Terms of sale and warranty — draft for review¶

Status: proposal — awaiting decision, 2026-09-14. Written for task 89. Not legal advice — I am not a lawyer. This is a plain-English draft built from what the shop actually sells and how it actually works, for an attorney to review before it is put in front of a customer. The parts most worth a lawyer's hour are marked.

The recommendation, before the text¶

One warranty length is the wrong shape for this shop, because three different things are sold and the risk is not the same:

What is sold	Who designed it	Sensible warranty
Our own products (the tester, anything with our name on it)	us	1 year, materials and workmanship — what Angel wants, and it is the normal expectation
Assembly of a customer's design	the customer	90 days, workmanship only — we did not choose the parts or the circuit, and warranting somebody else's design is taking a risk we cannot price
Design, firmware and software services	us	90 days to re-perform, not a money-back guarantee — the deliverable is work, and the remedy is fixing it

That split is the whole idea. A single blanket "one year on everything" would quietly promise that a customer's own design will work for a year, which is not a promise this shop can keep and not one any contract manufacturer makes.

Cap liability at what they paid. For a two-person shop this is the clause that matters most. A $4,000 assembly job that ends up in a product that fails in the field can generate a claim far larger than the job — the cap is what stands between that and the business.

Draft: Terms of Sale¶

1. These terms. These terms apply to every quotation, order and invoice from EmbeddedEra LLC ("we", "us"), a North Carolina limited liability company, unless we have signed a separate agreement that says otherwise. A purchase order that adds or changes terms does not change these unless we agree in writing.

2. Quotes. A quote is valid for 30 days. It is based on the information and files supplied at the time; if the design, quantity or parts change, the price and lead time change with them.

3. Prices and currency. All prices are in US dollars and exclude shipping, duties and tax. North Carolina sales tax is added where it applies; a customer claiming exemption must provide a valid certificate before invoicing.

4. Payment. Net 30 from the invoice date for approved accounts; otherwise payment before shipment. New customers and orders over an agreed threshold require a deposit. We may pause work on a past-due account.

5. Lead times. Lead times are estimates made in good faith, not guarantees, and depend on component availability. We will tell you promptly when a date moves.

6. Customer-supplied material. Parts, panels, files and firmware supplied by the customer are the customer's responsibility: we inspect on receipt for count and obvious damage, not for suitability or authenticity. We are not liable for defects traceable to customer-supplied material or to a defect in a customer's own design.

7. Acceptance. Goods are deemed accepted 14 days after delivery unless a defect is reported in writing before then. Report shipping damage within 3 business days.

8. Title and risk. Title and risk pass on delivery to the carrier. Title to goods does not pass until payment is received in full.

9. Intellectual property. The customer owns the design deliverables we create for them on full payment. We keep our pre-existing tools, libraries, templates and know-how, and may reuse general knowledge gained. We do not use a customer's confidential design in another customer's product.

10. Changes and cancellation. A cancelled order is charged for work completed and for materials already ordered or committed, which for electronic components is frequently non-returnable.

11. Export and end use. The customer confirms the goods are not destined for a prohibited party or end use, and is responsible for any export licence their own shipment requires.

12. Governing law. North Carolina, and the courts of Wake County.

Draft: Limited Warranty¶

What is covered

Products of our own design, sold under our name: one (1) year from delivery against defects in materials and workmanship.
Assemblies built to a customer's design: ninety (90) days from delivery, for our workmanship only — soldering, placement, assembly and the tests we agreed to run. The design itself, and parts the customer specified or supplied, are not covered.
Design, firmware and software services: ninety (90) days from delivery, during which we will correct work that does not meet the agreed written specification.
Rework or repair we perform: 90 days on that work, or the remainder of the original warranty, whichever is longer.

What is not covered

Misuse, accident, neglect, liquid, static discharge or electrical stress after delivery; modification or repair by anyone else; operation outside the published ratings; normal wear; consumables and batteries; damage in shipping once risk has passed; a defect in a design we did not create; parts the customer supplied; and firmware or software the customer altered.

What we will do. At our option: repair it, replace it, or refund what was paid for the affected item. That is the sole and exclusive remedy. Warranty work requires an RMA number obtained before returning anything — how that works is SOP-014 Returns and Repairs. Return shipping to us is the customer's; we pay the return leg on a valid claim.

The legal parts (the clauses an attorney should look at first)

EXCEPT AS STATED ABOVE, WE DISCLAIM ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

WE ARE NOT LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS, LOST DATA, RECALL COSTS, OR THE COST OF REMOVING OR REINSTALLING A PRODUCT.

OUR TOTAL LIABILITY FOR ANY CLAIM IS LIMITED TO THE AMOUNT PAID FOR THE GOODS OR SERVICES GIVING RISE TO IT.

Not for critical use. Our products and assemblies are not designed or tested for use where a failure could cause injury or death — life support, aviation, nuclear, or safety-critical control. Using them that way is at the customer's own risk.

When the product is ours¶

The draft above assumes the usual shape: a customer pays for development and owns what we made for them. Angel asked about the opposite — we fund and own the product, and other companies sell it. That is a different deal, and clause 9 as written would sign the IP away by default, so the terms have to say which kind of engagement each order is.

The quote decides it. Every quote states one of three engagement types, and the terms then follow from it:

Type	Who owns the design	How we get paid
Custom development	the customer, on full payment	NRE and hourly, as today
Our product, their name (OEM / white-label)	us	we sell them units at a wholesale price
Licensed design	us, licensed to them	a licence fee and/or a per-unit royalty

The recommendation: own it and sell units¶

For a two-person shop, OEM supply beats licensing, and the reason is enforcement rather than margin. A royalty depends on somebody else honestly reporting how many they built, and the remedy when they do not is an audit and a lawyer — neither of which is realistic here. Selling units means the money arrives because we shipped something. Nobody has to be audited and nothing has to be litigated.

Licensing is worth it in exactly one case: a partner with real manufacturing volume, where building the units ourselves is the bottleneck. Then the licence should carry a minimum annual payment, so it is not worth nothing if they lose interest.

What such an agreement has to say¶

Background versus foreground IP. What we brought (libraries, blocks, the tester platform, know-how) stays ours whatever else is agreed. This one line prevents the argument.
Exclusivity is sold, never given. If a partner wants to be the only one, it costs money, it expires, and it is conditional on minimum volumes — miss them and it becomes non-exclusive automatically, without a negotiation.
Field and territory. Exclusive for garden equipment in North America is a deal. Exclusive for everything, everywhere, forever is a giveaway.
Pricing and price changes. Wholesale tiers by volume, and the right to pass on component price rises with notice — parts move, and a fixed price for five years is a slow loss.
Tooling and fixtures. If they paid for a test fixture, say who owns it. If we paid, say it is ours. This is argued about at the end of every relationship.
Branding. They may put their name on it; they do not acquire ours, and they may not claim to have designed it.
Warranty flow-down. Our warranty runs to the partner, not to their end customer. They handle their own customers; we back the units.
Termination and last-time buy. How it ends, how much notice, and their right to a final order. Also who supports units already in the field, and for how long.
Indemnity, both directions. We stand behind our design not infringing; they stand behind the specification and branding they gave us.

What changes in the terms above¶

Clause 9 becomes conditional rather than absolute:

9. Intellectual property. Ownership depends on the engagement type stated in the quote. For custom development, the customer owns the design deliverables created for them on full payment. For our own products supplied under a customer's brand, and for licensed designs, the design, firmware and documentation remain ours and the customer receives only the rights the quote or licence grants. In every case we keep our pre-existing tools, libraries, templates and know-how, and may reuse general knowledge gained. We do not use a customer's confidential design in another customer's product.

A decision is needed: which type is the default when a quote forgets to say. It should be custom development — the least surprising to a customer, and the one where the shop has already been paid for the work. But it means the quote template must make the engagement type a required field, or an "our product" deal could be given away by a silent quote.

Before this goes live¶

An attorney reads it, particularly the disclaimer, the liability cap and the critical-use clause. In many states an implied-warranty disclaimer must be conspicuous to be effective, which is why those paragraphs are set apart — a lawyer should confirm the form is right for North Carolina.
Product liability insurance is in place (task 88). The cap protects against contract claims; it does not protect against someone injured by a product. Insurance does.
It is published and referenced — in the right places, for different reasons. A warranty nobody was shown is hard to enforce, and terms first seen on an invoice arrive after the contract already exists. So:

Document	Why it carries the terms	What it says
Quote / proposal	this is where the deal is formed — terms must be part of the offer	"Subject to EmbeddedEra Terms of Sale v1.0 (embeddedera.com/terms). Engagement type: custom development / our product under your brand / licensed design."
Order acknowledgement	the customer's PO may carry their own terms; ours have to be restated on acceptance or theirs may win	same line, plus "Our terms govern; terms on your purchase order that add to or differ from them are not accepted."
Invoice	too late to introduce terms, right place to record them and start the clock	the terms line, and "Warranty runs from the delivery date shown."
Packing slip	what the person unboxing actually reads	"Report shipping damage within 3 business days. Warranty claims need an RMA number first — email …" (SOP-014)
The website	the reference everything above points at	`/terms/` with the version and effective date, and every previous version kept reachable — a customer is bound by the version in force when they ordered, so an old quote must still resolve to the terms it named

These are InvenTree report templates (SOP-007 Sales Orders and Invoicing lists them), so it is a footer line in each, not new documents. The proposal template also gains the engagement-type field (task 173). 4. Decide the deposit threshold in clause 4, and the sales-tax wording in clause 3 after the CPA hour. 5. Make engagement type a required field on the quote template, and decide the default. Without that, clause 9 has nothing to key off and a product we own could be signed away by a quote that simply did not mention it.

Related: embeddedera-business, bookkeeping, SOP-014 Returns and Repairs.

Log¶

2026-09-14: drafted.