Common use of Costs of the Audit Clause in Contracts

Costs of the Audit. (a) Subject to clause 34.7(d), each Party will bear its own costs associated with audits and inspections. (b) If an audit or inspection reveals that the Supplier has overcharged or been underpaid or materially breached this agreement, the Supplier will be responsible for promptly paying an overcharge to XL and XL will be responsible for paying an underpayment. (c) If any audit reveals that the Supplier’s invoices for the audited period are not correct for such period: (i) the Supplier must promptly reimburse XL for the amount of any overcharges; or (ii) XL must promptly pay to the Supplier the amount of any undercharges, as the case may be. (d) If: (i) the Supplier is responsible for paying an overcharge to XL under clauses 34.7(b) or (c), then the Supplier will bear all costs of the Supplier and XL associated with the audit or inspection; and (ii) XL is responsible for paying an underpayment under clauses 34.7(b) or (c), then XL will bear all costs of the Supplier and XL associated with the audit or inspection.