Common use of Manner of Rejection Clause in Contracts

Manner of Rejection. Company may reject any Die or Product manufactured by the Contractor if such Die or Product fails to meet the Specifications or contains a Manufacture Defect when inspected by the Company. The Company shall notify the Contractor within five (5) days of receipt of the Die or Product if the Die or Product is rejected. The Company may, at its option, (i) return the Die or Product to the Contractor for rework, (ii) rework the Product, and charge any labor cost, not to exceed Contractor’s Value Added, to the Contractor, or (iii) scrap the Die or Product if it cannot be reworked. If the Die or Product is scrapped, the Contractor shall, at the request of Company, replace the Die or Product so scrapped, or reimburse the Company for the amount charged to Company for the Die or Product so scrapped.