Special Terms Annex: Terms of Financial Reconciliation for Fulfilment Services

These Special Terms Annex Terms form a supplementary set of conditions to those identified here: General Primis Terms of Use and are expressly linked to those Special Terms covering Fulfilment Services.

  1. Purpose And Interpretation

1.1 Structure: This Annex sets forth the financial consequences, cost recovery mechanisms, and pricing adjustments related to operational variances, forecast inaccuracies, and missed dependencies.

1.2 Relationship to Fulfilment Service Special Terms: This Annex is intended to function as a standalone definition of cost recovery logic covering the scope of Fulfilment Services provided to the Company. All other terms relating to rates, volume thresholds, cap limits, and specific monetary values are as found within the Special Terms covering Fulfilment Services. 

1.3 Acknowledgment of Cost Impact: The Parties acknowledge and agree that the non-compliance charges set forth in this Annex represent a genuine pre-estimate of the additional operational and administrative costs that Primis will incur as a result of the Company’s failure to adhere to the agreed processes. The Company agrees that these charges are compensatory in nature and do not constitute a penalty.

1.4 Legitimate Commercial Interest: The Company acknowledges that the Rates provided by Primis are predicated on specific volume assumptions that drive economies of scale. Consequently, Primis has a legitimate commercial interest in; (a) Recovering fixed costs and sunk resource investments in the event of volume shortfalls (reduced economies of scale); (b) Protecting the operational integrity of the facility against unforecasted surges; and (c) deterring inefficiencies that disrupt Primis’ broader network.

1.5 Proportionality: The parties agree that the financial mechanisms contained herein are proportionate to the protection of Primis’ legitimate commercial interests and are not extravagant or unconscionable in comparison with the greatest loss that could conceivably prove to have followed from the breach or variance.

  1. Definitions

Capitalised terms used in these Special Terms and not otherwise defined shall have the meaning given to them in the General Terms of Use and/or those Special Terms specifically relating to the provision of Fulfilment Services:

Actual Volume means the actual quantity of Units handled, Orders processed, or storage utilised during a specific Measurement Period.

Dependency means any material, data, instruction, or action required from the Company to enable Primis to perform the Services.

Forecast means the written projection of volume requirements provided by the Company to Primis prior to entering into the Agreement and upon which the Rates are based.

Fulfilment Services means those services provided to the Company under those Special Terms found embedded within the General Terms of Use.

Materiality Threshold means the allowable margin of error (variance) within which no additional charges apply, which for the purposes of this defined term shall be +/-10%.

Measurement Period means the timeframe over which performance is calculated (e.g., Monthly or Quarterly) as relayed to the Company by Primis.

Overages refer to utilisation of resources (including but not limited to pallet positions, bin locations, IT server calls, or administrative hours) as a result of Actual Volumes being in excess of Forecast + Materiality Threshold.

  1. Forecast Reliance And True-Up Mechanism

3.1 Reliance on Forecasts: The Company acknowledges that Primis and the Third-Party Provider establishes pricing, schedules labour, and reserves facility capacity based on the Company’s Forecast. Consequently, Primis reserves the right to rely on the accuracy of such Forecasts for financial planning.

3.2 True-Up Reconciliation: At the conclusion of each Measurement Period (or as otherwise agreed in the Special Terms), Primis shall perform a True-Up calculation to reconcile Actual Volume against the Forecast.  The process for this is as referenced below:

3.2.1 Forecast Inaccuracy Charge: If the Actual Volume deviates from the Forecast beyond the Materiality Threshold, Primis reserves the right to apply a Forecast Inaccuracy Charge as calculated below:

3.2.1.1 Calculation: The charge shall be calculated based on the difference between Forecast and Actuals. The Formula will be: Charge = [(Forecast – Actual) – Materiality Threshold] x Rate x 30%]

Example: ((Forecast: 20,000 – Actual: 14,000) – Materiality Threshold Allowance: 2,000))(=4,000) x Unit Rate: £2.00 x 30% = £2,400.

3.4 Pricing Adjustment Rights: In the event of consistent forecast inaccuracies (defined as deviations exceeding the Materiality Threshold for three (3) consecutive Measurement Periods), Primis reserves the right to revise the Rates applicable to the Fulfilment Services to Actuals.

  1. Volume Variances (Surge And Shortfall)

4.1 Surge Surcharges (High Volume): If Actual Volume exceeds the Forecast, or actual stock sent to the premises exceeds the SKU numbers shared, by 20%:

4.1.1 Surcharge: Primis shall use reasonable efforts to fulfill the excess volume (Surge Volume). However, Surge Volume shall be subject to an Overage Rate of +20% to cover overtime labor and operational strain; and

4.1.2 Service Level Relief: Primis shall be relieved from any Service Level Agreements (SLAs) during the period of Surge Volume.

4.2 Rate Adjustment Right for Shortfall: The Rates offered are for projected volumes as shared by the Company. In the event of a short fall of the projected volume of 20% for two (2) consecutive months, Primis has the right to adjust the Rates with five (5) business days prior written notice.

  1. Overages

5.1 Overage Charges: Any Overage shall be calculated at 150% of the standard Rates. Primis, and the Third-Party Provider, reserves the right to refuse Overages if such usage endangers the safety of the facility or the service quality of other companies.

  1. Missed Dependencies

6.1 Obligations: Primis’ ability to meet SLAs and pricing commitments is contingent upon the Company meeting its Dependencies (e.g., timely delivery of stock, accurate master data, compliant packaging).

6.2 Financial Consequence of Missed Dependencies: In the event of a missed Dependency:

6.2.1 Idle Time Charges: The Company shall reimburse Primis for any labour or resources that were scheduled but rendered idle due to the missed Dependency (billed at Primis’ standard hourly labour rates).

6.2.2 SLA Voidance: All SLAs for the affected period are automatically voided.

6.2.3 Rescheduling Fee: Primis may charge an administrative fee for rescheduling the workflow which will be relayed to the Company.

  1. Additional Company Non-Compliance Charges

7.1 Out-of-Hours Drop-Offs: The Company will incur an Out-of-Hours Surcharge for any goods delivered to the Premises: (a) outside of a mutually agreed time slot; or (b) outside of the Third-Party Provider’s core operating hours (where no specific slot was agreed). This surcharge covers unscheduled labour and facility opening costs.  Where an out-of-hours drop-off cannot be accommodated, the delivery may be rejected. The Company shall be solely responsible for all costs associated with such rejection and any subsequent re-delivery.

7.2. Incomplete Documentation: The Company must provide all necessary, accurate, and complete documentation (e.g., manifest, packing lists) for all incoming deliveries. Primis and the Third-Party Provider reserves the right to levy an Incomplete Documentation Fee for each delivery without appropriate documentation to cover the administrative and operational effort required to process the non-compliant goods.

7.3. Missed Planning Meetings: Should the Company fail to attend or give sufficient notice for scheduled fulfilment planning or operational review meetings, Primis may charge a Missed Meeting Fee of £300 to compensate for Primis’ resources rendered idle.

7.4. Data System Non-Compliance: The Company shall be responsible for the timely and accurate upload of all required data into the designated systems for B2B and B2C forecast and delivery planning. In the event the Company fails to upload the correct data or refuses to use the agreed system, Primis may apply a Data Non-Compliance Charge, the cost of which will be provided via notice, to cover resulting manual efforts and service disruption.

  1. Operational And Protective Provisions

8.1 Invoicing of Charges: All additional Fees considered under this Annex shall be invoiced Quarterly in arrears. Payment terms shall follow the standard payment terms of the General Terms of Use.