8. Defects / non-compliance ("sachmangelhaftung")
(a) Philips warrants that under normal use in accordance with the applicable user manual the Products (excluding any software that is not embedded in or delivered with any goods by Philips or software which is subject to copyright owned by a third party) shall, at the time of delivery, be free from de- fects in material or workmanship and shall substantially conform to Philips' specifications for such Product, or such other specifications as Philips has agreed to in writing, as applicable.
If the Product is defective and/or is not substantially conforming with the specifications, Philips shall have the duty, but also the right, to - at Philips' option - either replace or repair the Product free of charge within a reasonable period of time. The non-conforming or defective Products shall become Philips' property as soon as they have been replaced or credited. If replacement or repair fails, Buyer may cancel the Agreement or reduce the purchase price accordingly.
(b) Claims for damages shall be governed by Section 10.
(c) Buyer may ship Products returned under warranty to Philips' designated facility only in conform- ance with Philips' then current return material authorization policy. Where a warranty claim is justi- fied, Philips will pay for freight expenses. Buyer shall pay for returned Products that are not found to be defective or non-conforming together with the freight, testing and handling costs associated there- with.
(d) Notwithstanding the foregoing, Philips shall have no obligations under warranty if the alleged de- fect or non-conformance is found to have occurred as a result of environmental or stress testing, mis- use, use other than as set forth in the applicable user manual, neglect, improper installation or acci- dent, or as a result of improper repair, alteration, modification, storage, transportation or improper handling or if the usability is impaired only slightly.
(e) Subject to the applicable mandatory law, the express warranty granted above shall extend directly to Buyer only and not to Buyer's customers, agents or representatives. Philips does not give any war- ranty of fitness for a particular purpose, merchantability, or non-infringement of intellectual property rights.
(f) Warranty claims and rights according to Section 8 (a) are subject to a statute of limitations 12 months after delivery. This does not apply if the Act pursuant to §§ 438 para 1 no 2 (buildings and building matters), 479 para 1 (right of recourse) and 634a para 1 no 2 (building defects) of the German Civil Code prescribes longer periods or in the case of intent, gross negligence, non-compliance with a guarantee, or a fraudulent concealment of the defect.
(g) Buyer's right of recourse according to §§ 478 ff German Civil Code shall be limited to cases where Buyer has not agreed with its customers to extend or exceed the scope of the statutory provisions governing claims on defects and non-compliance.
(h) Exceeding claims or claims and rights of the Buyer in connection with defective or non- conforming Products other than regulated in this Section 8 shall be excluded.