Manufacturing Agreements: Essential Legal Framework

In Short

• Manufacturing agreements set clear expectations on specifications, quality, delivery, pricing and approvals, helping to avoid disputes.
• They allocate risk and responsibility, including for consumer law compliance, liability, IP ownership and confidentiality.
• Well-drafted agreements protect your business throughout the manufacturing relationship, including on termination.

Tips for Businesses

Before signing a manufacturing agreement, clearly document your product specifications, approval processes and pricing structure. Make sure ownership of designs and confidential information is explicit, especially if you plan to change manufacturers later. Remember you cannot contract out of consumer law obligations, so include practical processes for inspections, defect rectification and compliance to reduce risk.