OEM Component Supply Agreement · Bosch × [OEM Buyer]

The agreement is a framework supply contract with call-off orders, a quality assurance agreement as an annex, and German law. Because the supplier drafted the terms for repeated use, German courts would treat most clauses as standard business terms subject to the fairness review in § 307 BGB, which also applies between businesses ¹. That review protects the buyer against the most one-sided provisions, but it is no substitute for negotiated redlines on commercial terms.

The three medium items are commercial, not legal: price, capacity and allocation. All three tie back to the counterparty's situation in 2025–2026, when margins were under pressure and chip supply was disrupted ^{10 11}.

The supplier may reprice once a year with 60 days' notice. There is no cap, no link to published indices and no buyer right to verify the cost basis. A clause that lets one party set the price unilaterally without criteria is vulnerable under § 307 BGB ¹, but relying on a later court challenge is a poor commercial position.

The risk is practical. Bosch reported a 2.0% EBIT margin from operations for FY 2025 and states that Chinese competitors now set price levels in automotive ¹¹. Expect the supplier to use this clause.

Redline: replace with a two-way index clause covering named cost drivers (for example semiconductors, copper, aluminium, energy) with a fixed weighting, a 3% annual cap outside those indices, open-book review of any increase above the cap, and a buyer right to resource without penalty if the cap is exceeded.

Buyer forecasts are non-binding, and the supplier makes no capacity commitment. In a constrained market this leaves the buyer with no claim to output if the supplier allocates capacity to larger customers. The supplier is also consolidating German Mobility plants through 2030 ¹¹, which raises the chance of product transfers during the contract term.

Redline: add a capacity reservation equal to 110–115% of the rolling six-month forecast, with the buyer committing to a firm zone (for example four weeks firm, eight weeks material release). Add a notification duty of at least twelve months before any change of producing plant, with requalification at the supplier's cost under the quality assurance agreement and IATF 16949 change-management rules ¹⁴.

The clause excuses non-delivery when sub-suppliers fail, naming semiconductors explicitly. This shifts supply-chain risk to the buyer for events the supplier can partly manage through second sources and buffer stock. The scenario is not theoretical: in late 2025 the Nexperia export dispute forced Bosch to apply for short-time work at its Salzgitter and Ansbach plants and to cut working time at Braga ¹⁰.

Redline: limit force majeure to events outside the supplier's control that could not have been mitigated by reasonable second-sourcing. Add a fair-allocation rule (no worse than pro rata across customers for the affected part), monthly status reporting during any shortage, and a buyer right to terminate the affected part numbers after 90 days of non-supply.

The 24-month period matches the statutory limitation for defect claims in § 438 BGB ⁴. The gap is downstream: vehicle warranties to end customers usually start at vehicle registration, months after component delivery. Under § 445b BGB, recourse claims against a supplier end at the latest five years after the supplier's delivery, which gives room to extend the contractual period ⁵.

Redline (optional): run warranty for 24 months from vehicle first registration, capped at 36 months from delivery to the buyer, and include field-failure analysis under the quality assurance agreement.

Liability is capped at twice the annual contract value, with carve-outs for intent, gross negligence and injury to life, body or health. These carve-outs reflect § 309 no. 7 BGB, whose standards German courts also apply to business contracts through § 307 BGB ^{1 2}. The cap is within the usual range for component supply.

The drafting gap is recall and field-action costs. The clause does not say whether they fall inside the cap. For a safety-relevant component, a recall can exceed two years of contract value.

Redline: state that recall and service-campaign costs attributable to the supplier are recoverable in proportion to its causation share, either outside the cap or under a separate recall sub-cap, and require product-recall insurance with a stated minimum sum.

6. Incoming inspection. The quality assurance agreement limits the buyer's inspection duty under § 377 HGB to identity, quantity and visible transport damage ³. This is buyer-favourable and standard in zero-defect automotive supply. Keep it.

7. Software and product liability. The parts contain embedded software, but the agreement has no obligation to supply security or safety updates. The new EU Product Liability Directive treats software as a product and applies to products placed on the market after December 9, 2026 ⁷. Add an update obligation for the agreed support period and a duty to notify vulnerabilities.

8. Duties and Incoterms. Delivery is FCA supplier plant, so the buyer carries import duties. For buyers re-exporting to the U.S., the EU-US joint statement of August 2025 sets a 15% all-inclusive tariff on EU auto parts ⁹. Add a review clause allowing either party to reopen prices if duties on the parts change by more than five percentage points. The export-control clause is a one-line general compliance statement; given the supplier's June 2026 BIS settlement over unlicensed shipments to Huawei entities ¹⁵, add a classification duty (ECCN and U.S.-content data per part) and mutual end-use screening.

9. Payment. Sixty days net is within the benchmark of Directive 2011/7/EU and § 271a BGB, under which longer terms are valid only if expressly agreed and not grossly unfair to the creditor ^{6 8}. No change needed.

10. Governing law. German law applies, the courts of Stuttgart have jurisdiction, and the UN Sales Convention is excluded. Germany is a CISG contracting state, so the exclusion matters: without it, CISG would apply to cross-border sales by default ¹². Excluding it keeps the contract under the BGB and HGB rules cited above. For a non-EU buyer, a German court judgment may be harder to enforce at home than an arbitral award; consider DIS arbitration seated in Germany, or ICC arbitration in Zurich, as an alternative ¹³.