A Comparative Study on Warranties, Indemnification and Limitation of Liability Clauses of ODM Agreements

• Main Authors: Chi-Feng Lin, 林其鋒
• Other Authors: Shin-Yi Huang
• Format: Others
• Language: zh-TW
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/95802691306370666574

碩士 === 東吳大學 === 法律學系 === 102 === Abstract Warranty, indemnification, and limitation of liability are consistently indentified as major concerns of manufacturers in their business contracts with customers or key-component suppliers. The electronics manufacturing industry has led Taiwan’s economy for years, in the global supply chain; however, manufacturers in Taiwan cannot avoid but execute significant contracts drafted in English and govern by common law, e.g., the laws of a state of the U.S.A. Thus, the manufacturers should be well aware of the relevant laws and contract practice in such jurisdictions. For the aforesaid purpose and from a drafting perspective, this thesis begins by surveying the principles of American contract laws (including common law, U.C.C., Restatement (Second) of Contracts, etc.) governing the topics of remedy for breach of contract, damages, limitation of liability, warranty and indemnification. Then, it discusses what the parties can do, subject to certain exceptional rules, to contract around the default rules and focus on the remedies they actually need. This thesis also explores whether corresponsive articles are provided in CISG and the laws of Taiwan for the topics herein, and the differences between the principles of American contract laws. By applying the comparative law approach, the parties may avoid misunderstanding and improve effectiveness and efficiency in contract negotiation. Finally, this thesis discusses the current practice of manufacturers’ use of warranty, indemnification and limitation of liability clauses. For the purpose of illustration, this thesis suggests sample clauses for warranty, indemnification and limitation of liability clauses of ODM Agreements, with drafting notes connecting the relevant laws previously discussed. Suggestions are also made for resolving issues frequently arising from the aforesaid clauses in ODM Agreement. It is hoped that the suggestions can be the useful reference for electronics manufacturers in Taiwan.