Shopify Fulfillment Network – Terms of Service

Last updated on: October 14, 2020

By accepting the SFN Merchant Order or by using any Fulfillment Services, you are agreeing to be bound by the following terms and conditions (the “SFN Terms of Service”).

As used in the SFN Terms of Service, “we”, “us” and “Shopify” means Shopify Inc., a Canadian corporation with offices located at 151 O’Connor Street, Ground floor, Ottawa, Ontario, Canada, K2P 2L8., and “you”, “your” and “Merchant” means the Merchant identified in the SFN Merchant Order.

Shopify’s fulfillment services program allows select merchants to fulfill their orders through Shopify (the “Fulfillment Services”), as further described below. You agree to access and use such Fulfillment Services pursuant to, and in accordance with the

  1. SFN Terms of Service;
  2. Shopify Terms of Service; and
  3. Merchant Order.

(collectively, the “SFN Agreement”) which shall constitute the entire agreement between the parties with respect to the subject matter stated in the Shopify Contracts and supersedes any and all prior verbal or written agreements with respect to the subject matter.

You can review the current version of the SFN Terms of Service at any time at https://www.shopify.com/legal/fulfillment-us. Shopify reserves the right to update and change the SFN Terms of Service by posting updates and changes to the Shopify website. You are advised to check the SFN Terms of Service from time to time for any updates or changes that may impact you. and if you do not accept such amendments, you must cease using the Services.

You must read, agree with and accept all of the terms and conditions contained or expressly referenced in these SFN Terms of Service, including the Shopify Terms of Service, Shopify’s Acceptable Use Policy and Privacy Policy, and, if applicable, the Shopify API License and Terms of Use and the Shopify Data Processing Addendum before you may use any Fulfillment Service.

1. Definitions

Those capitalized terms not defined within the SFN Agreement, including the SFN Merchant Order, will have the following meanings:

  1. “Affiliate” of an entity means an entity controlling, controlled by, or under common control with such entity.
  2. “Administrative Console” means the Shopify web administrative console associated with your account.
  3. “Authorized Payment Method” means any valid payment method that you authorize Shopify to bill.
  4. “Billing Date” has the meaning set out in Section 6.2
  5. “Confidential Information” has the meaning set out in Section 11.1.
  6. “DDP” means delivered duty paid as defined in the International Chamber of Commerce Terms (Incoterms 2010).
  7. “Effective Date” means the effective date stated in the SFN Merchant Order.
  8. “EXW” means ex works as defined in the International Chamber of Commerce Terms (Incoterms 2010).
  9. “Fees” means the Preparation Fees, Special Project Fees, Storage Fees and Transportation Fees stated in the SFN Merchant Order, and set out in your Administrative Console.
  10. “Fulfillment Locations” means each warehouse location in which FSM has agreed to have Products warehoused.
  11. “Fulfillment Services” has the meaning set out in the recitals.
  12. “Fulfillment Services Manager” or “FSM” means one or more Shopify resources who will provide guidance for Merchant’s Fulfillment Service requirements.
  13. “International Locations” means any mailing address that is not within the fifty states of the United States. Territories of the United States are International Locations.
  14. “Losses” has the meaning set out in Section 9.2.
  15. “SFN Merchant Order” means the order form executed and agreed to by you, and effective as of the Effective Date .
  16. “Preparation Fees” has the meaning set out in the SFN Merchant Order.
  17. “Product” has the meaning set out in Section 2.2.
  18. “Released Parties” has the meaning set out in Section 9.2.
  19. “Releasing Parties” has the meaning set out in Section 9.2.
  20. “Shopify AUP” means the Shopify Acceptable Use Policy set out at https://www.shopify.com/legal/aup.
  21. “Shopify IP” has the meaning set out in Section 2.6.
  22. “Shopify Privacy Policy” means the privacy policy set out at https://www.shopify.com/legal/privacy.
  23. “Shopify Terms of Service” means the terms of service set out at https://www.shopify.com/legal/terms.
  24. “Shrinkage Allowance” has the meaning set out in Section 12.1.
  25. “Special Project Fees” has the meaning set out in the SFN Merchant Order.
  26. “Storage Fees” has the meaning set out in the SFN Merchant Order.
  27. “Store” means your online store or physical retail location registered with Shopify.
  28. “Suggestions” has the meaning set out in Section 14.9.
  29. “Transactional Fees” means the Preparation Fees and Transportation Fees.
  30. “Transportation Fees” has the meaning set out in SFN Merchant Order.

2. Fulfillment Services

  1. Fulfillment Services. During the Term, Shopify shall provide Fulfillment Services to you in respect of orders on Shopify, including those that originate from any sales channel that Shopify supports. Shopify shall perform the Fulfillment Services as selected and authorized by you from your Administrative Console.

  2. Product Approval.

    i. Registration. Following acceptance of the SFN Merchant Order, you must register each product with Shopify that you wish to fulfill and ship using the Fulfillment Services. For each such product that you wish to register with Shopify you must provide Shopify with a full description of the product together with the replacement value of the product and any special product storage, handling or shipping requirements, and you agree to provide any detail to Shopify that Shopify may request in this regard. Each product must be approved by Shopify (once approved, a “Product”) before it is eligible to be fulfilled and shipped using the Fulfillment Services.

    ii. Changes. You may request the addition of new products to the list of Products from time to time during the Term in accordance with Section 2.2(i). You agree that Shopify shall have no obligation to consider or approve new products between the dates of October 1st and December 31st in any calendar year of the Term Shopify must receive at least thirty (30) days prior written notice from you for all registration requests for new products.

    iii. Dimensions. You will correctly describe the weight and dimensions of each Product as well as the Harmonized Sales Tariff Code to Shopify. If a Product’s described weight or dimensions are different from the actual Product, Shopify’s Fee estimates may be inaccurate and, as a result, you will be retroactively invoiced for any difference in cost when the actual shipping price for such Product is incurred by the carrier, including the resulting administrative cost incurred by Shopify for any required corrective measures. Shopify takes no liability for, and will not be responsible for, any cost or expense due to, erroneous Product weight or dimensions, and Shopify will not issue any refund or payment to you for any resulting overpayment of carrier fees. All Transportation Fees quoted by Shopify are estimates. Shopify may edit any Product characteristics, including dimensions and weight, at its sole discretion in order to reflect correct packing requirements.

    iv. Unapproved Changes. Where (a) you provides less than thirty (30) days prior written notice to Shopify for a new product registration request, or (b) Shopify has not approved a product, Shopify is under no obligation to provide Fulfillment Service with respect to such products and Merchant will bear all cost or expense incurred by Shopify to process such products, including Special Project Fees.

  3. Additional Services Provided by Shopify. Shopify will provide you with contact information for dedicated Fulfillment Services Manager(s) that you can contact for Fulfillment Services support.

  4. Fulfillment Services Relationship. You acknowledge and agree that, in addition to providing warehouse and shipping services directly, Shopify is also a broker of third-party warehouse and shipping services. The Fulfillment Service helps you to accept shipments from, and make shipments to, third parties. Shopify is an independent contractor for all purposes where the warehouse and products are provided by third parties. Shopify is acting solely as an agent of the Merchant with respect to the custody of the Products.

  5. Shopify Intellectual Property. Merchant acknowledges and agrees that: (i) the Fulfillment Services, including without limitation any associated software, documentation, applications, websites, tools and products, and any modifications, enhancements and updates thereto, and all intellectual property rights therein (collectively, “Shopify IP”) are exclusively owned by Shopify or our third party providers; (ii) the Shopify IP contains valuable copyrighted material and is protected by Canadian, U.S. and international copyright and other intellectual property laws; (iii) subject to Merchant’s compliance with the Agreement, Shopify grants Merchant a limited, non-exclusive, revocable, non-sublicensable, non-transferable license to access and use the Shopify IP, solely for the purposes of using the Fulfillment Services in compliance with the Agreement; and (iv) Merchant has no rights in the Shopify IP, other than the rights and licenses granted herein.

3. Inbound Product Delivery, Forecast, Variance

  1. Inbound Product Delivery. You will comply with all inbound Product requirements provided by Shopify. If the inbound Product requirements are not met, Shopify may impose Special Project Fees on you and availability of the Fulfillment Services will be delayed. Applicable Special Project Fees will be at least two (2) times the applicable receiving rate. In these circumstances Shopify makes no commitment with respect to timing and availability of the Fulfillment Services, and such services will be delayed by at least ten (10) clear business days.

  2. Freight Delivery by Merchant. You shall deliver the products DDP Fulfillment Location. For the avoidance of doubt, You are responsible for all costs incurred to ship the Products to the Fulfillment Locations (including costs of freight and transit insurance) and Shopify will not pay any cost or expense associated with inbound shipping and receiving, including inbound shipping costs. You are responsible for payment of all customs, duties, taxes, and other changes. Shopify may, at its sole option, allow you to ship Products to the Fulfillment Locations using discounted shipping rates that Shopify makes available to you for certain carriers. If you are using such discounted shipping rates made available by Shopify, you will use the processes and supply the information required by Shopify to offer such discounted shipping rates.

  3. Title and Risk of Loss. Risk of loss of or damage to any Products while at a Fulfillment Location is described below at Section 12 (Shrinkage, Loss and Merchant Insurance), and risk of loss or damage to the product shall pass when you deliver the Product in accordance with Section 3.2 (Freight Delivery by Merchant). Title to the Product shall remain with you at all times except where required by the SFN Agreement, including Section 5.3 (Disposal). If Product is returned then risk of loss or damage for such Product shall pass in accordance with Section 5 (Returns & Disposal). If Product is sent at your request from a Fulfillment Location then risk of loss or damage to a Product shall pass when that Product is made available for pick up by a carrier at a Fulfillment Location.

  4. Forecasting. You will provide a forecast of inbound and outbound Products to Shopify on a regular basis as directed by Shopify (the “Forecast”). Excess orders are those orders that are (a) received by Shopify before 4:00 PM EST on any given day, and are (b) in excess of 120% of the daily Forecast for the date such orders are received (“Excess Order”).

  5. Variance. The Parties agree to measure variance, which is the difference between actual inbound and outbound order volume and Forecast (the “Variance”). Shopify will allow Variance of 80% of order volume up to 120% of order volume when compared to the Forecast. Variance will be calculated daily and billed monthly.

    i. Excess Variance. Variance exceeding 120% of order volume when compared to the Forecast will be fulfilled by Shopify on a best commercial efforts basis and will not have an SLA guarantee.

    ii. Shortfall Variance. Variance less than 80% of order volume when compared to the Forecast will incur a fee equal to the standard preparation rate per order stated in the SFN Merchant Order.

4. Storage

  1. Access to Inventory. Once your Product is accepted to a Fulfillment Location, such Products will no longer be available for inspection, exchange or pickup by you without an outbound shipment including handling fees. You will submit a standard order for shipping if you elect to move your Product to another location, including an alternate Fulfillment Warehouse or any other location. You agree that it is not permitted to visit any Fulfillment Location without Shopify’s prior written approval.

  2. Product Movement. Shopify is permitted to move Products between Fulfillment Locations without your prior approval at Shopify’s sole discretion and expense.

  3. Product Records. Shopify will keep electronic records that track inventory of Products by identifying the number of Products stored in any Fulfillment Location. Shopify is not required to physically mark or segregate Products from other third party products, unless the Parties mutually agree in writing in the SFN Order Form.

5. Returns & Disposal

  1. Returns. You will be responsible for, and will accept, process, and provide refunds and adjustments for, returns of your Products shipped to your customers. Any Products that are returned by a customer shall be delivered EXW Merchant location and not back to a Fulfillment Location. Notwithstanding the foregoing, Shopify may accept Product returns to a Fulfillment Location where (a) the Product was not ordered from an International Location, (b) the Product’s Merchant is registered in the United States, and (c) Shopify has previously expressly approved your requested standard operating procedure for warehouse returns in writing. In the event that a Product is returned by a customer to a Fulfillment Location, you will incur additional Special Project Fees in accordance with the SFN Order Form.

  2. Return to Merchant. You may request at any time, and at your sole cost and expense, (a) that Products be returned to you at your designated shipping address or (b) that Shopify dispose of any Products. Where you request that Products be returned to you, you agree to submit a standard order pursuant to Section 4.1, and such Product return will be sent EXW Merchant location. For the avoidance of doubt, all such Product returns will be at your sole cost and expense including, without limitation, applicable Special Project Fees.

  3. Disposal. Shopify may dispose of any Product that it deems unsuitable, including if Shopify determines in its sole discretion that such Product violates the Shopify AUP (and you will be deemed to have consented to Shopify’s actions): (i) immediately if Shopify determines in its sole discretion that the Product creates a safety, health, or liability risk to Shopify, its personnel, or any third party; (ii) if you do not direct Shopify to return or dispose of any Product within thirty (30) days after Shopify notifies you that the Product has been recalled or is unfit for delivery to a customer; or (iii) if you fail to direct Shopify to return or dispose of any Product within thirty (30) days after Shopify notifies Merchant that Product is being returned. You will reimburse Shopify for any expenses that Shopify incurs in connection with any disposal of Product pursuant to Sections 5.2 or 5.3. Shopify may dispose of any Product that it is entitled to dispose of in any manner that Shopify elects. Title to each disposed Product will transfer to Shopify at no cost to Shopify as necessary for Shopify to dispose of the Product, and Shopify will retain all proceeds, if any, received from the disposal.

6. Fees

  1. Fees. You will pay Shopify the Fees that you incur as set out in the applicable Merchant Order and your Administrative Console, without setoff or deduction.

  2. Billing Schedule. All Fulfillment Service charges incurred under the SFN Agreement are itemized and are viewable in the Billing section of the Billing page in your Administrative Console. The Storage Fees will be charged to you each month on a thirty (30) day cycle (similar to your Shopify subscription charges). If you have incurred any Special Project Fees, or any other similar fees, they will be charged once per month. Transactional Fees will be charged to you from time to time as they accrue, whenever your account reaches the billing threshold. Your applicable billing threshold is set out in your Administrative Console. All Fees under the SFN Agreement will be charged to your Authorized Payment Method.

  3. Applicable Currency. Unless the parties agree otherwise in writing, all Fees and any other charges related to the SFN Agreement will be calculated in U.S. dollars, and all payments shall be made in U.S. dollars.

  4. Taxes. You shall, in addition to the other amounts payable under the SFN Agreement, pay all applicable customs, duties, sales, use, value added or other taxes, federal, state, provincial or otherwise, however designated, which are levied or imposed by reason of the transactions contemplated by the SFN Agreement, excluding only taxes based on Shopify’s net income. You agree to indemnify, defend, and hold Shopify, its officers, directors, consultants, employees, successors and assigns harmless from all claims and liability arising from any failure to report or pay any such taxes, duties or assessments.

  5. Disputed Charges. It is your responsibility to review all invoices for accuracy. Failure to dispute any charge within thirty (30) days of the applicable Billing Date or invoice date, whichever is later, will constitute your agreement that the invoiced Fees and other applicable charges are accepted and valid, and you waive any claims you may have had regarding such Fees or charges.

  6. Unpaid Fees. If Shopify is not able to process payment of Fees using the Authorized Payment Method, Shopify will notify you. If the outstanding Fees remain unpaid for thirty (30) days following the date of suspension, Shopify may terminate the SFN Agreement. Any unpaid Fees (excluding amounts reasonably disputed by you in good faith) will bear interest at the rate of 1.5% per month, or the highest rate permitted by applicable law. You shall pay all reasonable expenses (including attorney’s fees and court costs) incurred by Shopify in collecting unpaid Fees, excluding amounts reasonably disputed by you in good faith.

  7. Fee Changes. The Parties agree that the Fees (a) are subject to change according to the terms stated in the Merchant Order, and (b) may increase from time to time by an amount equal to any increase to Shopify’s input costs for the Fulfillment Services (such as, without exclusion, annual increases to the carrier rates that Shopify receives from third party carriers)

7. Term and Termination

  1. Term. Unless terminated earlier pursuant to the terms and conditions of the SFN Agreement, the SFN Agreement shall commence on the Effective Date and shall remain in force as long as the Merchant Order remains valid (the “Term”).

  2. Termination for Convenience. Shopify may terminate the SFN Agreement at any time during the Term by providing you with at least forty-five (45) days' prior written notice. You may terminate the SFN Agreement at any time after the first anniversary of the Effective Date by providing Shopify with at least one-hundred-and-eighty (180) days’ prior written notice.

  3. Termination. In addition to Shopify’s right to terminate the Services (as defined in the Shopify Terms of Service) pursuant to the Shopify Terms of Service and the Shopify AUP, and the termination rights set out elsewhere in the SFN Terms of Service, including Section 2(b), either party may terminate the SFN Terms of Service upon written notice if the Merchant Agreement is terminated in accordance with its terms or if the other party: (i) assigns or attempts to assign the SFN Terms of Service to a third-party in violation of the SFN Terms of Service; (ii) fails to correct a material breach of its obligations under the SFN Terms of Service within 30 days after receipt of written notification from the notifying party of such material breach; (iii) ceases to carry on business as a going concern; or (iv) initiates a bankruptcy, reorganization or insolvency proceeding, or has such a proceeding initiated against it, makes an assignment for the benefit of creditors, or consents to the appointment of a trustee. For the avoidance of doubt: (a) if the SFN Terms of Service terminates in accordance with its terms, the Shopify Terms of Service will not co-terminate unless the Shopify Terms of Service is also terminated in accordance with terms of the Shopify Terms of Service; and (b) if the Shopify Terms of Service terminates in accordance with its terms, then the SFN Terms of Service will co-terminate on the same day as the Shopify Terms of Service.

  4. Effect of Termination. Upon the termination of the SFN Terms of Service by either party for any reason:

    i. Shopify will cease providing you with the Fulfillment Services and you will no longer have access to the Fulfillment Services section in your Administrative Console for the Store(s);

    ii. unless otherwise provided in the SFN Agreement, you will not be entitled to any refunds of any prepaid Fees, pro rata or otherwise;

    iii. any outstanding balance of any Fees or other charges owed by you to Shopify up to the effective date of termination will immediately become due and payable in full; and

    iv. returned Products will be sent to your designated shipping address at your sole cost and expense. However, if Shopify and Merchant do not agree on appropriate return shipping and storage arrangements and charges for returned Products, then you must collect all returned Products within thirty (30) days of Shopify sending notice of termination of the SFN Terms of Service, after which the Parties agree that the Product(s) will be deemed abandoned and Shopify may elect to dispose of the Product(s) in Shopify’s sole discretion, and at Merchant’s sole cost and expense.

8. Representations and Warranties

  1. SHOPIFY WARRANTIES. SHOPIFY REPRESENTS AND WARRANTS TO YOU THAT (a) DURING THE TERM IT WILL PROVIDE THE FULFILLMENT SERVICES IN A MANNER CONSISTENT WITH THESE SFN TERMS OF SERVICE; (b) IT HAS THE LEGAL POWER TO ENTER INTO AND PERFORM ITS OBLIGATIONS AND GRANT THE RIGHTS TO YOU SET OUT IN THESE SFN TERMS OF SERVICE.

  2. YOUR WARRANTIES AND COVENANTS. YOU REPRESENT, WARRANT AND COVENANT THAT:

    i. YOU HAVE THE LEGAL POWER TO ENTER INTO AND PERFORM YOUR OBLIGATIONS UNDER THE SFN TERMS OF SERVICE AND THE PERSON BINDING YOU TO THE SFN TERMS OF SERVICE ON YOUR BEHALF HAS BEEN DULY AUTHORIZED TO DO SO;

    ii. YOU ARE THE LEGAL OWNER AND/OR HAS LAWFUL POSSESSION OF THE PRODUCTS AND HAS THE SOLE LEGAL RIGHT TO STORE AND THEREAFTER DIRECT THE RELEASE AND/OR DELIVERY OF THE PRODUCTS;

    iii. THERE ARE NO POTENTIAL HEALTH, SAFETY OR ENVIRONMENTAL HAZARDS ASSOCIATED WITH THE WAREHOUSING OR FULFILLMENT OF THE PRODUCTS TENDERED TO SHOPIFY UNDER THESE SFN TERMS OF SERVICE; AND

    iv. THE PRODUCTS (A) DO NOT VIOLATE ANY APPLICABLE LAWS, AND (B) DO NOT CONTAIN ANY MATERIAL OR COMPONENT THAT VIOLATES ANY APPLICABLE LAWS.

9. Disclaimers

  1. Disclaimer. EXCEPT AS SPECIFICALLY SET OUT IN THIS SECTION, THE FULFILLMENT SERVICES ARE PROVIDED “AS IS” AND “AS AVAILABLE”, WITHOUT ANY REPRESENTATIONS, WARRANTIES OR CONDITIONS OF ANY KIND. SHOPIFY AND ITS THIRD PARTY LICENSORS AND SUPPLIERS MAKE NO OTHER REPRESENTATIONS AND GIVE NO OTHER WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE REGARDING THE FULFILLMENT SERVICES OR ANY PRODUCTS PROVIDED UNDER THE SFN TERMS OF SERVICE AND SHOPIFY SPECIFICALLY DISCLAIMS ANY AND ALL REPRESENTATIONS, WARRANTIES OR CONDITIONS OF MERCHANTABILITY, DURABILITY, TITLE, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW. SHOPIFY DOES NOT WARRANT THAT THE FULFILLMENT SERVICES WILL MEET YOUR EXPECTATIONS OR SPECIFICATIONS, BE SECURE, TIMELY, UNINTERRUPTED OR FREE FROM DEFECTS OR ERRORS, OR THAT DEFECTS OR ERRORS WILL BE CORRECTED. SHOPIFY DOES NOT OFFER A WARRANTY OR MAKE ANY REPRESENTATION REGARDING THE RESULTS OF USING THE FULFILLMENT SERVICES IN TERMS OF CORRECTNESS, ACCURACY, RELIABILITY, CUSTOMER BASE, COMMERCIAL ADVANTAGE, OR RISK OF INJURY TO YOUR SYSTEMS OR NETWORK. THE USE OF THE FULFILLMENT SERVICES OR THIRD-PARTY SERVICES IS AT YOUR OWN RISK.

  2. Release. You, on your own behalf and on behalf of any successors, subsidiaries, Affiliates, officers, directors, shareholders, employees, assigns, and any other person or entity claiming by, through, under, or in concert with them (collectively, the “Releasing Parties”), irrevocably acknowledge full and complete satisfaction of and unconditionally and irrevocably release and forever fully discharge Shopify and each of its Affiliates, and any and all of its and their predecessors, successors, and Affiliates, past and present, as well as each of our and their partners, officers, directors, shareholders, agents, employees, representatives, attorneys, and assigns, past and present, and each of them and all persons acting by, through, under, or in concert with any of them (collectively, the “Released Parties”), from any and all claims, obligations, demands, causes of action, suits, damages, losses, debts, or rights of any kind or nature, whether known or unknown, suspected or unsuspected, absolute or contingent, accrued or unaccrued, determined or speculative (collectively, “Losses”) which the Releasing Parties now own or hold or at any time have owned or held or in the future may hold or own against the Released Parties, or any of them, arising out of, resulting from, or in any way related to the shipment, export, or delivery of your Products to International Locations, including any tax registration or collection obligations. You, on your own behalf and on behalf of all other Releasing Parties, recognize that you, and each of the Releasing Parties, may have some Losses, whether in tort, product liability, contract, warranty, or otherwise, against the Released Parties of which you, or any of them, are totally unaware and unsuspecting, or which may arise or accrue after Effective, which the Releasing Parties are giving up by agreeing to the SFN Terms of Service.

  3. Regulatory Compliance. In addition to those terms otherwise stated in this Section 9 (Disclaimers), you agree that Shopify is not responsible for any Losses resulting from, or in any way related to, any action by a government agency or other regulatory authority including, without limitation, search or seizure of Products at any time or place by U.S. Government Trade Agencies such as the Department of Homeland Security.

10. Indemnities and Limitation of Liability

  1. Merchant Indemnity. You will indemnify and hold Shopify and (as applicable) its subsidiaries, affiliates, partners, officers, directors, agents, and employees, harmless from and against any third party claims, demands, losses, damages, liabilities and costs (including, without limitation, reasonable attorneys’ fees and court costs) (“Claims”) due to, arising out of or related to: (i) the Products; (ii) Your use or misuse of the Fulfillment Services except to the extent such Claims arise solely from a third party claim that Shopify IP infringes third party rights or violates applicable law; (iii) disputes arising from transactions made via the Store(s), or Your relationship with any of your customers; (iv) any breach of Your representations and warranties; (v) Your breach of the SFN Terms of Service; or (vi) Your violation of any applicable law or Third Party Rights.

  2. Limitation of Liability. TO THE EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL SHOPIFY BE LIABLE TO YOU FOR ANY LOST PROFITS OR FOR ANY INCIDENTAL, PUNITIVE, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS, LOSS OF PROFITS, BUSINESS INTERRUPTION, LOSS OF DATA, LOST SAVINGS OR OTHER SIMILAR PECUNIARY LOSS), HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE), WHETHER SUCH DAMAGES ARE ALLEGED IN TORT, CONTRACT OR ANY OTHER LEGAL OR EQUITABLE THEORY, AND WHETHER OR NOT SHOPIFY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL SHOPIFY’S AGGREGATE LIABILITY FOR DAMAGES ARISING OUT OF OR RELATED TO THESE SFN TERMS OF SERVICE EXCEED THE PREPARATION FEES PAID BY YOU UNDER THESE SFN TERMS OF SERVICE IN THE TWELVE (12) MONTHS PRIOR TO THE DATE ON WHICH THE CLAIM AROSE. YOU ACKNOWLEDGE AND AGREE THAT THE LIMITATIONS SET FORTH IN THIS SECTION 10.2 ARE INTEGRAL TO THE AMOUNT OF FEES CHARGED BY SHOPIFY FOR THE FULFILLMENT SERVICES AND THAT IF SHOPIFY WERE TO ASSUME ANY FURTHER LIABILITY OTHER THAN AS SET FORTH HEREIN, THE FEES WOULD OF NECESSITY BE SUBSTANTIALLY INCREASED.

11. Confidentiality and Privacy

  1. Confidential Information. For the purposes of these SFN Terms of Service, “Confidential Information” includes any information, technical data, or know-how concerning either party, including, but not limited to, that which relates to research, products, services, customers, markets, business policies or practices, unreleased software, developments, inventions, processes, designs, drawings, engineering, marketing, reports and audits, business plans or finances, and the relationship between the parties as evidenced by the SFN Terms of Service. You acknowledge that Confidential Information may contain material, non-public information of Shopify, and You are aware, and your representatives have been advised, that applicable securities laws prohibit any person having material, non-public information about Shopify from purchasing or selling securities of Shopify. Confidential Information also includes any materials or information provided by either party to the other that are identified by the disclosing party as confidential or proprietary, or that the receiving party should reasonably understand to be confidential and proprietary. Confidential Information does not include information that: (i) was in the public domain at the time the receiving party received it; (ii) comes into the public domain after the receiving party received it through no fault of the receiving party; (iii) the receiving party received from a third party without breach of the receiving party’s or third party’s confidentiality obligations; (iv) is independently developed by the receiving party without use of or reference to the Confidential Information; or (v) the receiving party is required by law to disclose. For the avoidance of doubt, the terms and conditions of the SFN Agreement shall be considered Confidential Information of both parties.

  2. Confidentiality Obligations. Neither party shall use any Confidential Information of the other party except as necessary to exercise its rights or perform its obligations under the SFN Terms of Service or as expressly authorized in writing by the other party. Each party shall use the same degree of care to protect the other party’s Confidential Information as it uses to protect its own Confidential Information of like nature (and in any case no less than a reasonable degree of care). Neither party shall disclose the other party’s Confidential Information to any person or entity other than its officers, directors, employees, service partners, customers, consultants and legal advisors who need access to such Confidential Information in order to effect the intent of the SFN Terms of Service and who are subject to confidentiality obligations at least as restrictive as those in this Section 11.

  3. Injunctive Relief. Each party acknowledges that due to the unique nature of the other party’s Confidential Information, the disclosing party may not have an adequate remedy in money or damages if any unauthorized use or disclosure of its Confidential Information occurs or is threatened. In addition to any other remedies that may be available in law, in equity or otherwise, the disclosing party shall be entitled to seek injunctive relief to prevent such unauthorized use or disclosure.

  4. Other Exceptions. Notwithstanding the foregoing provisions in this Section 11, the parties may disclose the terms and conditions of the Merchant Order: (i) as otherwise required by law or the rules of any stock exchange or over-the-counter trading system provided that reasonable measures are used to preserve the confidentiality of the Merchant Order; (ii) in confidence to legal counsel; (iii) in connection with the requirements of a public offering or securities filing provided reasonable measures are used to obtain confidential treatment for the proposed disclosure, to the extent such treatment is available; (iv) in connection with the enforcement of the Merchant Order or any rights under the Merchant Order, provided that reasonable measures are used to preserve the confidentiality of the Confidential Information; (v) in confidence, to auditors, accountants and their advisors who are subject to confidentiality obligations at least as restrictive as those in this Section 11; and (vi) in confidence, in connection with a change of control or potential change of control of a party or an affiliate of a party, provided that reasonable measures are used to preserve the confidentiality of the Merchant Order. For any legally compelled disclosure or disclosure pursuant to a court, regulatory, or securities filing, the parties shall reasonably cooperate to limit disclosure of Confidential Information, including the terms and conditions of the Merchant Order. For greater certainty, nothing in this Section 11 will diminish a receiving party’s obligations under these SFN Terms of Service to comply with applicable privacy and personal information protection laws.

  5. Personal Information. The Shopify Privacy Policy will govern Shopify's use and storage of, and access to, personal information, its purchasers, users or Store visitors transmitted via or stored on the Fulfillment Services. Any personal information that you transmit to Shopify, or that Shopify collects on your behalf relating to residents of the European Economic Area will be processed by Shopify’s Irish affiliate Shopify International Ltd., in accordance with the Shopify Privacy Policy.

12. Shrinkage, Loss and Merchant Insurance

  1. Shrinkage. Handling physical products could result in loss or damage of Products. Shopify strives to maintain high standards, however occasionally facilities experience concealed shortages, product damages, mislabeled, miss-picked Products and/or cross-shipments. You agree that Shopify will have a 0.5% shrink allowance based on the total value of Your Products known to be in a Fulfillment Location based on the total original purchase invoices from your supplier for all Products on an annual basis (the “Shrinkage Allowance”). Explainable, offsetting Inventory adjustments based on miss-marked Products or receiving Product errors will not be deemed a Product shrinkage event or lost Product.

  2. Loss & Product Cost. If there is a loss of or damage to any Products while at a Fulfillment Location in excess of the Shrinkage Allowance (a) you will be solely responsible for any such loss of, or damage to, any Products, except that (b) Shopify will be liable for loss or damage to the Products where such loss or damage is directly caused by Shopify’s gross negligence or willful misconduct. To the extent Shopify is liable for any loss or damage to the Products in excess of the Shrinkage Allowance and pursuant to this Section 12.2, you agree that Shopify’s liability for such damage caused to the Products shall be limited to the actual product cost of the Products, which shall be measured by the original purchase invoice from your supplier.

  3. Product Acceptance. Shopify’s confirmed receipt of delivery does not: (a) indicate or imply that any Product has been delivered free of loss or damage, or that any loss or damage to any Product later discovered occurred after confirmed receipt of delivery; (b) indicate or imply that Shopify actually received the number of Products specified by you for such shipment; or (c) waive, limit, or reduce any Shopify rights under the SFN Agreement. Shopify reserves the right to impose, and change from time to time, scheduling restrictions and volume limitations on the delivery and storage of your inventory in Fulfillment Locations, and you will comply with any of these restrictions and limitations.

  4. Merchant to Obtain Insurance. You acknowledge that the Products stored or warehoused by Shopify are not insured against loss or damage by Shopify, and you shall be solely responsible for obtaining insurance coverage for the Products. You acknowledge that Shopify has strongly recommended that you purchase insurance from a reputable insurance provider notwithstanding the value of the Products, and you represent and warrant that you have secured such insurance.

  5. Carrier Claims. As of the Effective Date, your claims regarding lost, stolen or damaged orders during transit must be made directly to the applicable carrier. After the Effective Date, at Shopify’s sole discretion, Shopify may begin administering such claims for you, in which case Shopify will provide prior written notice to you and you agree that (a) Shopify may file a claim with the applicable carrier for Products valued at less than or equal to $100.00, (b) where the carrier approves the claim, a credit will be applied on the next invoice for the amount the carrier paid to Shopify, (c) you will provide Shopify with any requested information in connection with the submission of a claim to the carrier, and (d) if the carrier denies the claim, you agree that under no circumstances will Shopify have any liability for such shipment.

13. General

  1. Relationship of Parties. You and Shopify are independent contractors. Neither party shall be deemed to be an employee, agent, partner, joint venture or legal representative of the other for any purpose and neither shall have any right, power or authority to create any obligation or responsibility on behalf of the other. Any use of the term “partner” or “partnering” or similar terminology in connection with the Fulfillment Services or these SFN Terms of Service (except as used in the immediately preceding sentence of this Section) does not mean or refer to a legal partnership, but instead means or refers to a co-operative business or contractual relationship.

  2. Assignment. You may not assign the Merchant Order, these SFN Terms of Service, or any part of the SFN Agreement without the prior written consent of Shopify, such consent not to be unreasonably withheld. Shopify may assign these SFN Terms of Service and the SFN Agreement at any time.

  3. Governing Law; Jurisdiction; Limitation of Action. The SFN Agreement is governed by and is to be construed and interpreted in accordance with the laws in force in the State of New York, without regard to conflict of law principles. The parties expressly disclaim the application of the United Nations Convention on the International Sale of Goods to the SFN Terms of Service. All disputes arising under the SFN Terms of Service will be subject to the exclusive jurisdiction of the state courts and federal courts located within New York (Manhattan) County, New York and each party irrevocably and unconditionally consents to personal jurisdiction of such courts.

  4. Compliance with Laws. Each party agrees to fully comply with all applicable laws in their performance of the SFN Agreement.

  5. Severability. If any provision of the SFN Agreement is held by a court of competent jurisdiction to be contrary to law, such provision shall be changed and interpreted so as to best accomplish the objectives of the original provision to the fullest extent allowed by law, and the remaining provisions of the SFN Agreement shall remain in full force and effect.

  6. Force Majeure. Except for obligations to pay any Fees owing under the SFN Agreement, neither party shall be deemed to be in breach of the SFN Agreement for any failure or delay in performance caused by reasons beyond such party’s reasonable control, including but not limited to acts of God, extreme weather, earthquakes, wars, terrorism, communication failures, strikes (other than strikes at such party’s facility or involving such party’s employees). If either party’s performance is prevented by a force majeure event for a period of more than 30 calendar days, the other party may terminate the SFN Agreement without further obligation or liability, subject to any payment amounts due and payable as of the effective date of termination.

  7. No Exclusivity. Shopify reserves the right to provide services (including Fulfillment Services) to your competitors and makes no promise of exclusivity in any particular market segment.

  8. Legal Notice. All legal notices or demands to or upon a party shall be made in writing and sent to such party personally, by courier or certified mail, or email. Notices for you will be sent to the address identified in the SFN Merchant Order. Notices for Shopify will be sent to the following addresses:

    Shopify Inc.,
    151 O’Connor Street, Ground floor,
    Ottawa, ON, K2P 2L8

    Attn: General Counsel,
    or via email to contract_notices@shopify.com.

    Except as otherwise specified in the SFN Terms of Service all notices, permissions and approvals must be in writing and will be deemed to have been given upon: (i) personal or couriered delivery; (ii) the fifth business day after mailing; or (iii) the first business day after sending by email.

  9. Right of Set-Off. Shopify may deduct any amount owed to Shopify by you that has not been credited against payments owed by Shopify. Shopify may deduct the entire amount owed against the charges otherwise payable or expenses owed to you under the SFN Terms of Service until such time as the entire amount owed to Shopify has been paid. Shopify will have the right to withhold any charges it disputes in good faith under the SFN Terms of Service and such withholding shall not thereby constitute or be deemed to constituted a default or breach by Shopify of the SFN Terms of Service and you shall not thereby be released from or permitted to cease performance of any of its obligations hereunder during the continuance of any such good faith dispute the resolution of which continues to be diligently pursued in good faith by either of the parties.

  10. Suggestions and Feedback. Shopify welcomes any ideas and/or suggestions regarding improvements or additions to the Fulfillment Services. Under no circumstances shall any disclosure of any idea, suggestion or related material (collectively, “Suggestions”) to Shopify be subject to any obligation of confidentiality or expectation of compensation. By submitting a Suggestion to Shopify, you waive any and all rights in the Suggestion and that Shopify is free to implement and use the Suggestion if desired, as provided by you or as modified by Shopify, without obtaining permission or license from you or from any third party.

  11. Amendment and Waiver. You acknowledge and agree that Shopify may amend these SFN Terms of Service at any time by posting the relevant amended and restated Terms of Service on Shopify’s website, available at https://www.shopify.com/legal/fulfillment-us and such amendments to the SFN Terms of Service are effective as of the date of posting. Your continued use of the Services after the amended SFN Terms of Service are posted to Shopify’s website constitutes your agreement to, and acceptance of, the amended SFN Terms of Service. If you do not agree to any changes to the SFN Terms of Service, do not continue to use the Service. The failure of either party to exercise or enforce any right or provision of the SFN Terms of Service shall not constitute a waiver of such right or provision or any other provision of the SFN Terms of Service or otherwise affect the rights of such party.

  12. Entire Agreement. The SFN Agreement and any documents incorporated by reference constitute the entire agreement between the parties respecting your use of the Fulfillment Services and supersede any prior written or oral agreements between the parties with respect to the Fulfillment Services.

  13. Survival. All sections of the SFN Terms of Service that by their nature should survive termination will survive such termination, including, without limitation, payment obligations, confidentiality obligations, intellectual property rights, warranty disclaimers, indemnities and limitations of liability.