My company sells a batch of goods to a regular customer in Denmark. The products are used for a project of Danish customers in Japan. We are ready to ship the goods. But the customer suddenly suggests that the end-user need us to provide a subcontractor warranty. Otherwise, the end-user will refuse to use our products. We have reviewed the warranty, which is similar to the terms of the contract we signed with our Danish client. But we think it strange. We have no direct contractual relationship with the end-users. And there seems to be no need to provide them with a warranty. So, I would like to ask about this so-called subcontractor warranty.
In some large projects, after signing the contract, the owner allows the general contractor to use the subcontractor. However, in order to protect his interests, the owner will require the information of all subcontractors. Also, he will request them to provide a warranty to the owner. In this way, it is possible to avoid the use of harmful materials by the general contractor and the subcontractor to control the quality of parts.
The subcontractor provides the warranty to the owner, guaranteeing the responsibility of him, such as the delivery of the goods on time. If the subcontractor fails to do so, the owner has the right to claim directly from him. There is no direct contact or contractual relationship between the subcontractor and the owner. So, generally, the general contractor will arrange them to sign an agreement after coordination. Only after receiving the subcontractor warranty can the owner approve this part of the subcontract agreement.
For my experience, the subcontractor warranty is relatively common in international engineering projects. If the content of it is included in the contract between the general contractor and the subcontractor, it should be acceptable.
As a subcontractor, if the content of the warranty is within the scope that you should and can bear, even if you have no direct contractual relationship with the owner, you can sign it. If it exceeds the scope of the general contract and even increases the additional risks and responsibilities of you, you should notify the general contractor to handle this matter. Try not to conflict directly with the owner. After all, there is a contractual relationship between the owner and the general contractor. And they share more interests.
In addition, this is also an opportunity for you. If you sign such a warranty with the owner, it will be beneficial for the owner to contact you and purchase some equipment or parts directly in the future.
For the general contractor, he must get the support and cooperation of the subcontractor. Only when you agree to sign or provide such a guarantee can he successfully execute his general contract.
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