Fashion or FMCG design and make up agreement

About this document

This is a contract for a business in the fashion or a fast moving consumer goods industry to use to have a product developed and made up by a manufacturer. The manufacturer may be based in the UK or abroad.

This agreement is for use between someone with a concept or early stage design for a fashion product or fast moving consumer good and another party who will develop that design and ultimately manufacture the product.

A fast moving consumer good (an FMCG) tends to be a non-durable good or that a good that has a short shelf life because of high demand, seasonal demand, or rapid deterioration. Examples include:

• fashion clothing and accessories
• toys
• food and drinks
• toiletries and cosmetics
• over the counter drugs
• cleaning products and household consumables

The success of selling an FMCG is often reliant on two things: maintaining a profit margin by keeping R&D and manufacturing costs down; and selling a high enough volume. If using a third party to further design and make-up a product, it is important to stay in control of costs and to make sure that goods are delivered to specification and on time. The way to achieve this is to use a contract that covers all the bases such as this one.

The work carried out by the third party may include:

• development of your initial design, such that it meets cost and quality constraints, and complies with national or international standards
• short production runs for prototyping and creating samples
• testing
• manufacture of the final product
• packaging and labelling

Because the nature of the product being developed and made up could be so diverse, the document leaves the specification of the product, and the exact work required, as a schedule that you will complete. That cleanly leaves the legal terms separate to the detail of the product.

There is strong intellectual property protection for the business contracting out the work to the manufacturer. This includes both protection of the product design, transfer of final design rights, and confidentiality around the work being carried out.

This document can be used as an umbrella contract for further orders. If your initial product run sells much faster than you expect, you can use this contract to place further orders quickly, without needing to renegotiate terms.

Contents

This is a comprehensive agreement covering many matters. However, all are done so in plain English, and structured so that they can be followed (and edited by you) easily. The most important provisions that you will want to be sure are covered are likely to be:

• Manufacturer’s warranties - who they are, what qualifications they have
• Scope of work - what exactly is the deal
• Design reviews, product testing and quality assurance
• Setup costs
• Payment for product development
• Delivery
• A right for you to show their plant to potential customers or regulatory bodies
• Design price and payment
• Production price
• Use of sub-contractors
• Option to cancel contract if ownership of their business changes
• Protection of confidential Information, including your intellectual property
• New designs
• Rules for publicity and announcements