(Reformatted Template) Production Contract Agreement

Revamped Manufacturing Agreement

Yo, here's the skinny on the deal - a rock-solid Manufacturing Agreement crafted to keep the brass happy. You slap the product specifications on it as Exhibit A, all spick and span in MS Word format, of course.

Here's a breakdown of what's covered in this Baby-you-got-it:

Product Guarantee: The manufacturer swears the product will match the specs, arrive on time, and be as good as new and devoid of defects, just like the samples.
Good Title: The manufacturer swears they own the product outright, with no strings attached.
Insurance: The manufacturer's gotta have insurance that's airtight, meaning it covers their backside if something bad goes down whenever they're turning out your product.
Indemnity Clause: If any units of product turn out questionable, the manufacturer will cover the cost of redoing 'em or scrapping the order altogether, all at their expense.
Risk Transfer: The manufacturer's responsible for ensuring the product is secure until it's in your hot little hands, meeting all your specifications down to the ground.
Client's Offset Power: You've got the power to offset any dues owed to the manufacturer against what you're owed by them.
Client's Right to Audit: You've got the power to waltz into the manufacturer's factory to check up on things, ensuring everything's above-board.
No Shenanigans: The manufacturer agrees to keep your contacts and employees intact and not to nick off with anyone who's working for you.

MANUFACTURING AGREEMENT

The Parties:

| | || --- | --- || The Parties: | The Client: __ __ _ _ _ _
Address: _ _ _ _ _ || The Manufacturer: _ _
Address: _ _ _ _ _ || Effective Date: | _--___, 2016 || Term and Termination: | This deal lasts for two years, but either side can call it quits early. They just need to give the other party formal written notice if the other party fails to follow the delivery dates, specs, or other major obligation in the agreement. The deal can also be terminated early if the other party: (a) stops production; (b) files bankruptcy; (c) gets hit with an involuntary bankruptcy filing; (d) has a receiver or trustee appointed; (e) makes any kind of deal with creditors; (f) becomes insolvent; or (g) goes out of business. |

The Client: ___________________________________________Address: ______________________________________________

Product: Exhibit A Warranties Indemnity Insurance Delivery Revocation and Rejection Risk of Loss Right of Setoff Audit Non-Circumvention Governing Law Prevailing Language Equitable Remedies General Provisions [Signature page follows]

| | || --- | --- || CLIENT: Signed By: __ __ _ Name/Title: _ _ _ Date:_ _ _ _ | MANUFACTURER: Signed By: _ _ _ Name/Title: _ _ _ Date: _ _ _____ |

The Manufacturer: ____________________________________Address: ______________________________________________

Exhibit A Delivery Schedule: Payment Terms:

| | || --- | --- || CLIENT: Signed By: __ __ _ Name/Title: _ _ _ Date:_ _ _ _ | MANUFACTURER: Signed By: _ _ _ Name/Title: _ _ _ Date: _ _ _____ |

Effective Date:

Wanna learn more about creating bulletproof manufacturing agreements? Here's an article to get you up to speed.

____________________, 2016

Cranking Out a Robust Manufacturing Agreement [+ Free Template]

As a legal eagle, I've seen my share of manufacturing deals between businesses in various sectors, from metal fabrication to commercial projects. A well-drafted contract is like having the works on an insurance policy, providing crucial protection against disputes and legal headaches. Here’s a deep-dive into key elements every manufacturing agreement should have to ensure a strong foundation for your business dealings:

Term and Termination:

Warranties:- The manufacturer promises the product will match agreed specs, be free of defects, and comply with all applicable laws and regulations. - Warranties set clear expectations and provide remedies if the product fails to meet specifications.

This Agreement remains in effects for two (2) years from the Effective Date, unless extended or terminated early. This Agreement may be terminated earlier by either Party by written notice to the other Party if that other Party fails to perform strictly in accordance with the required delivery dates, Product specifications or any other material provision of this Agreement or any purchase order. The Agreement may also be terminated early if the other party: (a) ceases production; (b) files a voluntary petition in bankruptcy; (c) has an involuntary petition in bankruptcy filed against it; (d) has a receiver or trustee appointed for it; (e) makes an assignment for the benefit of creditors; (f) becomes insolvent; or (g) goes out of business.

Indemnity:- The manufacturer agrees to cover any third-party claims arising from product defects, intellectual property infringement, or regulatory compliance issues connected to the manufactured goods. - This shields the client from potential legal and financial hazards stemming from the manufacturer’s actions.

Insurance:- The manufacturer must have sufficient insurance coverage, including product liability and general liability, naming the client as an additional insured or policy beneficiary.

Delivery Terms:- Clear delivery schedules, conditions, and locations, along with terms on delays, penalties, and acceptance criteria for delivery.- Use Incoterms to clarify risk transfer points and responsibilities.

Revocation and Rejection:- The client should be allowed to inspect goods upon delivery and reject any items that don't meet the contract specifications.- Establish a process and timeframe for rejection, return, and replacement of non-conforming goods.

CLIENT:By: _____________________________Name/Title: ______________________Date:____________________________

Risk of Loss:- Clearly define risk of loss allocation. Ideally, risk doesn't pass to the client until acceptance of goods.- Until then, the manufacturer is responsible for any damage, loss, or destruction.

MANUFACTURER:By: _______________________________Name/Title: ________________________Date: ______________________________

Right of Setoff:- The client has the power to offset any amounts owed to the manufacturer against damages, penalties, or refunds due to non-performance or defects.- This financial cushion provides leverage in the event of a dispute.

Audit:- Allow the client to audit the manufacturer's facilities, books, and records related to production and costs to ensure compliance with quality standards and pricing terms.- Transparency promotes accountability in the production process.

Non-Circumvention:- A clause prohibiting the manufacturer from selling the product or related intellectual property directly to third parties, circumventing the client.- Helps protect the client's business interests and proprietary relationships.

Governing Law:- Specify the governing law favorable or neutral to the client's jurisdiction or business environment.- Affects dispute resolution and legal interpretation.

CLIENT:By: _____________________________Name/Title: ______________________Date:____________________________

Prevailing Language:- Set the language in which the contract is drafted as the one that prevails in the event of a translation discrepancy.- Clear communication eliminates potential misunderstandings in multinational agreements.

MANUFACTURER:By: _______________________________Name/Title: ________________________Date: ______________________________

Equitable Remedies:- Include provisions for injunctive relief and specific performance, addressing breaches where monetary damages are insufficient.- Strengthens the client's ability to enforce agreement compliance and seek equitable relief for unique products or intellectual property.

General Provisions:- Clauses on confidentiality, force majeure, assignment, notice requirements, and entire agreement establish procedural and operational guidelines benefiting the client.

By incorporating these terms, you'll have a powerhouse contractual framework, giving you the upper hand when it comes to manufacturing quality, timelines, financial protection, and legal recourse. Happy dealings!

Related

Crafting an Ironclad Manufacturing Agreement [+ Free Template]
(Free Template) IP Assignment Agreement
Ransomware Negotiation Agreement (Free Template)

FacebookMessengerTwitterPinterestLinkedinWhatsappEmail

Interested?

Crafting an Ironclad Manufacturing Agreement [+ Free Template]As a contracts lawyer working with clients in the custom manufacturing industry, I've seen firsthand the importance of a well-drafted agreement. With every project comes the risk of disputes and legal entanglements. A solid manufacturing contract acts as your first line of defense against potential issues, while providing a blueprint for a successful business relationship...

(Free Template) IP Assignment Agreement*This basic IP Assignment Agreement can be used to transfer ownership of intellectual property from a current owner to a new one. The assignor hereby represents and warrants that they possess the legal right to validly assign the IP. In addition, the assignor agrees to further assist, if necessary, to execute any further agreements and...

Ransomware Negotiation Agreement (Free Template)Ransomware attacks have become increasingly sophisticated, wreaking havoc on businesses of all sizes. When victims find themselves held hostage by hackers, it's crucial to consult experienced negotiators to decrease downtime and minimize financial losses. This basic contract template is designed for companies that negotiat...

The manufacturing agreement covers various aspects of the deal, including warranties, indemnity, insurance, delivery, revocation and rejection, risk of loss, right of setoff, audit, non-circumvention, governing law, prevailing language, equitable remedies, and general provisions. The manufacturing industry and finance are integral parts of this business arrangement.

The manufacturing agreement is crucial in ensuring a strong foundation for business dealings in diverse sectors, such as metal fabrication and commercial projects, providing protection against disputes and legal challenges.