Development and manufacturing agreement: manufacturer version
This is an agreement for a manufacturer to put to a client. It is suitable where the client's requirements are simple (perhaps a single process) or where the client's needs are more complicated, requiring assistance with design, production of multiple parts, finishing those parts, assembly, and packaging.
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About this document
Most agreements like this one are for the customer to initiate and control.
This one is for the manufacturer to set down the terms. The document could be used as standard T&C for all clients, or for a single project that perhaps involves multiple costly processes and where it is important to control each step or to obtain payment after each stage in order to manage risks to your business.
The agreement covers the legal structure of the deal in plain English. We leave you and your client to create the specification for the actual work to be carried out and the standards to be achieved, and for it to be referenced into the document or attached as a schedule.
We consider who might own intellectual property created during the production process. For example, you may come up with a mechanism for hinging two parts that the client had not considered. The agreement allows you to specify who owns new ideas such as that one.
There is a retention of title clause to ensure that you can retain possession of the goods if the client does not pay.
The agreement can be used where the customer is based in a country outside of the UK. For example, it references Incoterms for delivery.
If the work to be done is simple, perhaps a single process, this shorter version may be more appropriate.
We don't feel that it is necessary to list every point covered. Some of the most important provisions are likely to be:
- Scope of work - what exactly is the deal
- Design reviews, product testing and quality assurance
- Setup costs and payment for product development - who pays?
- Production price, payment
- Use of sub-contractors
- Delivery and international transport options - Incoterms
- Sales taxes and withholding taxes
- Risk and retention of title
- Confidential Information, including your intellectual property
- Protecting your own IP
- Rules for publicity and / or announcements
This document was written by a solicitor for Net Lawman. It complies with current English law.
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