Handbags, Footwear and Accessories Manufacturing Contract
This Handbags, Footwear and Accessories Manufacturing Agreement (“Agreement”) is
entered into as of the _______ day of ___________, 20__ (the "Effective Date") between
____________________ (“Designer”) and ___________________ (“Manufacturer”).
A. Designer has created and own designs, copyrights, patents, trade secrets and
trademarks for use on [footwear][handbags] and wishes to have Manufacturer make
[footwear][handbags] incorporating these designs, copyrights, patents, trade secrets and
B. Manufacturer wishes to make [footwear][handbags] incorporating these designs,
copyrights, patents, trade secrets and trademarks and deliver it to Designer.
In consideration of the foregoing and of the mutual covenants contained herein, the
parties agree as follows:
1.1 “[Footwear] [Handbags]” means the [footwear] [handbags] which Designer sells
and/or designs to sell and have sold.
1.2 “Design Rights” means the rights, without limitation, including copyrights, trade
secrets, know-how, trademarks and/or patents, as well as, without limitation,
rights with respect to product materials, colors, patterns, embroidery, and style, in
and to any designs for [Footwear] [Handbags], and to any package designs, labels,
advertising or promotional material and any other designs using or used in
conjunction with the Marks.
1.3 “Marks” means the trademarks of Designer as set forth on Exhibit “B” attached
hereto and incorporated herein by reference.
1.4 “Property” means the intellectual property rights of Designer relating to the
[Footwear] [Handbags] that Designer determines, in its sole discretion, to be
desirable or necessary for Manufacturer to exercise the rights granted in this
1.5 “Products” means solely the products of Designer specified on Exhibit “A”
attached hereto and incorporated herein by reference. Designer shall determine, in
its sole discretion, whether a particular product or article falls within the definition
of Product and Designer reserves the right, in its sole discretion, to eliminate any
product or article as Product at any time so long as the product or article is
eliminated generally from the Product line. Designer, also reserves the right to add
new products or articles as Products.
1.6 “Rights” means collectively the Marks and Property.
2.1 Acknowledgement of Standards and Goodwill. Manufacturer acknowledges that
Designer have each made a substantial investment in developing Products of high
quality and design and developing and fostering an image and reputation of high
quality, design, prestige and integrity under the Marks and Property and that the
consuming public and industry now associate the Marks and Property with
products of consistently high quality and design. Manufacturer further
acknowledges that the terms and conditions of this Agreement are reasonable and
necessary to assure that all Products sold under this Agreement consistently
conform to the high quality and design standards.
2.2 Manufacturing Standards. Manufacturer shall manufacture all of the Products in
accordance with the high quality and design standards prescribed by Designer. In
this regard, Manufacturer shall exercise its best efforts to cooperate with Designer
at all times in the coordination of Products manufactured by Manufacturer so that
they are consistent with the style, image, design and quality of other products sold
under the Rights. If any Products manufactured by Manufacturer fail to conform
to such standards, solely as reasonably determined by Designer, then Designer, in
its sole discretion, may prohibit Manufacturer from using any Rights in
connection with such non-conforming Products. Manufacturer shall supply
Designer with a Certificate of Inspection verifying that all Products manufactured
by Manufacturer were manufactured to Designer’s standards.
2.3 Samples. As early as possible, and in any event prior to the commencement of
any production run, Manufacturer shall furnish to Designer, at no expense to
Designer, one sample of each Product that Manufacturer intends to manufacture
under the Rights. Once the initial sample is approved by Designer, Manufacturer
shall then furnish to Designer one complete [size set] [final sample] for each style
to be made by Manufacturer. Designer shall have the right to exercise quality
control and line content over the Products manufactured and sold by Manufacturer
by making any changes or corrections in such samples as may be required, in
Designer's sole and reasonable determination, to maintain the high quality and
design standards prescribed by Designer, and Manufacturer shall make and
incorporate such changes or corrections at Manufacturer's sole cost and expense.
Manufacturer shall not make any changes to any sample after approval by
Designer without resubmitting the sample for approval.
2.4 Top of Production Samples. As soon as possible after completion of the first
production run of a Product, Manufacturer shall furnish to Designer, at no expense
to Designer, one top sample [in each size] from the first production run of such
Product. Designer shall have the absolute right, in its sole discretion, to approve or
disapprove of such production samples. Manufacturer shall not make any changes
to any sample after approval by Designer without resubmitting the sample for
approval pursuant to Section 2.3. If Designer rejects any sample, Manufacturer
shall discontinue the production of the Product and shall coordinate with
Designer, at Manufacturer's expense, to make changes and corrections to conform
the Product to the high quality and design standards and shall resubmit a sample
for approval pursuant to Section 2.3. In addition, to ensure consistent quality of
production runs, Manufacturer shall furnish to Designer, at no expense to
Designer, two additional production samples of Products [in any given season] as
Designer may, from time to time, request for the purpose of comparison with
earlier samples. If Designer requires more than two such additional samples [in
any given season], Manufacturer shall provide such excess additional samples to
Designer at Manufacturer's regular wholesale price, reduced by any normal trade
discounts given by Manufacturer for sample sales.
2.5 No Third Party Manufacturers. There shall be no third party manufacturers.
3. Services. Designer will furnish to Manufacturer samples and Design Rights necessary
for the services under this Agreement. Designer will designate approved construction
materials and trims of which Manufacturer will order and take delivery only from
approved vendors. Manufacturer agrees to perform services for Designer including
[__________________] and finishing [Footwear] [Handbags]. Manufacturer will provide
counter-samples and production samples for approval by Designer. All [footwear]
[handbags] will be made strictly in accordance with the applicable Production Ticket,
Quality Audit/Release form and approved samples. Designer may also provide
specifications, which must be used. All construction materials, colors, accessories, and
finishes must be delivered as ordered. [Footwear][Handbags] will be packed strictly in
accordance with the instructions from Designer. If the [Footwear] [Handbags] are packed
in any other manner, the invoice price will be reduced by the cost of repacking.
4. Shipping and Delivery. [Unless otherwise stated by Designer in writing, all shipments
shall have 60 day net term. Manufacturer shall adhere to all Designer delivery dates and
cancellation dates. If Manufacturer meets Designer’s cancellation date, Designer shall be
entitled to 60 day net terms. All shipments shall be invoiced by Manufacturer prior to
shipping, and the invoices shall be sent to Designer’s corporate department for approval.
All shipments by Manufacturer shall include an accurate packing list, and all production
orders shall have a receipt confirmation.] All finished [Footwear] [Handbags] will be
returned to Designer no later than the cancellation date stated on the Production Ticket.
If they are not, Designer may cancel the order on the Production Ticket. No extensions of
time will be honored unless in writing and signed by Designer. Manufacturer
understands that Designer has made or will make commitments to its customers for
delivery of the completed [Footwear] [Handbags] on the basis of timely completion by
Manufacturer. Financial adjustments will be assessed for late deliveries as follows:
4.1 Shipments received by Designer 10 days or more late: 20% deduction from the
4.2 Shipments received by Designer 30 days or more late: 100% deduction from the
price (i.e., the shipment is of no value to Designer and Manufacturer
acknowledges and agrees it has harmed Designer and will provide it with credit of
____% of the purchase price for subsequent shipments.
These reductions are reasonable estimates of the costs which Designer would incur; these
costs are difficult to fix precisely.
5. Payment. The price is stated on the Production Ticket and is landed duty paid,
Designer’s warehouse in____________________. All unit prices include delivery to
Designer’s warehouse in________________, and all shipments, unless they are direct
shipments, will be sent there. [Payment will be made by letter of credit. If over shipment
is greater than 2%, and not approved by Designer, the unit price is reduced by 25% on all
units over the 2%.]
If Designer’s customers return [Footwear] [Handbags] because they are defective,
Manufacturer will be allowed to inspect them. Designer may deduct the full cost of such
[Footwear] [Handbags] from any outstanding invoice, if they are in part a result of
Manufacturer’s poor quality.
6. Approval of Work. "Defective" means [Footwear] [Handbags] which do not conform
strictly to the approved samples, are not strictly in the size scale specified, have not been
manufactured in accordance with the instructions provided by Designer, or are shaded
(e.g., a single [pair of footwear] has been assembled [and sewn] by Manufacturer with
production-work from different pieces of construction material, so that the pieces of the
construction material do not have identical color). Designer will not pay for [Footwear]
[Handbags] which are Defective. Manufacturer must deliver all [Footwear] [Handbags],
including Defective [Footwear] [Handbags].
A production run may be rejected if more than 10% of the ordered quantity is Defective
with a variety of minor defects. A production run may be rejected if more than 4% of the
ordered quantity is Defective with a variety of major defects. A production run will be
rejected if the [Footwear] [Handbags] have defects which make them unsafe. If an entire
production run is rejected by Designer, Manufacturer will refund the amount of the letter
of credit for its services on that production run. Designer will have no obligation to pay
Manufacturer for its services on that production run. If the inspection discloses defects in
excess of the established AQL (Acceptable Quality Level), Manufacturer will pay
Designer’s entire cost of a 100% inspection. If there are Defective [Footwear]
[Handbags] and Designer elects not to reject the production run, Designer may repair the
Defective [Footwear] [Handbags]. Manufacturer will pay for all cost incurred by
Designer to repair defective [Footwear] [Handbags].
7. Care of Samples, Trim, and [Footwear] [Handbags].
7.1 Manufacturer will keep the Designer samples, trim and patterns at its principal
business address and will not move them elsewhere without notifying Designer.
7.2 Manufacturer will insure the Designer [Footwear] [Handbags] as provided in
Section 18 below.
7.3 Upon request, Manufacturer will return all samples. If there is a dispute between
Designer and Manufacturer, and Designer pays the cost of all trim, patterns and
markers, Manufacturer will send the trim, patterns and markers to Designer.
7.4 Manufacturer will provide Designer a monthly report of inventory of: trim
bearing the Designer trademark, fabric and production run fabric within fifteen
(15) days of the end of each calendar month. Manufacturer will promptly provide
to Designer a weekly cutting activity report and, if so requested by Designer, a