Norman,
As usual, very good comments, however.....
1) I know of a laminate manufacture / PWB house relationship where the
laminate supplier replaces defective material and buys all the labor in the
product upto the point the defect is discovered.
2) I know of a shop who requires PWB suppliers to replace defective
material and buys all the labor (parts?) in the product upto the point the
defect is discovered.  (This tended to keep supplier prices high, which
helped keep the small captive shop 'profitable', and in business.)

So, I know the practice is out there.  Does it make sense to either party?
Maybe not.  Sounds like a great way to build mistrust with suppliers. But
anyway, your statement, "If you think I would accept your buy back
contract, you must think I am stupid!", (from below) makes me think of
Forrest Gump's quote, "Stupid is what Stupid does, Sir!"



>Liability....Ownership of liability for board defects before and
>after assembly???
>
>Whow....What a subject!  The following answer should ruffle a lot of
>feathers and spur another response or two.  I dont manufacture
>boards and I dont use boards but I have considerable experience
>(over 30 years) in both areas.  The responses I read to this subject
>compelled me to answer.
>
>Some of the responses:
>
>1.-  The vendor is responsible for all costs of a discrepant assembly
>based on defective PWB.
>2.-  Its a matter for all vendors to take ownership of quality
>defects at the point they are identified.
>3.-  The vendor shall be responsible regardless of when the defect
>shows up.
>4.-  If the defects are found after receipt and before assembly, the
>vendor is responsible for your
>      quality and receiving time to qualify it.
>5.-  If the board gets assembled, soldered and tested and shows a
>failure, the vendor is responsible
>      components and all labor costs.
>6.-  To do business with you the vendor must abide by your terms.
>7.-  You have a battery of lawyers just waiting to hunt your vendor
>down, kill your first born and
>       make their life a living hell.
>8.-  Much emphasis was placed on electrical testing.
>
>QUESTION.....WHAT IS YOUR RESPONSIBILITY?.....LOOKS LIKE NONE!....
>GOOD POSITION IF YOU CAN FIND ENOUGH SUCKERS TO BUY INTO THIS.
>
>REAL LIFE RESPONSIBILITY (tested many times in court)
>
>LAMINATE SUPPLIER:  It is the responsibility of the laminate supplier
>to inspect and test all materials going into the laminate prior to
>lamination.  If the laminate fails due to the resin, the resin
>supplier is responsible to replace the resin, not the copper, glass
>fabric and labor of making the material. PERIOD, END OF LIABILITY!
>
>BARE BOARD VENDOR:  It is the responsibility of your vendor to
>inspect and test all materials and chemicals prior to manufacture.
>If the chemicals or laminate fails after manufacture, the supplier is
>only responsible to replace the defect material and not the cost of
>manufacturing the board.  PERIOD, END OF LIABILITY!
>
>USER RESPONSIBILITY:  It is your responsibility to inspect and test
>the bare-board prior to assembly and soldering.  If the board fails
>during inspection or test your vendor is responsible to replace the
>board. PERIOD, END OF LIABILITY!
>
>If it fails after assembly and soldering your vendor may, or may not,
>be responsible to replace the board, depending on the torture you put
>the board through (wave solder, reflow, double reflow, hand iron or a
>combination all).  Did you specify a material that was capable of
>your specific torture?  Did you run temperature profiles for a
>specific design and keep within the limitations of the specified
>material?  This can all be very subjective, relative to liability.
>Or do you simply require your your vendor to eat all liabilities
>regardless of where the fault lies?  LIABILITY HERE MUST BE
>NEGOTIATED!
>
>ELECTRICAL TEST:  Electrical test is not for reliability or quality
>levels of the board.  This test simply and solely assures continuity.
> It does not tell you whether you have hair line fractures in the
>copper foil or if there are barrel cracks which may ultimately fail
>at a later date.  This test may very possibly pass boards that would
>show intermittent failures.  In other words it may pass electrical
>test at your vendors and fail after soldering.
>
>MANUFACTURE:  Today, the quality of the bare-board is generally very
>good.  Your vendor has installed SPC and constantly monitors all
>processes through chemical analysis, in process inspection, testing,
>etc..  However, there are over 100 process steps to make a multilayer
>board.  Any single one of these process steps can go out of whack
>which can cause a failure.
>
>DOCK TO STOCK:  Most users today do very little in the way of
>incoming inspection, with user cross sectioning processes becoming a
>thing of the past.  They are leaving all quality and incoming
>inspection responsibilities in the vendors hands.  This is to reduce
>your operating costs.  It very much like going to Las Vegas.  However,
> if your choose to go to Las Vegas, bring your own money.  You have
>selected this route and the consequences.
>
>FACTS OF LIFE:  Though I do not manufacture boards, lets for the
>moment assume that I am your vendor.  Lets assume that you are going
>to give me $100,000 a year in business.  Lets further assume that I
>have a 10 percent profitable business.  Lets assume that you give me
>a $5,000 order and the components with labor amounts to $15,000.  I
>would be already at a loss if the order failed.  If you think I would
>accept your buy back contract, you must think I am stupid!
>
>Now lets assume that you are going to give me $1,000,000 a year in
>business.  Now I may consider signing your buy back contract.
>However, we are going to have many disagreements of who is at fault
>when a failure arrives.  If I am at fault, and the buy back doesnt
>amount to very much, I will honor the buy back.  If the loss amounts
>to significant dollars, I want out of the contract and be happy to
>lose you as a customer.  Lets say that we dont have a contract and
>the loss is significant, lets go to court.  You loose, I win!
>
>Many years ago when I did in fact manufacture boards, a customer
>asked me to quote a board that would include a buy back.  I first
>asked how many dollars were involved, in addition to the price of the
>board.  It amounted to $107.00.  The board was $10.00.  Guess what?
>I quoted the board at $117.00.
>
>Basically, the industry standard is,... you use it, you own it.  The
>only thing your vendors is legally responsible for is the price of
>the board!!!!!
>
>Well I have put in my two cents worth, hoping the buy back isnt too
>high.  I cant help but wonder if there are any vendors out there
>that have nerve to comment on this without the fear of loosing a
>customer that they have signed a buy back agreement with.
>
>
>Regards,
>
>Norm Einarson
>Printed Circuit Technology
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