• Apple's Supplier Contracts Found to Include $50 Million Penalty for any Product Leaks



    As expected, the bankruptcy proceedings of GT Advanced Technologies are revealing details from Apple’s supplier non-disclosure agreements. Court filings made by GT Advanced Technologies have brought to light that Apple imposes a $50 million penalty “per occurrence” for leaking any information about an upcoming and unannounced product. It’s likely that more information can also be brought to light as GTAT’s bankruptcy proceedings carry on.

    In the filing, it was noted that the confidentiality agreement between the two companies is labeled as being “confidential” but that the details need to be disclosed in the interest of creditors, equity holders and other stakeholders in an effort “to ensure an open, transparent and fair process.” The information all started to surface after GTAT pushed for more information about its relationship with Apple to be published. The company even went as far as hinting that many terms in Apple’s contract were unreasonable, referring to them as being “oppressive and burdensome.”

    For those of you who didn’t know, GT Advanced Technologies entered a $578 million deal with Apple a year ago for advanced sapphire supplies. In particular, the scratch resistant material is currently used to protect the Touch ID fingerprint sensor as well as the rear camera lens. As of right now, it is also set to be found on two out of three of the Apple Watch models which are set to be released next year. Despite this, the sapphire manufacturer filed for bankruptcy a week ago with plans to close its plants in both Arizona and Massachusetts which could cost a total of 890 jobs. Apple has said its focusing on preserving the jobs it created but we’ll have to wait and see how things pan out.

    Source: The Financial Times via AppleInsider
    This article was originally published in forum thread: Apple's Supplier Contracts Found to Include $50 Million Penalty for any Product Leaks started by Akshay Masand View original post
    Comments 8 Comments
    1. SpiderManAPV's Avatar
      SpiderManAPV -
      Surely a company that big would have a good enough finance person to tell them to read the contract BEFORE signing it. If you sign a contract and later decide it's too "oppressive" that's your own fault.
    1. exNavy's Avatar
      exNavy -
      Quote Originally Posted by SpidermanAPV View Post
      Surely a company that big would have a good enough finance person to tell them to read the contract BEFORE signing it. If you sign a contract and later decide it's too "oppressive" that's your own fault.
      +1. And if you aren't smart enough to figure this out ahead of time, I would propose that if something looks too good to be true it probably is. There are two free business 101 lessons folks. Can I be the CEO of a company too?
    1. valkraider's Avatar
      valkraider -
      "Apple's Supplier Contracts"

      I think you meant;

      "An Apple Supplier Contract".

      I am pretty sure you dont have more than one supplier contract to reference.

      Also - I agree with others: don't like the contract - don't enter into it...
    1. Raptor2213's Avatar
      Raptor2213 -
      Quote Originally Posted by SpidermanAPV View Post
      Surely a company that big would have a good enough finance person to tell them to read the contract BEFORE signing it. If you sign a contract and later decide it's too "oppressive" that's your own fault.
      My thoughts exactly. If the terms of the contract are "too oppressive", re-negotiate, or don't sign it!
    1. bigboyz's Avatar
      bigboyz -
      Rules of engagement.
    1. znbl's Avatar
      znbl -
      I very much agree with most of the posts here; one should always read and understand any sort of agreement before signing it, whether as an individual or a mega corporation. I couldn't agree more.

      That said, however, when there are so many contracts are are intentionally crafted to be as difficult to read and comprehend as possible, it makes it sometime rather hard to just fault someone for missing some part of it, when that's so often the goal of the issuer of the contract.

      I cannot remember the last time I read a contract that was written in a straight forward and concise manner, that didn't feel like it was intimidated with purposefully confusing and/or misleading "legalese." It's easy to just say "they should have read it" and to assume that they didn't.
    1. SpiderManAPV's Avatar
      SpiderManAPV -
      The difference is that mega corps have people whose job it is to translate legalese into understandable text, while your average layman doesn't. I agree that they take it a bit far sometimes, but that's just how the business works.
    1. PCYoda's Avatar
      PCYoda -
      Unfortunately, large corporations write contracts that many times contain language which is actually unenforceable, if not illegal, under the law (and then forcing users into out-of-court arbitration agreements to lessen the chance of the contract being tested, and making assumptions that the folks on the other end of the contract won't have the money to pursue a legal case against them anyway), and they write them in manners which make it hard to understand or connect the dots on exactly what your rights are or aren't. Just ask your nearest disgruntled ridesharing driver about that...
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