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Whether you manufacture products yourself, or have an idea and want someone to bring it to life, you’ll need a Manufacturers Agreement to make sure your business is protected.
Manufacturers Agreements are important when you’re creating clothes, furniture, electronics or anything else.
They can be used when manufacturers create products and sell them to customers, or when businesses have ideas and want manufacturers to create them.
Either way, it is important that both the manufacturer and the customer are aware of their roles and responsibilities. This is where a Manufacturers Agreement is useful!
What’s In It?
Some terms that may be included in a Manufacturers Agreement include:
- Term: the period of time for which the manufacturing arrangement lasts
- Manufacturing process: details of the manufacturing process, including the design of the goods and materials used
- Payment: on what basis will the manufacturer be paid?
- Delivery: on what basis will the goods be delivered to the customer? For example, will it be a fortnightly or monthly delivery?
- Minimum order: manufacturers might dictate a minimum number of orders or purchase amount over a particular period of time
- Sub-contracting: this will relate to whether manufacturers are able to contract their work to sub-contractors
- Exclusivity: whether the relationship between the manufacturer and the customer is exclusive or non-exclusive
- Intellectual Property (IP) protection: this is to ensure your product designs and manufacturing processes are protected
- Defects rectification: who is responsible in the case of any defects in manufactured products? Is it the manufacturer or the business that designed the product?
- Liability allocation: in the case of product defects, it is important to establish how the liability is allocated
Example
Jim has a business where he redistributes hand sanitiser. Jim has designed a new hand sanitiser dispenser that he believes will become very popular.
Jim realises he does not have the means to mass produce this product, so he engages a manufacturing company to create his product.
Jim gets a Manufacturers Agreement to make sure that the manufacturing company doesn’t steal his designs, and delivers the goods in a timely manner.
Need Help?
Whether you’re a manufacturer or a business with an idea, it is important to have a Manufacturers Agreement to make sure that your products are created in an efficient and timely manner.
It can seem like a daunting task, but Sprintlaw has helped many businesses bring their business goals and products to life. Get in touch with us at team@sprintlaw.com.au to find out more!
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