Terms & Conditions

TERMS AND CONDITIONS

The following Terms and Conditions apply to the various transactions between homeowners, general contractors, subcontractors, (individually, “Customer” and collectively, “Customers”) and R&K Building Supplies, Inc. (“R&K”). Customers agree to the following applicable Terms and Conditions by signing a purchase order, signing a pick ticket, accepting an R&K bid, or by allowing or requesting R&K to commence work on a project. Furthermore, Customers agree to the applicable Terms and Conditions when an R&K bid is incorporated by reference into a subcontract. Note: Some terms or conditions apply to certain transactions and may not apply to others. The corresponding headers will indicate who is bound to the terms and conditions listed under that header.

GENERAL TERMS AND CONDITIONS (Apply to all transactions with R&K)

1. Definitions

1.1. “Agreement”- includes bid and quote forms, invoices, Scope of Work Agreements, Authorization to Work Agreements, Subcontract Agreements, these Terms and Conditions, any attachments, schedules, addenda, or exhibits, and all documents incorporated by reference. 1.2. “Customer”- means any individual, entity, or partnership that purchases Product or installation services from R&K. 1.3. “Damaged Material”- includes, but is not limited to, Product that is cut, re-sawn, nailed, painted, mishandled, opened, has water-damage, or has no resale value. 1.4. “Default”- includes, but is not limited to, failure to make timely payments, breach of an Agreement, failure to abide by these Terms and Conditions, or failure to give adequate assurance as outlined in section 7 below. 1.5. “Issue”- means a dispute, controversy, or claim arising out of or related to an Agreement. 1.6. “Product”- includes lumber, insulation, manufactured doors, trusses, windows, hardware, or related items that R&K routinely stocks. 1.7. “Parties”- includes Customer and R&K in regards to dispute resolution procedures listed in section 8 below. 1.8. “Special Order Product”- includes material specifically ordered for a customer, manufacture direct product, or customer ordered material that R&K does not routinely stock.

2. Acceptance R&K conditions its acceptance of Customer’s Purchase Order or subcontract agreement on Customer’s acceptance of these Terms and Conditions, which Terms and Conditions supersede additional or different terms contained in Customer’s Purchase Order, subcontract, other document, or communication. Furthermore, R&K conditions its acceptance for orders upon credit approval. Customer’s acceptance or payment for all or any product delivered or installed is conclusive evidence of Customer’s assent to these Terms and Conditions. 3. Payment Customer shall pay all invoices within 30 days from date of invoice or according to the Arizona Prompt Payment Act (“APPA”) (See A.R.S. §32-1129.01 et seq.), whichever is earlier in time. If Customer desires to change any provision of the APPA, then Customer must strictly comply with the notice requirements in the APPA. 4. Price Increase This Price Increase clause provides for a fair allocation of the risk of future market conditions between R&K and Customer. R&K’s bid/quote prices are valid for thirty days from the date on the bid/quote form, unless specified as less on the bid/quote form. If Customer makes an offer using R&K’s bid/quote price within the specified time, R&K will not increase the bid/quote price unless R&K receives a price increase.

4.1. Economic Fluctuation- Product may experience economic fluctuation that may impact price, availability, and delivery time frames. 4.2. Baseline Price and Time- Customer and R&K agree the initial bid/quote price is the “Baseline Price”. The method for calculating an adjustment in the pricing for Product is the invoice method. Compensation for any Product cannot be duplicated in any contingency amounts established under the terms any subcontract agreement. 4.3. Adjustment in Baseline Price-

4.3.1. If R&K receives notice that Product may experience an increase in price, R&K may notify Customer within thirty (30) days from the date R&K receives notice of the price increase. If R&K notifies Customer of a price increase, then R&K will provide appropriate documentation substantiating the price increase. 4.3.2. In the event of an increase price, the Subcontract Contract Price or Baseline Price shall be equitably adjusted to reflect the price increase, subject to section 4.3.3 below, but only for the Product delivered on or after the date on which R&K gives written notice of the adjustment in price. R&K will not include overhead or profit in the price increase. 4.3.3. The Subcontract Contract Price or Baseline Price may not be adjusted by more than ten (10%) percent of the original Subcontract Contract Price or Baseline Price for the aggregate of the increases in price. 4.3.4. Adjustment may not be made for any quantities of Product scheduled for delivery under the terms of a subcontract agreement or initial bid/quote form prior to the date on which R&K gives written notice of the adjustment in price, unless the failure to deliver scheduled Product before that date is beyond the control of or without the fault of R&K or its Product Suppliers. 4.3.5. Payment, if any, for an adjustment shall be made in accordance with the terms of these Terms and Conditions. 4.4. Time-Impact and Availability- If R&K is delayed at any time due to a delay in the delivery or unavailability of Product that is beyond the control of and without fault of R&K and its Product Suppliers, R&K shall be entitled to an equitable extension of time. R&K is not liable for any expenses, losses, or damages that arise from delay in the delivery of Product from the fault of others. 4.5. Anti-collusion and Fraud- If Customer requests within ten (10) days after receiving notice of a price increase an explanation, R&K agrees to seasonably provide Customer with a written explanation for the increase, including reasonable details about R&K’s relevant cost structures, to prove that R&K is acting in good faith with regard to the price increase and not fraudulently underbidding to obtain the Customer’s purchase/work. Additionally, R&K shall not collude with its Product Supplies to receive a price increase.

5. Default Customer is in default for invoices not paid within 30 days or according to APPA. R&K charges 1 1/2% per month (18% APR) for overdue amounts. In the event of default, Customer further agrees to pay all service charges assessed against Customer, plus all actual attorney fees and collection costs R&K incurs to enforce these Terms and Conditions or to collect money from Customer. Customer agrees that time is of the essence. 6. Credit Policy At all times, purchases, deliveries, and performance of work by R&K are subject to the approval and requirements of the R&K credit department, including the requirement that Customer pay entire or part of the purchase price in advance. 7. Adequate Assurance If Customer’s financial responsibility or contract performance becomes unsatisfactory to R&K at any time, R&K may suspend and withhold further manufacture, deliveries, Product, or performance. Customer may lift and overcome any suspension by posting with R&K within thirty (30) days security in amount and kind satisfactory to R&K. Customer is still obligated to pay for Product previously delivered or ordered and work performed up to the date of suspension. 8. Dispute Negotiation and Arbitration

8.1. Negotiation

8.1.1. Customer shall attempt in good faith to promptly negotiate and resolve any dispute arising out of, or relating to, these Terms and Conditions or any Agreement between Customer and R&K. The negotiation must be between executives who have authority to settle the controversy. Customer must give R&K written notice of any dispute not resolved in the normal course of business. After delivery of the notice, R&K shall submit a written response to the Customer within a reasonable time. With reasonable particularity, the notice and response must include (a) a statement of each party’s position and a summary of arguments supporting that position, and (b) the name and title of the executive who will represent that party and of any other person who will accompany the executive. Within 30 days after delivery of the notice, the executives of both parties shall meet at a mutually acceptable time and place. 8.1.2. The negotiation ends at the close of the first meeting of executives described above (“First Meeting”). The close of the First Meeting does not preclude continuing or later negotiations, if desired. If either party requests continuing negotiations, then the parties must follow the notice and meeting requirements above. The parties may not request continuing negotiations more than once. 8.1.3. All offers, promises, conduct and statements, whether oral or written, made in the course of the negotiation by any of the parties, their agents, employees, experts and attorneys are confidential, privileged and inadmissible for any purpose, including impeachment, in arbitration or other proceeding involving the parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the negotiation. 8.1.4. Prior to the First Meeting, Customer may not initiate arbitration or litigation for any issue related to these Terms and Conditions.

8.2. Arbitration

8.2.1. If Customer and R&K are unable to resolve an issue by negotiation, then the follow procedure must be followed after attempting negotiation in good faith:

8.2.1.1. For an issue of less than $75,000, then either party may initiate litigation. 8.2.1.2. For an issue of $75,000 or more, then either party may request arbitration. The American Arbitration Association (“AAA”) shall administer the arbitration pursuant to the AAA’s Construction Industry Arbitration Rules. 8.2.2. Arbitrator- A single arbitrator shall hear the arbitration. The arbitrator has the power to determine any issue arising out of, or relating to, these Terms and Conditions or any Agreement between the parties, including breach, termination, enforcement, interpretation, or validity. The arbitrator has power to determine the scope and applicability of these arbitration clauses. The arbitration will take place in Gilbert, Arizona. 8.2.3. Discovery and Document Submission- The arbitrator must determine the number and length of depositions based upon the complexity of the issue. The arbitrator may allow document discovery. The parties may not raise objections, except objections based on privilege, proprietary, or confidential information. The parties may submit one brief of 30 double-spaced pages in 13-point font with one-inch margins and 10-point font for footnotes. The brief must include a statement of each party’s position and a summary of arguments supporting that position. Also, the parties may submit materially relevant documents. 8.2.4. Hearing- Time is of the essence in dispute resolution. The arbitrator shall hold the hearing within 90 days of filing for arbitration and awards issued within 120 days. The arbitrator must agree to these limits prior to accepting appointment. 8.2.5. Arbitrator’s Award- The arbitrator shall award to the prevailing party, if any, the costs and attorneys’ fees reasonably incurred by the prevailing party in connection with the arbitration. 8.2.5.1. If the arbitrator determines a party to be the prevailing party under circumstances where the prevailing party won on some, but not all, of the claims and counterclaims, the arbitrator may award the prevailing party an appropriate percentage of the costs and attorneys’ fees reasonably incurred by the prevailing party in connection with the arbitration. The arbitrator shall give a 10-page written explanation setting forth the reasons for the disposition of every claim and counterclaim. The arbitrator may not include punitive, consequential, or incidental damages in the award. 8.2.5.2. Anti-Solomon Provision- The arbitrator may not split the award equally among the parties unless the fault is clearly split between the parties. 8.2.6. Appellate Review- Within 30 days of receipt of any arbitration award, which shall not be binding if an appeal is taken, any party may notify the AAA of an intention to appeal to a second arbitrator, constituted in the same manner as the initial arbitration. For the appellate arbitration, each party may submit one brief of 30 double-spaced pages in 13-point font with one-inch margins and 10-point font for footnotes. The appellate arbitrator may adopt the initial award, modify the initial award, or substitute its own award for the initial award. If the appellate arbitrator modifies or substitutes the initial award, then the appellate arbitrator shall give a 10-page written explanation setting forth the reasons for the disposition of every claim. The appellate arbitrator has no authority to modify, or replace any part of the award that does not relate to the manifest disregard of the law claim. The appellate arbitrator’s award is final and binding, and judgment may be entered by a court having jurisdiction.

8.3. Lien Rights- This Dispute Negotiation and Arbitration clause shall not preclude any party from filing a statutory construction lien or from commencing suit to foreclose a lien, but the foreclosure suit shall be stayed until the rendering of the arbitration award, which award shall be binding in the foreclosure suit as to all matters determined in arbitration, and the lien may then be foreclosed to the extent permitted by law. 8.4. Severability Clause- If a court, mediator, or arbitrator holds a provision of this Dispute Negotiation and Arbitration clause to be unenforceable, all other provisions remain in full force. 8.5. Confidentiality- The parties shall maintain the confidential nature of the arbitration proceeding and the award, including the hearing, except as may be necessary to prepare for or conduct the arbitration hearing on the merits, or as may be necessary in connection with a court application for a preliminary remedy, a judicial challenge to an award or its enforcement, or unless otherwise required by law or judicial decision.

9. Product Pickup Policy

9.1. Customer is responsible for and releases R&K from any damage to Customer’s vehicle from loading and unloading product. R&K may refuse to load product if Customer does not bring an appropriately sized vehicle. Customer is responsible for tie-down and safe transportation of the product to its intended destination. R&K’s warranty does not cover damage that occurs from improper tie-down or from the effects of transit. 9.2. Customer is responsible for the accuracy of the order. At time of pick-up, Customer must check for damages or missing items and note the damage or missing items on the pick ticket. Customer may not make a claim for damages or missing items after pick-up. Note- Customer must exercise extreme caution in product pick-up areas. There are moving trucks and forklifts in the product pick-up areas. Stay with your vehicle and do not permit children to exit the vehicle while in pick-up areas.

10. Warranties R&K does not warrant or guarantee Product beyond the respective manufacturer’s warranty or guarantee. R&K warrants that the Product supplied under an invoice or bid/quote form conform to the description on the invoice or bid/quote form. The foregoing warranty is Customer’s sole warranty with respect to the Product provided. Except to the extent of the invoice or bid/quote form descriptions, R&K disclaims all other warranties, whether express or implied, including, but not limited to, implied warranties of merchantability and fitness for a particular purpose. In no event will R&K be liable for incidental or consequential damages, whether based on breach of express or implied warranty, breach of contract, negligence, strict liability, or any other legal theory. Use of Products- Customer shall comply with the manufacturer’s or supplier’s Product specifications for installation and use. R&K is not liable for personal injury, loss of life, or property damage due to Customer’s improper installation or misuse. Customer acknowledges and accepts the risk with improper installation or misuse of Product purchased from R&K. 11. Integration Bid and quote forms, invoices, Scope of Work Agreements, Subcontract Agreements, these Terms and Conditions, any attachments, schedules, addenda, or exhibits, and all documents incorporated by reference are one agreement and form the entire agreement between R&K Building Supplies, Inc. (R&K) and Customer. The entire agreement supersedes any prior representations, whether oral or written, and all other communications between R&K and Customer. 12. Security Interest Customer grants, and R&K retains, a purchase money security interest in all Product not paid for in full, notwithstanding R&K delivers the goods to Customer. Customer authorizes R&K to execute and file financing statements that describe the Product and other documents that evidence R&K’s security interest. 13. Modification These Terms and Conditions may not be added to, modified, superseded, or otherwise altered, except by a written instrument signed by an authorized representative of R&K that explicitly states, “This Agreement modifies R&K’s Terms and Conditions.” 14. Indemnification Customer agrees to save and hold R&K harmless from any claims, demands, liabilities, costs, expenses or judgments arising in whole or in part, directly or indirectly, out of the negligence or lack of care by Customer or Customer’s customers, agents, employees, or invitees involving the use of the Product supplied by R&K. This indemnification shall include all costs, attorney fees, and other expenses paid or incurred by or imposed upon R&K in connection with the defense of any indemnity claim. 15. Governing Law Arizona law governs these Terms and Conditions regardless of conflict of law rules, except where specifically stated otherwise. 16. Severability If a court, mediator, or arbitrator holds a provision of these Terms and Conditions to be unenforceable, all other provisions remain in full force. 17. Changes to Terms and Conditions These Terms and Conditions may change at any time and Customer is responsible any changes that are made.

PRODUCT SUPPLY TERMS AND CONDITIONS (Apply to transactions where R&K is supplying product)

18. Delivery and Shortage R&K delivers Product to the curb. R&K is not responsible for damage when Customer requests delivery on the premises. Customer agrees to use Product and supplies from R&K in and upon the premises described in the ship to. R&K is not liable for any damages caused by failure or delay in delivering Product if the failure or delay is due to events beyond R&K’s reasonable control, including, but not limited to, the following: war; embargo; riot; fire; flood; accident; mill condition; strike or other labor difficulty; an act of Customer or third party; an act of God; an act of governmental authority; transportation shortage or failure; inability to obtain sufficient fuel, labor, Product, or manufacturing facilities; or any other cause. R&K may assess a delivery charge depending upon department and Product ordered. R&K checks for accuracy before deliveries leave R&K facilities. R&K does not issue credit for lost or missing Product after delivery. For Customer to make a claim for shortage, Customer must check load for shortage with driver at time of delivery. 19. Returns R&K reserves the right to limit or refuse to accept the return of any Product at any time and for any reason. Customer must report defective Product to an R&K Sales Representative or Dept. Manager within 24 hours of delivery to be eligible for credit. An R&K Sales Representative or Dept. Manager must approve in advance which Product is eligible for credit. R&K charges a 15% restocking fee for Product that Customer over-ordered and returns for credit. Customer shall stack all excess Product for credit in one area of the job site to preserve value and to assure quick and efficient pick-up and handling. Customer must direct inquiries regarding credit memos to the appropriate R&K Sales Representative or Dept. Manager. In some instances, credit cannot be issued until the respective manufacturer’s representative inspects and evaluates the cause and value. R&K does not accept returns for Special Order Product. R&K may grant partial credit for returned Product that R&K can resell for lower value. R&K does not accept returns for Damaged Material. R&K does not accept returns for Product not purchased from R&K.

PRODUCT INSTALL TERMS AND CONDITIONS (Apply to transactions where a general contractor, subcontractor, or residential homeowner has contracted with R&K to install Product)

20. Bids and Quotes R&K’s bid/quote prices are valid for thirty days from the date on the bid/quote form, unless specified as less on the bid/quote form. R&K conditions its acceptance for orders upon credit approval. R&K’s bid/quote forms are not offers, but estimates and are subject to stock on hand and prior sale. R&K estimators arrive at the quantity of Product on the estimate using their best ability. However, R&K cannot guarantee that the estimated quantities will satisfy Customer’s requirements. R&K does not assume liability for clerical errors. R&K’s submission of a bid/quote form does not constitute acceptance of Customer’s subcontract agreement/terms. Furthermore, R&K’s bid/quote forms are subject to these Terms and Conditions or mutually agreeable terms with Customer. By instructing R&K to commence work or preparation for work, Customer accepts R&K’s bid/quote form and these Terms and Conditions. In the event of any conflict between the scope of the bid/quote form and any other document, the bid/quote form scope shall govern. 21. Scheduling Customer may not adjust the project schedule more than once a week. Customer must notify R&K of changes in the project schedule at least seven (7) days in advance. R&K is not bound by modifications to the project schedule that occur as of the result of forces outside of R&K’s control. R&K may make reasonable adjustments to crews and deliveries to meet project schedules. 22. Proper Install Conditions Typically, R&K inspects conditions before installing Product. Customer shall provide adequate Install Conditions. R&K is not liable for any damages for poor Install Conditions or for improper installation when Customer neglects to provide adequate Install Conditions. 23. Products with Flush Sills Certain Products have sills that are flush with the ground. Flush sill Products pose a risk that water will penetrate the sill and enter the interior of the home, even with a proper install. Water entering through the sill could lead to (i) water damage to interior floors, walls, furniture, or other possession; and (ii) cause interior floors to be slick, which could lead to slips or falls in the home. Customer assumes the risk that water causes upon entering the sill of a flush sill Product.  
Updated 05/2016