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What Is A White Label Agreement?
The White Label strategy is one that is being used by many businesses — from electronics to foods and softwares.
The White Label concept involves one business providing goods or services which are then sold by another business under their own brand name.
These arrangements can be quite complex, so it is important to make sure that you have a comprehensive White Label Agreement in place to solidify these deals.Â
Why Do I Need a White Label Agreement?
A White Label Agreement is a contract between a reseller and a manufacturer.
It governs the manufacturer’s production process and also sets out the terms under which the reseller may brand the manufactured products.
Whether you’re the manufacturer or the reseller, it is important to have this agreement in place in order to secure your business deals.
But the White Label strategy is not limited to manufacturers and resellers.
For example, if you are a service provider and hire sub-contractors to help you provide services (but they operate under your brand name), this is considered White Labelling. And, yes, you’ll still need a White Label Agreement to make sure you’re adequately protected.
What Is Included In A White Label Agreement?
White Label Agreements typically address the following matters:
- Packaging: How will the manufactured products be packaged?
- Defects Rectification: If a product is faulty, is it the manufacturer or reseller who will rectify any product defects?
- Intellectual Property and Trade Marks: Will the manufacturer keep the ownership to the product or formulation? Will the reseller have to licence their trade marks to the manufacturer for packaging and promotion purposes?
- Liability Allocation: If any product defects lead to loss, is it the manufacturer or the reseller who will assume responsibility?
- Non Solicitation: If you’re White Labelling a business’ service, will they have access to your clients? This is where a Non Solicitation clause can protect you.
White Label Agreement Example
Fred has an online shop where he sells health food products that he makes himself. Fred wants to diversify the products he sells, but still wants to make sure customers are receiving good quality products under his brand.
Fred meets Jess, who makes vegan health food products and he wishes to White Label her products so he can offer his customers a vegan range.
Fred then gets Jess to sign a White Label Agreement. The agreement stipulates that Jess will provide her vegan health food products to Fred. The products will be packaged the same as Fred’s own products, and will have his logo and brand name over the packaging.
This formal writing is very important to ensure there are no misunderstandings that may potentially ruin business relationships.
Need Help With A White Label Agreement?
Having a properly drafted White Label Agreement is crucial — it helps set your expectations with your business partners, secures your payments, protects your intellectual property, and prevents you facing other legal risks.
However, if you don’t have legal experience, it can be hard to know whether you’ve got it right.
Having a lawyer help you draft a legally sound White Label Agreement will give you clarity around your engagement.
It’ll also relieve you from the stresses associated with the legal side of the business so you can focus on what you love to do!
If you’re looking for some information or looking to get a White Label Agreement written up, feel free to shoot us an email at team@sprintlaw.com.au or give us a call on 1800 730 617!
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