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This Contract for the Manufacture of Goods creates an agreement between a manufacturer of goods and another party. The agreement states that for a specified amount of compensation, the manufacturer will produce goods for the requesting party. This document in its draft form contains numerous of the standard clauses commonly used in these types of agreements, as well as optional language allowing for customization to ensure the specific terms of the parties' agreement are addressed. This document may be used by a manufacturer, or by a person or business that wants a manufacturer to produce goods.
This Contract for the Manufacture of Goods creates an agreement between a manufacturer of goods and another party. The agreement states that for a specified amount of compensation, the manufacturer will produce goods for the requesting party. This document in its draft form contains numerous of the standard clauses commonly used in these types of agreements, as well as optional language allowing for customization to ensure the specific terms of the parties' agreement are addressed. This document may be used by a manufacturer, or by a person or business that wants a manufacturer to produce goods. CONTRACT FOR MANUFACTURE OF GOODS THIS CONTRACT FOR MANUFACTURE OF GOODS (the “Agreement”) is made on this ________________ day of ___________, 20___ (the “Effective Date”) entered by and between ________________________, (hereinafter called the "CLIENT"), and ___________________________, (hereinafter called the “MANUFACTURER”). RECITALS: WHEREAS, the CLIENT is engaged in the business of _____________________________; WHEREAS, the MANUFACTURER is engaged in providing manufacturing services of ______________________ products; WHEREAS, subject to the terms and conditions of this Agreement, CLIENT desires to retain MANUFACTURER’s services and MANUFACTURER desires to provide such manufacturing services for the following Product(s) to the CLIENT: __________________________________. [Comment: describe the type of Product] (the “Product”) NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the CLIENT and the MANUFACTURER mutually agree as follows: 1. ENGAGEMENT A. The MANUFACTURER hereby agrees and undertakes to manufacture the said Products strictly in accordance with the know-how, standards and specifications as provided by the CLIENT and in compliance with the Product Specifications as described in Schedule I, which is attached hereto and made a part hereof (the “Product Specifications”). B. Both during the term and following termination of this Agreement, in perpetuity, MANUFACTURER shall not supply the Product or any prototype thereof, or any of the Product Specifications, to any third party whatsoever. 2. GRANT OF RIGHTS A. The CLIENT hereby grants to the MANUFACTURER the right to manufacture and package the Products and to use CLIENT's Know-how and Product Specifications in the process of manufacturing of the Products and to grant to its Affiliates the right to manufacture and package the Products and to utilize the know-how, subject to the terms of this Agreement. © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 2 B. The MANUFACTURER hereby grants to the CLIENT the exclusive right to use any improvements or technical developments of the Product which are developed by the MANUFACTURER after obtaining from CLIENT the know-how and the Product Specifications as required by this Agreement. Such right shall be royalty-free provided, however, that if the CLIENT does not elect to exercise such right in writing within _____ [Instruction: insert any number] ( ) days after the Manufacturer makes written disclosure to the CLIENT, the Manufacturer will be free to deal with others with respect to such right. 3. TERM This Agreement shall commence on the effective date and shall continue for an initial period of one (1) [Instruction: insert any number] year. Thereafter, this Agreement shall automatically renew for successive one (1) [Instruction: insert any number] year periods unless either party gives notice in writing, at least ninety (90) [Instruction: insert any number] days prior to the anniversary date of this Agreement, to the other party specifying its intention not to renew. 4. DISCLOSURE OF KNOW-HOW After the execution of this Agreement, the CLIENT will provide know-how, standards and specifications, which are to be complied with, to the MANUFACTURER. The CLIENT shall promptly inform the MANUFACTURER of any know-how thereafter acquired by the CLIENT. The MANUFACTURER shall be entitled to make and retain such notes and memoranda and such copies of papers relating to the CLIENT's know-how and Specifications as may be appropriate to enable the MANUFACTURER to utilize such know-how and Specifications in manufacturing the Product. All disclosures of the CLIENT's know-how shall be treated as Confidential Information as defined under this Agreement and shall not be disclosed to others. 5. PRODUCT FORECAST CLIENT will provide an annual twelve (12) [Instruction: insert any number] month forecast and a six (6) [Instruction: insert any number] month rolling Product forecast to MANUFACTURER by the ________ business day of each calendar month. Any such information provided by CLIENT to MANUFACTURER shall be treated as Confidential Information 6. MATERIAL PROCUREMENT MANUFACTURER is authorized to purchase materials using standard purchasing practices including, but not limited to, acquisition of material by recognizing Economic Order Quantities and long lead time component management in order to meet the forecasted requirements of CLIENT. CLIENT is responsible for material to the extent that (i) material was purchased by MANUFACTURER to support the Product forecast and agreed upon safety stock; (ii) MANUFACTURER exercised reasonable business judgment in managing suppliers and lead © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 3 times and _____________________________________. [Comment: add any additional provisions] 7. PURCHASE ORDER A. The Manufacturer shall perform the work as described in the attached Product Specification and within the requirements as detailed in the Product Specification and in accordance with the terms and conditions of this Agreement. The CLIENT will authorize the Manufacturer to perform the work by issuing a purchase order(s) (the “Order”). B. CLIENT shall issue a purchase order for each lot of product purchased, and shall order in minimum quantities of _____ [Instruction: insert any number] (“Units”). C. CLIENT shall have the authority to revise or cancel a purchase order and may also eliminate a component from the Product. However if any such revision or cancellation of a purchase order, or elimination of a component by CLIENT causes any loss to the MANUFACTURER, CLIENT agrees to compensate MANUFACTURER for costs incurred for: finished goods (including profit); work in process (including labor performed); material on hand which could not be returned or used for other clients and at other sites of MANUFACTURER; material on order which could not be canceled; applicable material supplier's restocking or cancellation fees; and agreed MANUFACTURER handling charges. D. Any and all agreements in connection with the work entered into by the MANUFACTURER with subcontractors shall include the terms and conditions of this Agreement which govern the MANUFACTURER. No provision of such agreement shall be construed as an agreement between the CLIENT and the subcontractors. The MANUFACTURER shall be responsible for the acts or neglect of any of its subcontractors. 8. PRICING CLIENT shall pay for the manufacturing services provided by the MANUFACTURER in accordance with the Pricing Schedule attached hereto (Schedule II). 9. PROPRIETARY RIGHTS MANUFACTURER acknowledges that it has no right to or interest in the Product resulting from the manufacturing services performed hereunder. The MANUFACTURER acknowledges that the Product has been specially commissioned or ordered by the CLIENT and that the CLIENT is therefore to be deemed the owner of all rights and interest to the Product. 10. WARRANTY A. MANUFACTURER warrants and represents that it has the requisite and necessary experience, all necessary licenses and permits, equipment, facilities and personnel to © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 4 properly perform the manufacturing services in accordance with the Product Specifications. B. MANUFACTURER agrees to use its best efforts and all due diligence to manufacture the Products in accordance with the Product Specifications. MANUFACTURER warrants for a period of ______ [Instruction: insert any number◊] months from shipment that all Products sold to CLIENT shall be free from any defects in MANUFACTURER design, materials, and workmanship, and are free of all liens, claims and encumbrances of any kind. C. MANUFACTURER has the corporate and legal right to enter into this Agreement and is not a party to any other Agreement that would in any way conflict with, or restrict, its ability to perform the manufacturing services. D. MANUFACTURER represents and warrants that the MANUFACTURER will not, without the prior written consent of the CLIENT, sell or distribute the Products. E. MANUFACTURER further warrants that during the warranty period MANUFACTURER assumes full responsibility for the repair or replacement of Products. F. MANUFACTURER shall have no responsibility or obligation to CLIENT under warranty claims with respect to Products that have been subjected to abuse, misuse, accident, alteration, neglect or unauthorized repair. G. THE WARRANTIES CONTAINED IN THIS SECTION ARE IN LIEU OF, AND MANUFACTURER EXPRESSLY DISCLAIMS AND CLIENT HEREBY WAIVES ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR ARISING BY COURSE OF DEALING OR PERFORMANCE, CUSTOM, USAGE IN THE TRADE OR OTHERWISE, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE AND FITNESS FOR A PARTICULAR USE. 11. QUALITY A. It is an express condition of this Agreement that at all times during the period of this Agreement the MANUFACTURER shall ensure that the Products shall satisfactorily meet the requirements for good manufacturing practice. B. The Manufacturer warrants to the CLIENT that all Products delivered hereunder shall comply with the specifications agreed to between the parties from time to time. If any of the Products is found not to comply with the specifications, the CLIENT shall have the right to demand replacement and to return the defective quantity to the MANUFACTURER at MANUFACTURER's expense. © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 5 C. In the event that the CLIENT and MANUFACTURER do not agree on whether the Products meet the specifications established by the CLIENT, the matter shall be submitted for review to an independent testing laboratory mutually acceptable to the MANUFACTURER and CLIENT. The determination of such independent test laboratory shall be binding on both parties. The cost of the independent testing laboratory shall be borne by the party whose testing results were in error. 12. DEFECTIVE PRODUCTS A. The CLIENT may inspect the Products within a reasonable time after delivery. The CLIENT may return such non-conforming Products to the MANUFACTURER at the MANUFACTURER's risk and expense. B. MANUFACTURER shall within two weeks of receipt of such returned products provide a report to CLIENT detailing those Products accepted under warranty and any that are not accepted under warranty due to physical damage or improper use. MANUFACTURER will use its best efforts to repair defective products within four (4) [Instruction: insert any number◊] weeks from receipt of the returned product. C. Shipment of the repaired or replaced warranted products to CLIENT’s location shall be at the expense of MANUFACTURER. Shipment of the repaired or replaced non- warranted products shall be at the expense of CLIENT. In the event a product modification shall become necessary, MANUFACTURER shall make such modifications, as approved by CLIENT, at a separate cost borne by CLIENT. D. Payment for the manufacturing services by the CLIENT shall not constitute an acceptance of the Products nor impair the CLIENT's right to inspect or any of its other remedies. 13. PRODUCTION TOOLING AND FIXTURES. A. All CLIENT production tooling/equipment furnished to MANUFACTURER or paid for by CLIENT in connection with this Agreement shall be clearly marked and remain the personal property of CLIENT and be kept free of liens and encumbrances. B. Unless otherwise agreed, CLIENT is responsible for the general and periodic maintenance of CLIENT tooling/equipment. 14. REGULATORY APPROVALS Prior to manufacturing any Products, the CLIENT shall give all necessary notices, obtain all regulatory approvals, registrations, necessary permits and licenses and pay all the fees related to the performance of the work. Furthermore, the MANUFACTURER shall provide to the © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 6 CLIENT, copies of all certificates necessary as evidence that the work conforms to the laws and regulations of all authorities having jurisdiction. 15. TRADEMARKS A. The MANUFACTURER shall apply CLIENT’s trademarks, trade names, logos etc. (collectively ‘Marks’) on the Products and/or the labels and/or the packages which are to be supplied to CLIENT pursuant to this Agreement. Such usage of the Marks shall be in accordance with the directions of the CLIENT. B. MANUFACTURER shall not use, nor shall have the right to use the Marks in connection with or in relation to any other product of whatsoever nature made or dealt with by the MANUFACTURER except for the Products supplied to the CLIENT. C. The MANUFACTURER hereby warrants that it shall not use the said Mark in any manner which may jeopardize the significance, distinctiveness or validity of the said Mark. D. Nothing herein shall at any time during the term or after the expiration of this Agreement give or shall be intended to give or confer upon the MANUFACTURER any right, title, interest or claim in or to the said Mark which shall continue to vest solely and absolutely in favor of the CLIENT. E. Each party shall defend, indemnify, and hold harmless the other party from any claims by a third party of infringement of intellectual properties resulting from the acts of the indemnifying party pursuant to this Agreement, provided that the other party (i) gives the indemnifying party prompt notice of any such claims, (ii) renders reasonable assistance to the indemnifying party thereon, and (iii) permits the indemnifying party to direct the defense of the settlement of such claims. 16. PRODUCT LIABILITY Each Party shall notify the other promptly in writing of any product liability claim brought with respect to the Product based on alleged defects in the design, manufacture, packaging, or labeling of the Product or other adverse claim regarding the Product. Upon receiving such written notice, CLIENT shall assume and have sole control of the defense of any such claim, including the power to conduct and conclude any and all negotiations, compromises or settlements. MANUFACTURER shall promptly comply with all reasonable requests from CLIENT for information, materials or assistance with respect to the conduct of such defense. 17. DELIVERY and SHIPMENT. The delivery of each Order shall be made to the address as specified in the Order and within the time as specified in the Order. All risk or loss after shipment by MANUFACTURER is borne by © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 7 CLIENT. Upon learning of any potential delivery delays, MANUFACTURER will notify CLIENT as to the cause and extent of such delay. If MANUFACTURER fails to make deliveries at the specified time and such failure is caused by MANUFACTURER, MANUFACTURER will, at no additional cost to CLIENT, employ accelerated measures such as material expediting fees, premium transportation costs, or labor overtime required to meet the specified delivery schedule or minimize the lateness of deliveries. 18. CONFIDENTIAL INFORMATION A. Both MANUFACTURER and CLIENT shall maintain as confidential, and not to disclose to third parties or use for its own benefit, any specifications, drawings, blueprints, flow charts, reports, data, business information, trade secrets, manufacturing processes, or other confidential information of the other party which MANUFACTURER or CLIENT, as the case may be, learns or acquires by virtue of this Agreement, except that MANUFACTURER or CLIENT may disclose confidential information pursuant to the order or requirement of a court, administrative agency, or other governmental body, and for disclosures required to be made pursuant to United States Securities Law. Both parties must notify the other party in writing of the need for such disclosure in advance of any such disclosure being made and MANUFACTURER and CLIENT further agree to use reasonable efforts to protect the confidential information against disclosure to unauthorized persons. B. MANUFACTURER may disclose confidential information to MANUFACTURER's personnel who have a need to know and legal duty to protect such confidential information. At CLIENT’s written request, MANUFACTURER agrees to destroy or otherwise dispose of all confidential information, except as prohibited by regulatory or safety agencies. C. The confidential information shall not include information which is in the public domain at the time of disclosure or afterward, except where such information becomes public due to a breach by the disclosing party of its obligations hereunder, nor shall the term confidential information in possession at the time of disclosure or which may be disclosed by third party having the right to disclose the same. 19. TERMINATION A. If either party is in material breach or default of one or more of the terms and conditions of this Agreement, MANUFACTURER and CLIENT agree to negotiate in good faith to resolve such default. If the defaulting party fails to cure such default within thirty (30) [Instruction: insert any number◊] days following notice of default, the non-defaulting party shall have the right to terminate this Agreement by furnishing the defaulting party with thirty (30) [Instruction: insert any number] days written notice of termination. © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 8 B. This Agreement shall immediately terminate if either party; (i) become insolvent; (ii) enter into or file a petition, or proceeding seeking an order for relief under the bankruptcy laws of its respective jurisdiction; (iii) enter into a receivership of any of its assets or; (iv) enter into a dissolution of liquidation of its assets or an assignment for the benefit of its creditors. C. Either MANUFACTURER or CLIENT may terminate this Agreement without cause by giving ninety (90) [Instruction: insert any number] days advance written notice to the other party. 20. FORCE MAJEURE Any failure or delay by a party in the performance of its obligations under this Agreement is not a default or breach of the Agreement or a ground for termination under this Agreement to the extent the failure or delay is due to elements of nature or acts of God, acts of war, terrorism, riots, revolutions, or strikes, labor troubles, or other factor beyond the reasonable control of a party (each, a "Force Majeure Event"). The party failing or delaying due to a Force Majeure Event agrees to give notice to the other party which describes the Force Majeure Event and includes a good faith estimate as to the impact of the Force Majeure Event upon its responsibilities under this Agreement, including, but not limited to, any scheduling changes. However, should any failure to perform or delay in performance due to a Force Majeure Event last longer than thirty (30) days, the party not subject to the Force Majeure Event may terminate this Agreement by notice to the party subject to the Force Majeure Event. 21. DISPUTE RESOLUTION If any dispute arises, the parties will try in good faith to settle the same through mediation conducted by a mediator to be mutually selected. The parties will share the costs of the mediation equally. Each party will cooperate fully and fairly with the mediator and will attempt to reach a mutually satisfactory compromise to the dispute. If the dispute is not resolved within 30 days after it is referred to the mediator, it will be arbitrated by arbitrator in accordance with the rules of the American Arbitration Association (AAA) under its jurisdiction in the state of _______________ before a single arbitrator. Judgment on the arbitration award may be entered in any court that has jurisdiction over the matter. Costs of arbitration, including lawyers’ fees will be allocated by the arbitrator. 22. LIMITATION OF LIABILITY IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY, OR TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, PRODUCT LIABILITY, OR OTHERWISE, SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY DAMAGES OF ANY KIND WHETHER OR NOT EITHER PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 9 23. INSURANCE A. The MANUFACTURER shall at its cost take a comprehensive insurance policy for _________ dollars ($ ________________) to cover all the raw and packaging materials, stocks in process and finished products against theft, fire, riots, civil commotion, natural calamities, including floods. B. Each party to this Agreement will maintain insurance to protect itself from claims (i) by the party's employees, agents and subcontractors under Worker's Compensation and Disability Acts, (ii) for damages because of injury to or destruction of tangible property resulting out of any negligent act, omission or willful misconduct of the party or the party's employees or subcontractors, (iii) for damages because of bodily injury, sickness, disease or death of its employees or any other person arising out of any negligent act, omission, or willful misconduct of the party or the party's employees, agents or subcontractors. 24. RELATIONSHIP BETWEEN CLIENT AND THE MANUFACTURER MANUFACTURER acts as an independent contractor and is not an agent or employee of the CLIENT. MANUFACTURER is not authorized to act on behalf of CLIENT and is not authorized to negotiate, execute any agreement on behalf of the CLIENT. The MANUFACTURER shall not use CLIENT’s name in any public advertising or similar activities without CLIENT’s prior written consent. 25. NON-COMPETITION MANUFACTURER hereby agrees that during the term of this Agreement, and for a period of two (2) [Instruction: insert any number] years following termination hereof, shall not: A. directly or indirectly engage in any Competitive Business B. assist others in engaging in any Competitive Business or C. develop, enhance, produce, market, promote or support, or render consulting or other services to a third party with respect to, a similar Product having substantially similar functionality to the Product. 26. INJUNCTIVE RELIEF MANUFACTURER acknowledges and agrees that the obligations and promises of MANUFACTURER under this Agreement are of a unique, special and intellectual nature giving them particular value. MANUFACTURER further acknowledges and agrees that MANUFACTURER 's breach of any of the promises or covenants contained in this Agreement, © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 10 will result in irreparable and continuing damage to CLIENT for which there will be no adequate remedy at law and, in the event of such breach, CLIENT, in addition to its rights of termination set forth herein, will be entitled to seek injunctive relief, or a decree of specific performance, or both, and such other and further relief as may be proper including monetary damages if appropriate. 27. AMENDMENTS No amendment, modification or supplement to this contract shall be binding unless it is in writing, signed by a corporate officer or his authorized representative. 28. NOTICES All notices under this Agreement shall be in writing and shall be deemed given: A. when personally delivered; or B. when sent by confirmed fax or facsimile; or C. when sent by confirmed e-mail; or D. when sent by pre-paid first class post to the address mentioned below: If to MANUFACTURER: ____________________________ ____________________________ If to CLIENT : ____________________________ ____________________________ or such other address as such Party may hereafter specify. 29. NO PUBLICITY MANUFACTURER will not, without the prior written consent of the CLIENT, in any manner disclose information about the existence of this Agreement, including its value, or its terms and conditions, through any media including but not limited to, the issuance of any news or press releases, announcement, denial, or confirmation, all of which shall be treated as Confidential Information. Nothing in this Agreement implies that CLIENT will agree to any such publicity. 30. GOVERNING LAW © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 11 The provisions of this Agreement shall be governed by the laws of the state of _____________, regardless of conflict of laws. 31. WAIVE OF BREACH No waiver by either party of any breach of any of the covenants or conditions herein contained, performed by the other party, shall be construed as a waiver of any succeeding breach of the same or of any other covenant or condition. 32. ASSIGNMENT Neither party may delegate, assign or transfer its rights or obligations under this Agreement, whether in whole or part, without the written consent of the other party. 33. DESCRIPTIVE HEADINGS The descriptive headings herein are inserted for convenience purpose and for reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. 34. ENTIRE AGREEMENT The parties agree that this constitutes the entire agreement and there are no further items or provisions, either oral or otherwise. MANUFACTURER agrees that it has not relied upon any representations of CLIENT as to prospective performance of the goods, but has relied upon its own inspection and investigation of the subject matter. [SIGNATURE PAGE TO FOLLOW] © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 12 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above __________________ (“CLIENT”) _____________ (the “MANUFACTURER”) By: _______________________ By: ______________________ © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 13 SCHEDULE I PRODUCT SPECIFICATIONS 1. ________________________________________________________ 2. ________________________________________________________ 3. ________________________________________________________ 4. ________________________________________________________ 5. ________________________________________________________ © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 14 SCHEDULE II PRICING 1. ________________________________________________________ 2. ________________________________________________________ 3. ________________________________________________________ 4. ________________________________________________________ 5. ________________________________________________________ © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 15
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