Manufacturing Supply Agreement
Manufacturing Supply Agreement
This Manufacturing Supply Agreement ("Agreement") is entered into as of the [Effective Date] by and between [Your Company Name], a corporation duly organized and existing under the laws of [State], with its principal office located at [Your Company Address] ("Buyer"), and [Supplier's Company Name], a corporation duly organized and existing under the laws of [State], with its principal office located at [Supplier's Company Address] ("Supplier").
This Agreement governs the terms and conditions under which Supplier agrees to manufacture and supply products to Buyer. Both parties are committed to establishing a mutually beneficial relationship, ensuring the efficient manufacturing process, high-quality products, and timely deliveries.
1. Definitions
For the purposes of this Agreement, the following terms shall have the meanings set forth below:
1.1 "Products"
The term "Products" refers to the items or goods to be manufactured and supplied by Supplier, as described in Exhibit A. This includes, but is not limited to, raw materials, components, and finished goods. Additionally, the term encompasses any modifications, updates, or future versions of such items as may be agreed upon by both parties. In the event that Buyer requests a change or upgrade to the Products, the revised specifications will be jointly agreed upon in writing by both parties.
1.2 "Order"
An "Order" refers to any written request made by Buyer to Supplier for the manufacturing and supply of Products under the terms of this Agreement. An Order will specify the quantities, specifications, delivery dates, and other relevant terms such as packaging requirements, shipping instructions, and any applicable special handling instructions. The Order shall be considered a binding document once confirmed by Supplier.
1.3 "Delivery Date"
The "Delivery Date" refers to the agreed-upon date for the delivery of Products as specified in an Order. If there is any change to the delivery schedule due to unforeseen circumstances, both parties shall communicate promptly to agree on a new Delivery Date. This will be done in writing, and the Supplier will strive to minimize delays.
1.4 "Confidential Information"
"Confidential Information" includes all non-public information, whether written or oral, that is disclosed by one party to the other during the course of this Agreement and is identified as confidential or proprietary. This includes, but is not limited to, product designs, manufacturing processes, marketing strategies, customer lists, and financial data. The receiving party shall take all necessary precautions to protect the confidentiality of such information and shall not disclose it to third parties unless required by law or expressly authorized in writing by the disclosing party.
1.5 "Force Majeure"
"Force Majeure" refers to any event beyond the reasonable control of either party that prevents or delays the performance of this Agreement. This includes, but is not limited to, natural disasters (such as hurricanes, floods, earthquakes), war, terrorism, labor strikes, supply chain disruptions, pandemics, and government actions or restrictions. Both parties agree to notify the other party as soon as possible if a Force Majeure event occurs and will work together to resolve the situation in the most efficient manner possible.
2. Scope of Agreement
2.1 Manufacturing of Products
Supplier agrees to manufacture and supply the Products to Buyer in accordance with the specifications and quantities provided in the Orders placed by Buyer. The manufacturing process shall comply with industry standards and regulatory requirements. Supplier shall use commercially reasonable efforts to ensure the Products are produced in a timely and cost-effective manner. All Products shall undergo rigorous quality control processes before delivery.
2.2 Exclusive or Non-Exclusive Supply
This Agreement shall be considered exclusive with respect to the manufacturing and supply of the Products. If the Agreement is exclusive, Supplier agrees not to supply the same or similar products to any third parties within the agreed territory during the term of this Agreement. Conversely, if it is non-exclusive, Supplier may continue to supply the same products to other buyers, but shall prioritize fulfilling Buyer’s Orders as outlined in this Agreement.
2.3 Product Modifications
In the event that Buyer requires modifications to the Products, Buyer shall submit a written request specifying the modifications. Supplier agrees to assess the feasibility of such modifications and provide an updated timeline and cost estimate. Both parties will mutually agree upon any changes to the terms of the Order, including price adjustments, additional manufacturing steps, or changes in delivery schedules. Any modifications agreed upon shall be incorporated into the existing Agreement, and the revised specifications shall supersede prior versions.
2.4 Forecasts and Orders
Buyer shall provide Supplier with forecasts for Product demand on a quarterly basis, which will help Supplier plan for production. The forecast shall be non-binding but will serve as a guide for production planning. Supplier is expected to accommodate any reasonable increase or decrease in demand based on Buyer’s forecast, provided the adjustments are communicated with reasonable notice. Buyer shall place formal Orders based on the forecast or on an as-needed basis.
|
Order Type |
Description |
Minimum Quantity |
|---|---|---|
|
Initial Order |
First order placed by Buyer |
100 units |
|
Ongoing Orders |
Subsequent orders placed after the initial order |
200 units per month |
|
Special Orders |
Custom or one-time orders |
Negotiated on case basis |
3. Product Pricing and Payment Terms
3.1 Pricing
The price for each Product shall be as set forth in Exhibit B. Prices may be adjusted annually based on mutually agreed upon factors such as raw material costs, labor rates, and inflation. If any significant price changes are necessary, Supplier must notify Buyer at least [90] days in advance. Any adjustments to the prices shall be documented in writing and agreed upon by both parties before they take effect.
|
Product Name |
Price per Unit ($) |
Effective Date |
|---|---|---|
|
Product A |
$50 |
January 1, 2050 |
|
Product B |
$30 |
January 1, 2050 |
3.2 Payment Terms
Payments for Products supplied under this Agreement will be due within [30] days from the date of invoice, unless otherwise agreed upon in writing. Late payments will incur an interest charge of [1.5]% per month on the outstanding balance. Payments should be made via wire transfer to the account specified by Supplier, and Buyer is responsible for any bank fees associated with the transfer.
|
Payment Term |
Description |
|---|---|
|
Standard Payment |
Payment within 30 days of invoice date |
|
Early Payment |
5% discount for payment within 10 days |
|
Late Payment |
1.5% interest per month on overdue invoices |
3.3 Currency
All payments under this Agreement shall be made in U.S. Dollars ($). Any conversion of currency for international transactions shall be at the exchange rate published on the date of payment, as quoted by a Financial Institution. If currency fluctuations cause significant discrepancies in payments, both parties agree to renegotiate the payment terms or review the agreed-upon prices to reflect such changes.
4. Delivery and Shipping
4.1 Delivery Responsibilities
Supplier shall deliver the Products to Buyer’s designated location, as specified in the relevant Order. Delivery shall be made in accordance with the agreed Delivery Dates. Supplier will also provide Buyer with tracking information for shipments upon dispatch. In case of delivery delays, Supplier shall inform Buyer promptly, including the expected revised Delivery Date.
4.2 Delivery Costs
The costs for shipping and delivery of the Products shall be borne by Supplier. Delivery charges may include freight, insurance, customs duties, and taxes, if applicable. If Buyer is responsible for shipping costs, Supplier shall provide Buyer with a breakdown of the shipping costs upon request. In the case of international shipments, Buyer is also responsible for any applicable import duties or taxes.
4.3 Risk of Loss
The risk of loss for the Products shall transfer from Supplier to Buyer upon delivery to the designated location. Until the risk is transferred, Supplier is responsible for any damages to or loss of the Products during transport. If any Products are damaged or lost before delivery, Supplier shall replace or repair the damaged Products at no additional cost to Buyer.
4.4 Delayed Deliveries
In the event of a delayed delivery, Supplier shall notify Buyer as soon as possible and provide a revised delivery schedule. If the delay exceeds [30] days, Buyer may terminate the Order without penalty and request a refund or alternative arrangements for the supply of Products. Buyer may also claim compensation for any direct losses caused by the delay, as long as they are a result of Supplier’s negligence.
5. Quality Assurance
5.1 Product Standards
Supplier warrants that the Products will meet the specifications outlined in Exhibit A and will be free from defects in materials and workmanship. All Products shall conform to applicable regulatory standards and certifications, including but not limited to ISO standards, safety regulations, and environmental compliance laws. Supplier will maintain adequate records to demonstrate compliance with these standards.
5.2 Inspections and Testing
Buyer may inspect and test the Products upon delivery to ensure compliance with quality standards. Any Product that fails to meet specifications shall be promptly replaced by Supplier at no cost to Buyer. If any discrepancies are found, Buyer will provide Supplier with a detailed report of the issues, and Supplier will take corrective action, including potential rework, replacement, or refunds.
|
Quality Check Type |
Description |
Inspection Timeframe |
|---|---|---|
|
Visual Inspection |
Inspect for visible defects |
24 hours after delivery |
|
Functional Testing |
Ensure Product works as expected |
48 hours after delivery |
|
Packaging Review |
Check for packaging integrity |
24 hours before shipment |
5.3 Warranty
Supplier guarantees the Products for a period of [12] months from the date of delivery. Any Products found to be defective within this period shall be repaired or replaced at Supplier's expense. The warranty does not cover damage caused by improper use, handling, or storage after delivery.
6. Intellectual Property
6.1 Ownership of Intellectual Property
Each party retains ownership of its respective intellectual property, including patents, trademarks, and trade secrets. No license or rights are granted by this Agreement unless explicitly stated. If any new intellectual property arises from collaboration between the parties, the ownership and licensing terms will be determined in a separate written agreement.
6.2 Use of Trademarks
Neither party shall use the other’s trademarks without prior written consent. However, Buyer may use Supplier’s trademarks for the purpose of marketing the Products, subject to Supplier's approval of the promotional materials. All marketing efforts shall reflect the quality and integrity of the Products.
6.3 Confidentiality
Both parties agree to keep all Confidential Information received from the other party in strict confidence and not disclose it to third parties unless required by law or expressly authorized in writing by the disclosing party. This obligation of confidentiality will remain in effect even after the termination or expiration of this Agreement.
7. Term and Termination
7.1 Term
This Agreement shall be effective for a period of [5] years from the Effective Date, unless terminated earlier in accordance with the provisions of this Agreement. The Agreement may be extended by mutual written agreement of the parties.
7.2 Termination for Convenience
Either party may terminate this Agreement for convenience by providing [90] days' written notice to the other party. Termination will not affect any Orders that are in progress at the time of termination, and the obligations related to any pending Orders will remain in full force until completion.
7.3 Termination for Cause
Either party may terminate this Agreement immediately for cause if the other party fails to perform its obligations and such failure is not cured within [30] days after written notice of the failure. Grounds for termination for cause may include repeated failure to meet quality standards, failure to pay invoices, or violation of the terms related to intellectual property.
8. Force Majeure
8.1 Events of Force Majeure
Neither party shall be liable for delays or non-performance caused by Force Majeure events. These events include, but are not limited to, war, natural disasters, labor strikes, supply chain disruptions, pandemics, and government actions or restrictions. Both parties agree to notify the other party as soon as possible if a Force Majeure event occurs and will work together to resolve the situation in the most efficient manner possible.
8.2 Notification and Mitigation
The affected party must promptly notify the other party of the Force Majeure event and take reasonable steps to mitigate the impact. The performance of the affected party will be excused for the duration of the Force Majeure event. If the Force Majeure event persists for more than [90] days, either party may terminate the Agreement without penalty.
9. Miscellaneous
9.1 Governing Law
This Agreement shall be governed by and construed in accordance with the laws of [State], without regard to its conflict of law principles. Any legal disputes arising under this Agreement shall be resolved according to the local jurisdiction’s laws.
9.2 Dispute Resolution
Any dispute arising out of or relating to this Agreement shall be resolved through binding arbitration in [Location], under the rules of the Arbitration Organization. Both parties agree to participate in good faith to resolve disputes amicably before resorting to arbitration.
9.3 Entire Agreement
This Agreement, including all exhibits and attachments, constitutes the entire agreement between the parties and supersedes any prior agreements or understandings, whether oral or written. Any previous agreements are no longer binding and are considered void upon the signing of this Agreement.
9.4 Amendments
No amendment or modification of this Agreement shall be valid unless in writing and signed by both parties. Any changes to the Agreement must be discussed and agreed upon before they take effect.
9.5 Severability
If any provision of this Agreement is found to be invalid or unenforceable, the remainder of the Agreement shall remain in full force and effect. The parties agree to negotiate in good faith to replace the invalid provision with a valid one that reflects the original intent as closely as possible.
IN WITNESS WHEREOF, the parties have executed this Manufacturing Supply Agreement as of the [Effective Date].
For [Your Company Name]:
Name: [Name]
Title: [Title]
Date: [Date]
For [Supplier's Company Name]:Name: [Name]
Title: [Title]
Date: [Date]
