When a company decides to outsource their manufacturing to a third-party, they usually enter into a contract manufacturing agreement with the chosen manufacturer. This agreement outlines the terms and conditions of the outsourcing relationship, including details such as the parties involved, the products to be manufactured, quality standards, and payment terms.
To help you understand what a contract manufacturing agreement looks like, we`ve put together an example for your reference.
Contract Manufacturing Agreement Example
This Manufacturing Agreement (the «Agreement») is entered into on [Date] by and between [Manufacturer Name], with its principal place of business at [Address] («Manufacturer»), and [Company Name], a [State] corporation with its principal place of business at [Address] («Company»).
1. Purpose
The purpose of this Agreement is to set forth the terms and conditions under which Manufacturer will manufacture and deliver to Company the products described in Exhibit A («Products»).
2. Products
Manufacturer shall manufacture the Products in accordance with the specifications set forth in Exhibit A. Company may, from time to time, provide Manufacturer with revised specifications, which shall be subject to Manufacturer`s approval.
3. Quality Standards
The Products shall be manufactured in accordance with the quality standards set forth in Exhibit B. Manufacturer shall adhere to all applicable laws, rules, and regulations governing the manufacture and delivery of the Products.
4. Delivery
Manufacturer shall deliver the Products to Company at the times and locations set forth in Exhibit A. Company shall provide Manufacturer with reasonable advance notice of any changes to the delivery schedule.
5. Payment Terms
Company shall pay Manufacturer the prices set forth in Exhibit A for all Products delivered. Payment shall be made within [Number of Days] days of receipt of Manufacturer`s invoice.
6. Intellectual Property
Manufacturer acknowledges that all intellectual property and proprietary information related to the Products shall remain the sole property of Company. Manufacturer shall not use, disclose, or reproduce any such information without Company`s prior written consent.
7. Termination
Either party may terminate this Agreement upon written notice to the other party if the other party breaches any material provision of this Agreement and fails to cure such breach within [Number of Days] days after receipt of written notice of such breach.
8. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the State of [State], without giving effect to any choice of law or conflict of law provisions.
9. Entire Agreement
This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, understandings, and agreements between the parties, whether oral or written.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
[Manufacturer Name]
By:___________________________
Name:_________________________
Title:__________________________
[Company Name]
By:___________________________
Name:_________________________
Title:__________________________
Conclusion
A contract manufacturing agreement is an essential document that ensures a successful outsourcing relationship between a company and a manufacturer. It is always advisable to seek legal advice before entering into such agreements. With this example, you can have a better understanding of how to create a contract manufacturing agreement.