Purchasing Order Terms & Conditions

Purchasing Order Terms & Conditions

1. General

These terms and conditions shall govern all purchase orders (“POs”) issued either by Shake Shack Enterprises, LLC or any of its affiliates or subsidiaries (collectively, “Shake Shack”) to the supplier identified in each PO (each, a “Supplier”) with respect to the purchase of goods and/or services (collectively, the “Deliverables”) specified in a PO.

Fulfillment of any part of a PO, or any other conduct by Supplier that recognizes the existence of an agreement between the parties pertaining to the subject matter of such PO, shall constitute acceptance by Supplier of such PO and these terms and conditions.

In the event that there is a written agreement between the parties that conflicts with these terms and conditions, the terms of the written agreement shall control for the specific provision(s) in conflict.

2. Specifications and Description.

The Deliverables described in the PO shall be furnished in accordance with any specifications submitted by Shake Shack to Supplier, or provided by Supplier to Shake Shack, in connection with the transactions contemplated by the PO (collectively, the “Specifications”).

3. Delivery

Delivery in respect of the Deliverables shall be deemed to have occurred (i) when the Deliverables arrive at the location identified on the PO and Shake Shack acknowledges receipt in writing and/or (ii) when Supplier has completed performance of the Deliverables and Shake Shack acknowledges completion in writing (in each case, the “Delivery”). Late Delivery shall not constitute a waiver of Shake Shack’s rights to hold Supplier liable for any loss or damage resulting therefrom, nor shall it act as a modification to Supplier’s obligations to deliver Deliverables in the future at the times or in accordance with the schedule established herein. Shake Shack reserves the right to refuse any Deliverables furnished in advance of or after the in respect of the timelines set forth in a PO, and to return, at Supplier’s risk and expense, any such advance or late Delivery, or to defer payment on advance Delivery until the times scheduled within such PO.

4. Inspection and Transfer of Title/Risk of Loss

(a) Inspection. All goods shall be subject to inspection by Shake Shack both before and after completion of Delivery. Shake Shack reserves the right to reject and refuse Delivery of goods that are not in accordance with the express or implied Specifications. Non-conforming goods will be returned to Supplier at its risk and expense.

(b) Transfer of Title and Risk of Loss. Title to and all risk of loss or damage to the goods shall remain with Supplier until the goods are Delivered to Shake Shack. At no point is the risk of loss with any Delivery on the Customer.

5. Payment Terms; Invoicing

Unless otherwise specified on the PO, payment shall be due sixty (60) days after the latter to occur of (i) Delivery or (ii) Shake Shack’s receipt of an accurate invoice for the Deliverables. All invoices must include, at a minimum, a PO reference number; a clear description of the Deliverables, including quantity, cost per unit and total item cost; invoice issue date; payment due date; Delivery date; and an itemization of all costs, including freight and taxes.

6. Taxes

All local, state and federal excise, sales and use taxes, when applicable, that are to be paid by Shake Shack must be stated separately on both the PO and on Supplier’s invoice. Unless otherwise specified on the PO, the prices stated on the PO include all taxes. Other than as specified on the PO and on Supplier’s invoice, Shake Shack shall not be liable for any taxes or tax withholding, including but not limited to taxes related to Supplier’s income, assets or obligations as an employer with respect to payments made to Supplier hereunder.

7. Audit Rights

Supplier shall provide Shake Shack such information relating to the accuracy of the charges invoiced to Shake Shack (including the basis on which such charges were derived) as Shake Shack shall from time to time reasonably request. Supplier shall permit Shake Shack reasonable access to Supplier’s books and records for purpose of verifying the charges invoiced for the Deliverables. Any invoice amounts shown to be incorrect shall be settled promptly by Supplier.

8. Representations, Warranties and Covenants.

Supplier represents, warrants and makes a continuing covenant to Shake Shack that, to the extent applicable:

(a) Supplier has the power and authority to enter into each PO and to perform its obligations hereunder;
(b) All Deliverables furnished hereunder (i) will be merchantable, fit for the intended use and free of defects in workmanship; (ii) will conform to and will perform in accordance with the applicable Specifications; (iii) will not, and the use thereof by Shake Shack will not, infringe, misappropriate or violate any intellectual property or other proprietary right of any third party; and (iv) when used in line with their intended purpose, will not cause injury (including death) or damage to any person or property;
(c) Supplier’s performance of all obligations hereunder, and the Deliverables, will be in strict compliance with all applicable law;
(d) Supplier shall use only qualified personnel to perform the services, and will be fully responsible for the supervision, management and control of its representatives;
(e) Supplier shall, and shall cause its representatives to, comply with all applicable laws, and if on Shake Shack’s premises, with all of Shake Shack’s rules, policies and procedures;
(f) While on Shake Shack’s premises, all damage caused in connection with the Delivery of the Deliverables shall be repaired and restored to the original condition;
(g) Supplier shall be responsible for all acts, errors, and omissions of its representatives.

The foregoing shall survive the inspection, Delivery and payment, and are in addition to any other warranties or service guarantees of Supplier.

9. Compliance with Supplier Compliance Policy

Supplier and its representatives shall comply with Shake Shack’s Supplier Compliance Guidelines set forth at https://www.shakeshack.com/purchasing/supplier-guides (as may be updated from time to time by Shake Shack), and any breach by Supplier of these guidelines shall constitute a material breach of these terms and conditions.

10. Confidential Information

Supplier shall keep confidential and not use or disclose to any person or entity any Deliverables and/or any information Supplier may learn relating to Shake Shack’s business, these terms and conditions, any PO or any written agreement signed by the parties (collectively, the “Confidential Information”). Supplier shall use the Confidential Information solely as necessary to provide the Deliverables set forth in the PO.

11. Insurance

Supplier represents and warrants and makes a continuing covenant to Shake Shack that it shall at all relevant times during the period of performance hereunder (the “Coverage Period”) have:

(a) Commercial General Liability Insurance coverage on the latest version of ISO form CG 00 01 or its equivalent in an amount of not less than $1.0 million per occurrence, $2.0 million general aggregate.
(b) If vehicles are used in connection with the obligations of Supplier hereunder, then Commercial Automobile Insurance (including coverage for owned, hired, and non-owned vehicles) on a form equal to the latest version of ISO form CA 00 01 with a Combined Single Limit of at least $1.0 million per occurrence.
(c) Umbrella Liability or Excess Liability coverage, at least following the form of the underlying Commercial General Liability policy, with limits of $2.0 million per occurrence and $2.0 million general aggregate.
(d) Workers’ Compensation Insurance in an amount no less than required by law, and Employers’ Liability Insurance coverage in the amount of $1.0 million.
(e) If the performance of services by Supplier is contemplated on the PO, then Professional Liability/Errors & Omissions Insurance with minimum limits of $1.0 million per claim and in the aggregate;
(f) All other insurance required by law or that Shake Shack may reasonably request.

Additional Insured status shall be granted by use of the latest version of ISO endorsement CG 2010 and CG 2037 or endorsements providing Additional Insured status for both Ongoing Operations and Completed Operations for all parties required hereunder. The endorsements shall name Shake Shack Enterprises, LLC as Additional Insured. The coverage afforded to the Additional Insureds shall be written on a primary basis, and shall not require or contemplate contribution by any other policy or policies obtained by, or available to, any Additional Insured; any other such coverage shall be excess over the coverage to be provided by Supplier. Supplier’s insurance policies shall include a Waiver of Subrogation in favor of Shake Shack.

All policies shall be written with insurance companies authorized to do business by the state where the services are being performed and rated by A.M. Best Company at least A minus (policyholders rating) and IX (financial rating).

All policies shall be endorsed to require at least 30 days’ advance notice, certified mail, to Shake Shack, 225 Varick Street, Suite 301, NY, NY 10014, Attn: General Counsel, of cancellation, non-renewal, or reduction in coverage.

As soon as possible before the provision of the Deliverables, Supplier must provide proof of the insurance coverages required herein by way of a current and acceptable Certificate of Insurance (and a complete copy of the insurance policies upon request) therefor.

12. Indemnification

Supplier shall indemnify, defend and hold harmless Shake Shack, and its respective directors, officers, members, partners, representatives, agents and employees (each an “Indemnitee”), with counsel reasonably acceptable to Shake Shack, from and against and in respect of any and all demands, claims, actions or causes of action, assessments, losses, damages, liabilities, interest and penalties, costs and expenses (including, without limitation, reasonable attorney fees and disbursements incurred in connection therewith and in seeking indemnification therefor, and any expenses required to be paid or incurred in connection with any action, suit, proceeding, claim, appeal, demand, assessment or judgment) (“Claims”) by a third party of or in any way relating to or based upon: (a) a breach by Supplier of any of its representations, warranties or covenants in this Agreement, (b) Supplier’s performance or non-performance of any obligation in this Agreement, (c) any acts or omissions by Supplier or its representatives, resulting in whole or in part, directly or indirectly, in personal injury (including death) or damage to real or personal property; (d) the possibility that any Deliverables or the use thereof infringe, misappropriate, breach or violate any intellectual property right, right of privacy, common law right or any other rights; (e) Supplier’s negligence or intentional misconduct; and (f) any claim of any kind or nature whatsoever brought by an employee, agent, subcontractor or independent contractor of Supplier.

13. Limitation of Liability

Except in connection with a breach of Section 10 or 16 or an obligation under Section 12, in no event shall either party be liable to the other party for any indirect, consequential, incidental, exemplary, punitive or special damages In connection with the transactions contemplated by this Agreement, whether or not liability is based on breach of contract, tort, strict liability, breach of warranty, failure of essential purpose or otherwise.

14. Changes

Shake Shack reserves the right on written notice to Supplier to make changes to or suspend in whole or in part the Deliverables to be provided by Supplier. Thereafter, if requested by Shake Shack, the parties shall mutually agree on any requested changes, including with respect to price.

15. Cancellation

Shake Shack may at any time cancel a PO upon written notice to Supplier, in which event Shake Shack shall be obligated to pay for such portion of the Deliverables provided by Supplier and accepted by Shake Shack.

16. Publicity

Each of Shake Shack and Supplier agrees not to publicize or advertise its engagement with the other or to use any name, trademark, service mark or logo of the other in any publicity, advertising or information that is disseminated to the general public without the prior written approval of the other party.

17. Independent Contractors

Nothing in this Agreement shall constitute or be construed to be or create a partnership or joint venture between parties hereto.

18. Governing Law and Jurisdiction

These terms and conditions and the PO shall be governed by and construed under New York law, without regard to conflict of law principles. Any dispute arising hereunder shall be heard by a court of competent jurisdiction in New York, New York.