer in Writing.

7
7.1

Terms of payment
The Supplier shall be entitled to invoice the Buyer on or at any time of delivery of the Goods and
each invoice shall quote the number of the Order as set forth in Art. 4.1 above.

7.2

The Goods must be invoiced in the currency stated on the Order.

7.3

Unless otherwise stated in the Order, the Buyer shall pay the Price within thirty (30) days after
the end of the month of receipt by the Buyer of a proper invoice or, if later, after acceptance of
the Goods by the Buyer. If payment is made within twenty (20) days of receipt of the invoice,
Buyer shall be entitled to a discount of two (2) percent of the invoiced amount and shall be
entitled to make such reduction of the Price

7.4

The Buyer shall be entitled to set off against the Price any sums owed to the Buyer by the
Supplier.

7.5

The Buyer shall pay the Price to the Supplier unless the Buyer has notice from the Supplier in
Writing that the Suppliers claim on the Buyer has been assigned to another, clearly identified,
entity or person. The Buyers rights under these Conditions shall not be affected by an
assignment and it is the obligation of the Supplier to see to it that all such rights can be
enforced by the Buyer against the assignee.

8
8.1

Delivery
The Goods shall be delivered to the Delivery Address on the date or within the period stated in

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the Order, in either case during the Buyers usual business hours.

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8.2

Where the date of delivery of the Goods is to be specified after the placing of the Order, the
Supplier shall give the Buyer reasonable notice of the specified date.

8.3

The timely delivery of the Goods is of the essence to the Order.

8.4

Part deliveries or deliveries at any other time than originally agreed upon must be pre-approved
in Writing by the Buyer. Absent such approval, the Buyer has a right to cancel the Order (in
whole or in part) and to refuse taking delivery of the Goods.

8.5

A packing note quoting the number of the Order must accompany each delivery or consignment
of the Goods and must be displayed prominently.

8.6

The Buyer shall be entitled to reject any Goods delivered, which are not in accordance with the
Order, and shall not be deemed to have accepted any Goods until the Buyer has had a
reasonable time to inspect them following delivery or, if later, within a reasonable time after any
defect in the Goods has become apparent to the Buyer.

8.7

Rejected Goods is the responsibility of the Supplier and the Supplier shall, as soon as possible and
at its own cost, after receiving notice of the Buyers decision to reject the Goods, resume
possession of the Goods. If the Supplier has not resumed possession of the Goods within fifteen
(15) days of such notice from the Buyer, the Buyer shall be entitled to, without any liability to the
Supplier, in its own discretion, either destroy the Goods or donate the Goods to charitable
organisations, in which case the donation will be made in the name of the Supplier.

8.8

The Supplier is only entitled to sell rejected Goods to other entities or persons in accordance with
Art. 12.4 12.5. Where Buyer is restricted from disposing over rejected Goods, e.g. due to
licensed rights from third party, or where the necessary handling of the Goods may, in the
reasonable opinion of the Buyer, be hazardous due to e.g. mould or chemicals, the Buyer is
entitled to destroy the rejected Goods without any liability towards the Supplier.

8.9

The Supplier shall provide the Buyer in good time with any instructions or other information
required to enable the Buyer to accept delivery of the Goods.

8.10

The Buyer shall not be obliged to return to the Supplier any packaging or packing materials for
the Goods, whether or not any Goods are accepted by the Buyer.

8.11

If the Goods are not delivered on the due date then, without prejudice to any other remedy, the
Buyer shall be entitled to a reasonable reduction of the Price. Anticipated delay must be reported

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by the Supplier to the Buyer without delay.

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Risk and Property

The risk of damage to or loss of the Goods shall pass to the Buyer upon delivery to the Buyer in
accordance with the Order.

10
10.1

Intellectual Property
Any and all intellectual property rights pertaining to designs, specifications, moulds, printing
plates, artwork films, silk screens or any and all material used in the development or production
of a product (Production Materials) supplied by the Buyer or developed by the Supplier for the
Buyer in connection with the Order, shall be the property of the Buyer or the Licensor of the
Buyer.

10.2

The Supplier has no right to use any such Goods or Production Material or intellectual property
right except for the due fulfilling of the Order or as specifically approved or instructed in writing
by the Buyer. Buyer or Licensor of Buyer or of H&M, shall have the right, upon request in Writing,
to (i) receive all Production Material from the Supplier or its sub-supplier or (ii) receive
satisfactory evidence of destruction of Production Material.

10.3

Buyer, Licensor of Buyer or of H&M shall have the right to visit and inspect, at any time, any
factory using intellectual property rights of Buyer or a licensor to Buyer or to H&M or Production
Material. A licensor shall also have the right to audit the accounts of Supplier regarding
products subject to licensed rights.

10.4

The Supplier shall not be entitled to mark the Goods with its name or brand, unless approved to
in writing by the Buyer.

10.5

The Supplier agrees that it shall not obtain any right, right of use, title or interest in the company
name or the trademarks of the Buyer or of any H&M company other than as stated in these
Conditions or in an Order. The Supplier shall have no right to use the company name or the
trademarks of the Buyer or of any H&M company in its marketing or to refer to its agreement
with Buyer or to the trademarks of Buyer or other company in the H&M group or otherwise to
give reference to any H&M company or trademark.

11
11.1

Warranties and Liability

The Supplier warrants to the Buyer that the Goods:
11.1.1

will be of merchantable quality and fit for any purpose held out by the Supplier or

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made known to the Supplier in Writing at the time the Order is placed;
11.1.2

will be free from defects in design, material and workmanship;

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11.1.3

will correspond with any relevant Specification or sample;

11.1.4

will comply with all statutory requirements and regulations relating to the sale of
the Goods in the countries where the Goods are intended to be marketed and sold;

11.1.5

will be adequately packed for dispatch and that no third person has had any
possibility to tamper with the Goods as packed or to add anything to the
packaging;

11.1.6

do not contain chemicals that are classified as health hazardous or are forbidden by
law in any of the countries where the Goods are intended to be marketed and sold;
and

11.1.7

do not infringe upon the patent, copyright, design right, trademark or other
intellectual property right of any other person.

11.2

Without prejudice to any other remedy, if any Goods supplied are not in accordance with the
Order or the warranties given by the Supplier, then the Buyer shall be entitled:
11.2.1

to require the Supplier to supply replacement Goods in accordance with the Order
within seven (7) days of the intended date of delivery; and/or

11.2.2

to a Price deduction; and/or

11.2.3

at the Buyers sole option, and whether or not the Buyer has previously required the
Supplier to supply any replacement Goods, to terminate the Order in whole or in
part.

11.3

The Supplier shall indemnify the Buyer in full against all liability, loss, damages, costs and
expenses (including legal expenses) awarded against or incurred or paid by the Buyer as a result
of or in connection with:
11.3.1

breach of any warranty given by the Supplier in relation to the Goods;

11.3.2

any claim that the Goods infringe, or their importation, use or resale, infringes, the
patent, copyright, design right, trademark or other intellectual property rights of
any other person, except to the extent that the claim arises from compliance with
any Specification supplied by the Buyer;

11.3.3

any product liability in respect of the Goods under legislation in any

country; and

11.3.4

any act or omission by the Supplier or its employees, agents or sub-contractors in

supplying the Goods to the Buyer.

11.4

Neither the Supplier nor the Buyer shall be liable to the other or deemed to be in breach of the
Order by reason of any delay in performing, or failing to perform, any of its obligations in relation
to the Goods, if the delay or failure was beyond that partys reasonable control and could not
have been foreseen by such party. Without prejudice to the generality of the foregoing, the

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following shall be regarded as causes beyond either partys reasonable control:

11.4.1

explosions, floods, tempests, fire or severe accidents;

11.4.2

war or threat of war, sabotage, insurrection, civil disturbance or requisition;

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11.4.3

acts, restrictions, regulations, by-laws, prohibitions or measures of any kind on the

part of any governmental, parliamentary or local authority; and

11.4.4

unexpected changes in import or export regulations or embargoes

12 Termination
12.1

The Buyer shall at its sole discretion be entitled to cancel the Order in respect of all or part of the
Goods by giving notice to the Supplier at any time prior to delivery, in which event the Buyers
sole liability shall be to pay to the Supplier the Price for the Goods in respect of which the Buyer
has exercised its right of cancellation, less the Suppliers net saving of cost arising from the
cancellation.

12.2

The Buyer shall be entitled to terminate the Order without liability to the Supplier by giving notice
to the Supplier if:
12.2.1

the Supplier fails to take the steps necessary to ensure compliance within the time
frame stipulated by the Buyer, e.g. in accordance with Art. 5.7 of these
Conditions;

12.2.2

the Supplier makes any voluntary arrangement with its creditors or becomes
insolvent or becomes the subject of a court ordered administration or goes into
liquidation (otherwise than for the purpose of amalgamation or reconstruction); or

12.2.3

a creditor takes possession, or a receiver is appointed, of any of the property or

assets of the Supplier; or

12.2.4

the Supplier ceases, or threatens to cease, to carry on business; or

12.2.5

the Buyer reasonably apprehends that any of the events mentioned above is about
to occur in relation to the Supplier and notifies the Supplier accordingly

12.3

The Buyer shall be entitled to terminate an Order without liability to the Supplier, and the
Supplier will reimburse the Buyer for all costs in connection with the termination, including lost
profit and damages to third parties, if:
12.3.1

the Supplier fails to abide by the provisions of any of the documents listed in
Art. 2.1-2.2 of these Conditions; or

12.3.2

the delivered Goods or part of the delivered Goods are not in accordance with the
Order

12.4

In the event of the Buyers rejection or termination of an Order (in whole or in part), the Buyer
may allow the Supplier to sell Goods already produced under the Order to retailers in countries
where the Buyer has no presence. An approval from the Buyer to sell such Goods must be in
Writing. Under no circumstances may such Goods leave the premises of the Supplier until he has
removed, including but not limited to, all markings, labels or price tags that identify the Goods as

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having been produced for or on behalf of the Buyer.

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12.5

Section 12.4 does not apply to orders that concern Goods produced under a license from a third
party. If an Order concerning such Goods is cancelled (in whole or in part) all the Goods must be
destroyed. Goods produced under a license from a third party may under no circumstances leave
the premises of the Supplier or its sub-contractors other than as for fulfilment of Suppliers
obligations under the applicable Order or under these Conditions.

12.6

In the event an Order is cancelled or terminated by the Buyer, any trailing orders to such
Order shall be deemed automatically cancelled, unless the Buyer notifies the Supplier
otherwise in Writing. Supplier shall inquire whether Buyer wants to keep any trailing orders.

12.7

The Buyer continuously develops its business and will work with its suppliers to further
sustainability in the purchasing practices. The Buyer aims at successfully developing and
applying sustainable purchasing practices and will work with suppliers to achieve this goal.
Buyer may, however, stop purchasing from Supplier at any time and at its discretion and
Buyer shall have no obligations or liability whatsoever towards the Supplier in such
situation.

13 Penalties
13.1

To the extent that Goods, not sold by the Buyer or its subsidiaries, relating to an Order and
with information connecting it to the Buyer or a Licensor of the Buyer, is found outside the
premises of the Supplier, its sub-contractors and outside the scope of supply to the Buyer, the
Supplier shall be liable to pay to the Buyer, for each occasion, a penalty of USD 50 000 or, if
higher, an amount corresponding to fifty (50) percent of the Price of the relevant Order(s).

13.2

To the extent that the damage suffered by the Buyer exceeds the penalty, the Supplier
shall compensate the Buyer also for such further damage.

14 Miscellaneous
14.1

A notice given by either party relating to an Order shall be in Writing and shall be addressed to the
other party at its registered office and/or to the principal place of business.

14.2

No waiver by the Buyer of any breach of the Order by the Supplier shall be considered
as a waiver of any subsequent breach of the same or any other provision.

14.3

The headings in these Conditions are for convenience only and shall not affect
their interpretation.

14.4

The English language version of these Conditions shall have precedence over any

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translations made.

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14.5

Any reference in these Conditions to a statute or to a provision of a statute shall be construed as

reference to that statute or provision as amended, re-enacted or extended at the relevant time.

14.6

If any provision of the Order is held by any competent authority to be invalid or unenforceable in
whole or in part the validity of the other provisions of the Order and the remainder of the
provision in question shall not be affected thereby.

15 Governing Law and Disputes

15.1

Any dispute arising under or in connection with the sale and purchase of the Goods, an Order,
including these Conditions, and/or more generally under or in connection with the global
contractual relationship between the Buyer and the Supplier including, without limitation, any
dispute arising under or in connection with the termination of such global contractual relationship,
shall be referred to arbitration in accordance with the rules of the Arbitration Institute of the

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Stockholm Chamber of Commerce.

15.2

The place of the arbitration shall be Stockholm, Sweden.

15.3

The arbitration shall be conducted in the English language.

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H & M HENNES & MAURITZ AB Standard

Purchase Conditions Compliance
Commitment
We (the Supplier) hereby confirm:
(i)

that we have read, taken part of and fully understood H & Ms Standard Purchase Conditions
(page 1-12) and the other documents referred to therein; and

(ii)

that we understand that the Conditions apply to the sale and purchase of goods comprised in
the Order; and

(iii)

that we are bound by the terms set forth in the said Conditions; and

(iv)

that by signing this Compliance Commitment we commit to comply with the Conditions

Date

Company Name

Position in the Company

Signature

Name in printed letters

Company Stamp

Please sign this page and return only this page to H & Ms local office, or to:

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H & M Hennes & Mauritz GBC AB/Buying office/ SE-106 38 Stockholm, Sweden.

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