This model manufacture agreement is a sales-oriented framework for design, manufacture and delivery of products for integration into a final product or service, that must meet certain specifications
This model manufacture agreement prepared by the ITC is a framework for a so-called manufacture agreement, i.e. when Customer wishes Manufacturer, on a sales-characterised basis, to design, manufacture and deliver goods which Customer intends to integrate into its own final products or services, and therefore must meet certain specific requirements of Customer. If you need a manufacturing services agreement, you need to download the other template.
- This manufacture agreement template provides a series or menu of possibilities depending on the background and the nature of the production. Many provisions may not be relevant to the particular contract and should, if not relevant, be deleted.
- The model manufacturing agreement provides for a basic scheme, and two main options. The basic scheme is based on the assumption that Manufacturer is fully equipped and has the technology to produce conforming goods, in its position as most specialized party.
- The options, which do not exclude the basic scheme but may be combined with it and with each other, are tailored to cases in which (i) Customer has to supply Manufacturer with certain specific equipment or tooling (Article 1.5) and (ii) Customer has to transfer parts of its own technology to Manufacturer to enable him to finalize the products (Article 1.4).
- The manufacturing agreement template also covers the situation/option where the Parties have agreed that Manufacturer shall submit samples before production is launched (Article 1.6).
- These initial options may of course be adapted to the specific needs of the Parties, or deleted. They are not exclusive of each other and may be combined.
- Articles 1.4, 5 and 6 of the template manufacturing agreement deal with issues of intellectual property. It is assumed that the intellectual property rights are properly protected by appropriate registration. Moreover, Article 9 imposes a duty of confidentiality upon both parties, which should provide additional protection in particular if know-how is communicated by one party to the other. It is suggested to verify that the regime set out in Article 6 for improvements is acceptable in the light of any applicable anti-trust/competition law.
- The cooperation of the Parties might be a contract of duration. It is therefore important to establish the duration of the alliance (see Article 7.1). An option (not addressed in the model) could be that the contract has a specific term with subsequent renewal requiring mutual agreement.
- As far as the law applicable to the contract is concerned (Article 19), it is suggested to remind expressly that the UN Convention on the International Commercial Sale of Goods (CISG) does not apply to that type of agreement, “in which the preponderant part of the obligations of the party which furnishes the Goods consists in the supply of labour or other services” (Article 3 (2) CISG).
This ITC model manufacturing agreement is a general framework only and must be tailored to specific circumstances.
This model International Contract Manufacture Agreement can also be downloaded from the ITC website (if you download it here, you may not commercialize it.)