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Fuel Tech, Inc. Purchase Agreement Terms and Conditions

As used herein, "Seller" includes Seller, its subsidiaries and affiliates; "FT" includes Fuel Tech, Inc. and its subsidiaries and affiliates. Seller and FT hereby agree as follows:

1. SERVICES & DELIVERABLES. Seller agrees to perform the services (“Services”) and/or provide the goods or Service deliverables (collectively referred to as “Goods”), described in any FT purchase order, in accordance with the applicable FT purchase order, scope of work and with these Terms and Conditions (“Agreement”). Upon acceptance of a FT purchase order, shipment of Goods or commencement of a Service, Seller shall be bound by the provisions of this Agreement, including all provisions set forth on the face of any applicable FT purchase order.,
This writing does not constitute a firm offer within the meaning of Section 2205 of the Illinois Uniform Commercial Code, and may be revoked at any time prior to acceptance. FT hereby objects to any terms proposed in Seller’s acceptance, acknowledgement of FT’s offer or any other form of Seller which adds to, varies from, or conflicts with the terms and conditions of the Agreement. Any such proposed terms shall not operate as a rejection of this offer but shall be deemed a material alteration, and this offer shall be deemed accepted by Seller without said additional or different terms. To the extent that this Agreement might be treated as an acceptance of Seller’s prior offer, such acceptance is expressly made on condition of assent by Seller to the terms hereof and shipment of the Goods or beginning performance of any Services by Seller shall constitute such assent. FT hereby reserves the right at any time prior to shipment of the Goods or prior to commencement of any Services, to reschedule any delivery or cancel any purchase order issued. FT shall not be subject to any charges or other fees as a result of such rescheduling or cancellation. FT reserves the right to make changes to the specifications of any Goods or Services covered by a FT purchase order. If such changes cause an increase or decrease in the cost of or time required for performance, an equitable adjustment in the price and/or delivery schedule shall be made. No changes shall be effective unless in a written amendment to the FT purchase order signed by FT.

2. DELIVERY. Time is of the essence. Delivery of Goods shall be made pursuant to the schedule in FT’s purchase order, via the carrier and to the place specified on the face of the applicable FT purchase order. FT reserves the right to return, shipping charges collect, all Goods received in advance of the delivery schedule. If no delivery schedule is specified, the FT purchase order shall be filled promptly and delivery will be made by the most expeditious form of land transportation. If no method of shipment is specified in the purchase order, Seller shall use the least expensive carrier. In the event Seller fails to deliver the Goods within the time specified, FT may, at its option, decline to accept the Goods and terminate the Agreement or may demand its allocable fair share of Seller’s available Goods and terminate the balance of the Agreement. Seller shall package all items in suitable containers to permit safe transportation and handling. Each delivered container must be labeled and marked to identify contents without opening and all boxes and packages must contain packing sheets listing contents. FT’s purchase order number must appear on all shipping containers, packing sheets, delivery tickets and bills of lading.

3. IDENTIFICATION, RISK OF LOSS & DESTRUCTION OF GOODS. Identification of the Goods shall occur in accordance with Section 2501 of the Illinois Uniform Commercial Code. Seller assumes all risk of loss until receipt by FT at the FT designated location. Title to the Goods shall pass to FT upon receipt by it of the Goods at the FT designated destination. If the Goods ordered are destroyed prior to title passing to FT, FT may at its option cancel the Agreement or require delivery of substitute Goods of equal quantity and quality. Such delivery will be made as soon as commercially possible. If loss of Goods is partial, FT shall have the right to require delivery of the Goods not destroyed.

4. PAYMENT. As full consideration for the performance of the Services, delivery of the Goods and the assignment of rights to FT as provided herein, FT shall pay Seller (i) the amount agreed upon and specified in the applicable FT purchase order, or (ii) Seller’s quoted price on date of shipment (for Goods), or the date Services were started (for Services), whichever is lower. Applicable taxes and other charges such as shipping costs, duties, customs, tariffs, imposts and government imposed surcharges shall be stated separately on Seller's invoice. Payment shall only be due after final completion and delivery of the Goods and Services and FT’s acceptance thereof. Payment shall not constitute acceptance. All personal property taxes assessable upon the Goods prior to receipt by FT of Goods conforming to the FT purchase order shall be borne by Seller. Each invoice submitted by Seller must reference the applicable FT purchase order, and FT reserves the right to return all incorrect invoices. Seller shall invoice FT only for all Goods delivered and all Services actually performed. All of Seller’s payment requests shall be accompanied by all lien waivers, lien releases, and certified lists of subcontractors that FT deems necessary. Unless otherwise specified on the face of the FT purchase order, FT shall pay the invoiced amount within sixty (60) days after receipt of a correct invoice. Payment is made when FT's check is mailed. Seller will receive no royalty or other remuneration on the production or distribution of any products developed by FT or Seller in connection with or based on the Goods or Services provided. All Seller claims for money due or to become due from FT shall be subject to deduction, setoff or withholding by FT, at FT’s sole discretion, for any counterclaim arising out of this or any other transaction between FT and Seller, or any amounts necessary to satisfy any claims or threatened claims against FT or any liens or threatened liens related to Seller’s performance hereunder or any other transaction between FT and Seller.

5. WARRANTIES. Seller expressly warrants that all Goods or Services provided under this order shall be merchantable, free from defects in material and workmanship, of the highest quality, and shall conform to all applicable specifications and appropriate standards. If Seller knows or has reason to know the particular purpose for which FT intends to use the Goods or Services, Seller warrants that such Goods or Services shall be fit for such particular purpose. Seller further warrants that the Goods are wholly new and contain new components and parts throughout and that Seller has good and warrantable title to the Goods. Seller shall indemnify and hold FT harmless for all damages arising out of any breach of these warranties. Seller shall extend all Goods and Services warranties it receives from its vendors to FT, and to FT’s customers. All Goods and Services warranties by Seller shall run both to FT and to FT’s customers. Breach of these warranties, or any other term of the Agreement, shall entitle FT to all available remedies, including, without limitation, those contained in the Illinois Uniform Commercial Code.

6. INSPECTION. FT shall have a reasonable time after receipt of Goods or Service deliverables and before payment to inspect them for conformity hereto, and Goods received prior to inspection shall not be deemed accepted until FT has run an adequate test to determine whether the Goods conform to the specifications hereof. Use of a portion of the Goods for the purpose of testing shall not constitute an acceptance of the Goods. If Goods tendered do not wholly conform with the provisions hereof, FT shall have the right to reject such Goods. Nonconforming Goods will be returned to Seller freight collect and risk of loss will pass to Seller upon FT’s delivery to the common carrier.

7. INDEPENDENT CONTRACTOR. Seller is an independent contractor for all purposes, without express or implied authority to bind FT by contract or otherwise. Neither Seller nor its employees, agents or subcontractors (“Seller’s Assistants”) are agents or employees of FT, and therefore are not entitled to any employee benefits of FT, including but not limited to, any type of insurance. Seller shall be responsible for all costs and expenses incident to performing its obligations under this Agreement and shall provide Seller's own supplies and equipment.

8. INSURANCE. Seller shall be solely responsible for maintaining and requiring Seller’s Assistants to maintain such adequate health, auto, workers' compensation, unemployment compensation, disability, liability, and other insurance, as is required by law or as is the common practice in Seller's and Seller's Assistants' trades or businesses, whichever affords greater coverage. Upon request, Seller shall provide FT with certificates of insurance or evidence of coverage before commencing performance under this Agreement. Seller shall provide adequate coverage for any FT property under the care, custody or control of Seller or Seller's Assistants.

9.  INDEMNITY. Seller shall indemnify, hold harmless, and at FT's request, defend FT, its officers, directors, customers, agents and employees, against all claims, liabilities, damages, losses and expenses, including attorneys' fees and cost of suit arising out of or in any way connected with the Goods or Services provided under this Agreement, including, without limitation, (i) any claim based on the death or bodily injury to any person, destruction or damage to property, or contamination of the environment and any associated clean up costs, (ii) Seller failing to satisfy the Internal Revenue Service’s guidelines for an independent contractor, (iii) any claim based on the negligence, omissions or willful misconduct of Seller or any Seller’s Assistants, and (iv) any claim by a third party against FT alleging that the Goods or Services, the results of such Services, or any other products or processes provided under this Agreement, infringe a patent, copyright, trademark, trade secret or other proprietary right of a third party, whether such are provided alone or in combination with other products, software or processes. Seller shall not settle any such suit or claim without FT's prior written approval. Seller agrees to pay or reimburse all costs that may be incurred by FT in enforcing this indemnity, including attorneys' fees.
Should FT’s use, or use by its distributors, subcontractors or customers, of any Goods or Services purchased from Seller be enjoined, be threatened by injunction, or be the subject of any legal proceeding, Seller shall, at its sole cost and expense, either (a) substitute fully equivalent non-infringing Goods or Services; (b) modify the Goods or Services so that they no longer infringe but remain fully equivalent in functionality; (c) obtain for FT, its distributors, subcontractors and customers, as applicable, the right to continue using the Goods or Services; or (d) if none of the foregoing is possible, refund all amounts paid for the infringing Goods or Services.

10. CONFIDENTIALITY. Seller will acquire knowledge of FT Confidential Information (as defined below) in connection with its performance hereunder and agrees to keep such FT Confidential Information in confidence during and following termination or expiration of this Agreement. “FT Confidential Information” includes but is not limited to all information, whether written or oral, in any form, including without limitation, information relating to the research, development, products, methods of manufacture, trade secrets, business plans, customers, vendors, finances, personnel data, Work Product (as defined herein) and other material or information considered proprietary by FT relating to the current or anticipated business or affairs of FT which is disclosed directly or indirectly to Seller. In addition, FT Confidential Information means any third party's proprietary or confidential information disclosed to Seller in the course of Seller providing Services or Goods to FT. FT Confidential Information does not include any information (i) which Seller lawfully knew without restriction on disclosure before FT disclosed it to Seller, (ii) which is now or becomes publicly known through no wrongful act or failure to act of Seller, (iii) which Seller developed independently without use of the FT Confidential Information, as evidenced by appropriate documentation, or (iv) which is hereafter lawfully furnished to Seller by a third party as a matter of right and without restriction on disclosure. In addition, Seller may disclose Confidential Information which is required to be disclosed pursuant to a requirement of a government agency or law so long as Seller provides prompt notice to FT of such requirement prior to disclosure and cooperates fully with FT in protecting against any such disclosure and/or obtaining a protective order narrowing the scope of the compelled disclosure and protecting its confidentiality.
Seller agrees not to copy, alter or directly or indirectly disclose any FT Confidential Information. Additionally, Seller agrees to limit its internal distribution of FT Confidential Information to Seller's Assistants who have a need to know, and to take steps to ensure that the dissemination is so limited, including the execution by Seller's Assistants of nondisclosure agreements with provisions substantially similar to those set forth herein. In no event will Seller use less than the degree of care and means that it uses to protect its own information of like kind, but in any event not less than reasonable care to prevent the unauthorized use of FT Confidential Information.
Seller further agrees not to use the FT Confidential Information except in the course of performing hereunder and will not use such FT Confidential Information for its own benefit or for the benefit of any third party. The mingling of the FT Confidential Information with information of Seller shall not affect the confidential nature or ownership of the same as stated hereunder. Seller agrees not to design or manufacture any products which incorporate FT Confidential Information. All FT Confidential Information is and shall remain the property of FT. Upon FT's written request or the termination of this Agreement, Seller shall return, transfer or assign to FT all FT Confidential Information, including all Work Product, as defined herein, and all copies thereof.

11. OWNERSHIP OF WORK PRODUCT. For purposes of this Agreement, “Work Product” shall include, without limitation, all designs, discoveries, creations, works, devices, masks, models, work in progress, Service deliverables, inventions, products, computer programs, procedures, improvements, developments, drawings, notes, documents, information and materials made, conceived or developed by Seller alone or with others which result from or relate to the Services performed hereunder. Standard Goods manufactured by Seller and sold to FT without having been designed, customized or modified for FT do not constitute Work Product. All Work Product shall at all times be and remain the sole and exclusive property of FT. Seller hereby agrees to irrevocably assign and transfer to FT and does hereby assign and transfer to FT all of its worldwide right, title and interest in and to the Work Product including all associated intellectual property rights. FT will have the sole right to determine the treatment of any Work Product, including the right to keep it as trade secret, execute and file patent applications on it, to use and disclose it without prior patent application, to file registrations for copyright or trademark in its own name or to follow any other procedure that FT deems appropriate. Seller agrees: (a) to disclose promptly in writing to FT all Work Product in its possession; (b) to assist FT in every reasonable way, at FT's expense, to secure, perfect, register, apply for, maintain, and defend for FT's benefit all copyrights, patent rights, mask work rights, trade secret rights, and all other proprietary rights or statutory protections in and to the Work Product in FT’s name as it deems appropriate; and (c) to otherwise treat all Work Product as FT Confidential Information as described above. These obligations to disclose, assist, execute and keep confidential survive the expiration or termination of this Agreement. All tools and equipment supplied by FT to Seller shall remain the sole property of FT.
Seller will ensure that Seller's Assistants appropriately waive any and all claims and assign to FT any and all rights or any interests in any Work Product or original works created in connection with this Agreement. Seller irrevocably agrees not to assert against FT or its direct or indirect customers, assignees or licensees any claim of any intellectual property rights of Seller affecting the Work Product.
FT will not have rights to any works conceived or reduced to practice by Seller which were developed entirely on Seller's own time without using equipment, supplies, facilities or trade secret or FT Confidential Information, unless (i) such works relate to FT's business, or FT's actual or demonstrably anticipated research or development, or (ii) such works result from any Services performed by Seller for FT.

12. TERMINATION. FT may terminate this Agreement upon written notice to Seller if Seller fails to perform or otherwise breaches this Agreement, files a petition in bankruptcy, becomes insolvent, or dissolves. In the event of such termination, FT shall pay Seller for the portion of the Services satisfactorily performed and those conforming Goods delivered to FT through the date of termination, less appropriate offsets of FT including, without limitation, any additional costs to be incurred by FT in completing the Services or acquiring from another supplier conforming Goods or substitute goods for the Goods.
FT may terminate this Agreement for any other reason or for its convenience upon thirty (30) days' written notice to Seller. Seller shall cease to perform Services and/or provide Goods under this Agreement on the date of termination specified in such notice. In the event of such termination, FT shall be liable to Seller only for those Services satisfactorily performed and those conforming Goods delivered to FT through the date of termination, less appropriate offsets.
Upon the expiration or termination of this Agreement for any reason Seller will promptly notify FT of all FT Confidential Information or any Work Product in Seller’s possession and, at the expense of Seller and in accordance with FT’s instructions, will promptly deliver to FT all such FT Confidential Information and/or Work Product.

13. REMEDIES. If Seller breaches this Agreement, FT shall have all remedies available under the Agreement, at law and in equity. For the purchase of Goods, Seller’s sole remedy in the event of breach of this Agreement by FT shall be the right to recover damages in the amount equal to the difference between market price at the time of breach and the purchase price specified in the Agreement. No alternate method of measuring damages shall apply to any transaction(s) contemplated by this Agreement. Seller shall have no right to resell Goods for FT’s account in the event of wrongful rejection, revocation of acceptance, failure to make payment or repudiation by FT and any resale so made shall be for the account of Seller.

14. FORCE MAJEURE. FT shall not be liable for any failure to perform including failure to (i) accept performance of Services or, (ii) take delivery of the Goods as provided caused by circumstances beyond its control which make such performance commercially impractical including, but not limited to, acts of God, fire, flood, acts of war, government action, accident, labor difficulties or shortage, inability to obtain materials, equipment or transportation. In the event FT is so excused, either party may terminate the Agreement and FT shall at its expense and risk, return any Goods received to the place of shipment.

15. SEVERABILITY; ASSIGNMENT; WAIVER; NONEXCLUSIVE AGREEMENT. If any provision of this Agreement shall be deemed to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Seller may not assign this Agreement or any of its rights or obligations under this Agreement, without the prior written consent of FT. Any assignment or transfer without such written consent shall be null and void. A waiver of any default hereunder or of any term or condition of this Agreement shall not be deemed to be a continuing waiver or a waiver of any other default or any other term or condition. This is not an exclusive agreement. FT is free to engage others to perform Services or provide Goods the same as or similar to Seller's. Seller is free to provide Seller's Services and/or Goods to others; provided however, that Seller does not breach this Agreement.


17. NOTICES. Except for FT purchase orders which may be sent by local mail, facsimile transmission, or electronically transmitted,, all notices, and other communications hereunder shall be in writing, and shall be addressed to Seller or to an authorized FT representative, and shall be considered given when (a) delivered personally, (b) sent by confirmed telex or facsimile, (c) sent by commercial overnight courier with written verification receipt, or (d) three (3) days after having been sent, postage prepaid, by first class or certified mail.

18. GOVERNING LAW. This Agreement’s execution and performance and any disputes arising out of it shall be construed in accordance with the laws of the State of Illinois, excluding its conflict of law rules. A state or federal court in northern Illinois shall have jurisdiction and venue over all controversies arising out of, or relating to, this Agreement. The applicability of the UN Convention on Contracts for the International Sale of Goods is hereby expressly waived by the parties and it shall not apply to the terms and conditions of this Agreement.

19. ENTIRE AGREEMENT; MODIFICATION; SURVIVAL. This Agreement is the complete, final and exclusive statement of the terms of the agreement between the parties and supersedes any and all other prior and contemporaneous negotiations and agreements, whether oral or written, between them relating to the subject matter hereof. This Agreement may not be added to, modified, superseded or otherwise altered, except by a written amendment expressly identified as an amendment to the Agreement signed by an authorized FT representative. Any obligations and duties which by their nature extend beyond the expiration or termination of this Agreement shall survive the expiration or termination of this Agreement.

20.1 General: Seller warrants that all Goods and Services supplied pursuant to this Agreement will have been produced and supplied in compliance all applicable federal, state and local laws, orders, rules and regulations including, but not limited to, all applicable employment, tax, export control, Occupational Safety and Health Act of 1970, and environmental laws, orders, rules and regulations. Seller certifies compliance with the Fair Labor Standards Act of 1938, as amended, and the Walsh-Healy Act. Seller shall indemnify FT against any claim or liability on account of any non-compliance.
20.2 Equal Employment Opportunity: FT is a government contractor and is subject to the requirements of Executive Order 11246, the Rehabilitation Assistance Act. Pursuant to these requirements, the Equal Opportunity Clauses found at 41 Code of Federal Regulations sections 60-1.4(a) (1-7), 60-250.4(a-m) and 60-741.5 (a) (1-6) are incorporated herein by reference as though set forth at length, and made an express part of this Agreement. If applicable, Seller will comply with the following Federal Acquisition Regulations: (i) 52.222-26 “Equal Opportunity”, (ii) 52.222-35 “Affirmative Action for Special Disabled and Vietnam Veterans”, and (iii) 52.222-36 “Affirmative Action for Handicapped Workers.” Seller warrants that it has submitted Standard Form 100 (EEO-1) compliance reports as required by 41 C.F.R. 60-1.7 as implemented by FAR 52.222-22.
20.3 Small Business Development: This Agreement incorporates by reference all provisions of FAR 52.219-8 and FAR 52.219-9 as they pertain to utilization of small business concerns and small disadvantaged business concerns and small business and small disadvantaged business subcontracting plans. Seller agrees to comply with any and all applicable State and local government small business utilization laws including any and all applicable statutes, rules, regulations, ordinances, orders and other guidelines promulgated by any such governmental entity.
20.4 Hazardous Materials: If Goods include hazardous materials Seller represents and warrants that Seller understands the nature of any hazards associated with the manufacture, handling and transportation of such hazardous materials. All chemicals supplied by Seller under this Agreement shall be accompanied with a Material Safety Data Sheet provided by the chemical supplier/manufacturer. All chemical suppliers certify by acceptance of this Agreement that the chemicals supplied are on the Toxic Substances Control Act, 15 U.S.C.S. §2601, et.seq., chemical inventory or are subject to an exemption and that such exemption is specified in the Material Safety Data Sheet.
20.5 Customs: Upon FT’s request, Seller will promptly provide FT with a statement of origin for all Goods and United States Customs documentation for Goods wholly or partially manufactured outside of the United States.



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