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OEM customer lawsuit

Views: 594


STx

#80605

OEM customer lawsuit | 26 June, 2018

We are a very small EMS that has been sued by a large OEM customer. We built a board, it passed the customer supplied tester, but we had accidentally put a wrong part on it. This was discovered years after we had been placing this part. The customer blamed us for their losses from their customer. The customer admits that board design is flaky- but all we know is if it passes the tester or not.

Our view is that we delivered a board that worked per the customer specification. The only way we would know we were making a mistake is for the customer test system to tell us which it did not.

If an OEM "gets away" with this, all EMS manufacturers would be at risk.

Is there a legal advocacy group for small job shops?

-Robert Applebaum

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dwl

#80618

OEM customer lawsuit | 28 June, 2018

A few questions:

How did you put the wrong part on for so many years and not catch it? Was this due to an error in the customer supplied data like an incorrect BoM or an internal error such as a P&P machine programming error?

How wrong was the wrong part? Meaning, was it something like a wrong voltage or tolerance on a capacitor, or using a commercial grade part instead of an equivalent industrial grad part?

What is stipulated in your contract with your customer? A good contract should have liabilities and responsibilities of both parties clearly defined. In cases of ambiguity, the burden of proof tends to fall on the OEM, giving the little guy some advantage. Keep in mind I am NOT a lawyer.

For Legal Advocacy (I am assuming you are in the USA) you could check with your State Bar association, or your States Attorney Generals office. They may be able to point you in the right direction.

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STx

#80621

OEM customer lawsuit | 28 June, 2018

thank you for the reply it was our error- there was a change notice via a spreadheet in a resistor value; the operator used the old reel/old value.

Customer did not pay for AOI. Customer supplied tester passed all the boards, even with the wrong (unchanged) resister value.

will check out your suggestion on bar assoc and State AG thank you.

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