Cotney Newsletter

Manufacturer Warranty Price Increase Provision

With the recent news that manufacturers were raising the prices of warranties, a provision is needed to account for this price increase in the contract and pass it on to the Customer. The following provision can be used in either a prime contract or a subcontract. 

Due to current pricing volatility experienced nationwide, any cost included hereunder for a manufacturer warranty is Customer’s price for the warranty as of the time of entering this Agreement. Contractor cannot and does not guarantee that the cost will not be increased by the manufacturer between the time of entering this Agreement and the time the warranty is registered/issued, and as such, Customer understands and agrees that if there is an increase in the actual cost of the manufacturer warranty in excess of 5% subsequent to the making of this Agreement, the price set forth in this Agreement shall be increased without the need for a written change order or amendment to the Agreement to reflect the price increase and additional direct cost to the Contractor. Contractor will submit written documentation of the increased cost to Customer upon request, however, Customer acknowledges that any additional costs/payment for the issuance of a manufacturer warranty under this Agreement is the sole responsibility of Customer, and Contractor shall not be held liable or responsible for same. 

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.