Shrinkage Allowance. Customer acknowledges that some damage or loss to Customer’s Products at the Facility may occur during the performance of the Services. Accordingly, Customer agrees that NDC shall be entitled to the annual damage and shrinkage allowance of one-tenth of one percent (0.1%) of Customer’s inventory (valued at wholesale price) based on the variance between actual physical count and perpetual system inventory at the time of annual physical inventory taking (the “Shrinkage Allowance”), which must be exceeded prior to NDC being liable for any damage, loss or shortages of Customer’s Products, provided NDC has followed in all material respects the Standard Operating Procedures and the security requirements set forth on Schedule 1.8. In the event the Standard Operating Procedures or security requirements are not followed in all material respects, then NDC shall be responsible for all damage and loss of Products at the Facility. If NDC learns of any loss or damage to Product and/or property in the Facility, NDC will immediately notify Customer of such fact and request instructions, and any related claims by Customer shall be made in accordance with Section 6.1(d), and shall be supported by reasonably detailed copies of documentation of the wholesale price for the damaged items.
Appears in 2 contracts
Sources: Operating Services Agreement, Operating Services Agreement (Kid Brands, Inc)