1.
INTERNATIONAL MANUFACTURING CONTRACT
1. Definition
2. Parties to the Contract
3. Main clauses
3.1 Appointment
3.2 Orders
3.3 Inspection and testing
3.4 Prices
3.5 Intellectual Property Rights
4. Law applicable
5. Model Contract
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2.
This contract is used when one company arranges for another
company in a different country to manufacture its products; in
other words, international subcontracting. The company which
subcontracts the manufacturing is usually based in a developed
country, and the manufacturer in a developing country.
The company provides the manufacturer with all the
specifications, and possibly also the materials necessary for the
manufacturing process. Similarly, the rights to industrial property
(patents, trademarks, industrial designs and utility models, etc.)
which are to be used for manufacturing the products, are granted
to the manufacturer for the term of the contract.
1. DEFINITION
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3.
Usually both parties are companies. For each party, the
following has to be included:
• Name of company, full address and nationality.
• Company type: public limited company, limited liability
company, etc.
• Name and position of company representative who signs
the agreement.
• Tax ID number of both parties.
2. PARTIES TO THE CONTRACT
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4.
Some of the most important clauses in the International
Manufacturing Contract are as follows:
• Appointment
• Orders
• Inspection and testing
• Prices
• Intellectual Property Rights
3. MAIN CLAUSES AND SAMPLE
See sample of International Manufacturing Contract
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5.
“The Company appoints the Manufacturer to manufacture the products.”
“The Manufacturer agrees to manufacture all products describe in Annex
1 of this Contract in accordance with orders issued by the Company and
to supply the products as set out in this Contract.”
“This Contract shall commence on the date written above and continue
for an initial period of ……… [6 or 12] months. It shall then continue for
further consecutive periods of ……… [6 or 12] months until terminated
by the Company at any time on one month’s written notice to expire at
the end of the initial or any subsequent period of …… [6 or 12] months.”
3.1 APPOINTMENT
See sample of International Manufacturing Contract

6.
3.2 ORDERS
“Each order for products shall be in writing and shall contain a detailed specification
to enable the Manufacturer to fulfil the order including any special requirements
and the date for delivery of the completed Products.”
“Unless otherwise agreed in writing when an order is placed, the terms and
conditions in this Contract will apply to it.”
“The Manufacturer will promptly confirm in writing receipt of each order and
confirm to the Company the delivery date of products based on the information
provided by the Company. Any discrepancy or omission in the information supplied
by the Company must be notified by the Manufacturer to the Company within
…… [3, 5, 7] calendar days of the date of each order.”
See sample of International Manufacturing Contract

7.
“Company shall be given access to The Manufacturer’s works during
ordinary working hours [8 am. to 6 pm.] on any working day, on ……
[3, 5, 7, 10] calendar days notice to enable it to inspect and attend tests
of the products during manufacture. Inspection will not constitute
acceptance of any products by the Company. The Manufacturer
will also allow access to customers or prospective customers of the
Company upon reasonable written notice being given.”
3.3 INSPECTION & TESTING
See sample of International Manufacturing Contract

8.
3.4 PRICES
See sample of International Manufacturing Contract
“The prices payable by the Company for products under this Contract shall
be agreed in writing between the Parties annually or at other agreed intervals.
The EXW (Ex Works) prices for products at the date of this Contract are set
out in the Annex of this contract. These prices are exclusive of VAT and other
taxes which will be payable in accordance with the Tax Laws in the countries
where the Company and the Manufacturer are based.”
“The prices include packing of all products. Transportation of each Product
to the destination established by Company will be the responsibility of
Manufacturer and the reasonable costs will be eimbursed by Company against
copies of invoices or other evidence of payment as required by Company.”

9.
“The Manufacturer acknowledges that all designs, specifications, trademarks,
copyright, patents, know-how and other Intellectual Property Rights in
the products, (together referred to as “IP Rights”) are the property of The
Company and The Manufacturer shall not acquire any rights or benefit
in Company’s IP Rights under this Contract, except a licence to use the IP
Rights for the purpose of this Contract while it remains in force.”
“The Manufacturer shall not either during this Contract or at any time after
its termination use or permit the use of any of the designs or specifications
or other IP Rights of the Company for the manufacture of any products for
any third Party.”
3.5 INTELLECTUAL PROPERTY RIGHTS
See sample of International Manufacturing Contract

10.
International Law standards are not applied to this type
of Contract.
The parties are free to submit any conflicts regarding the
agreement to International Arbitration or to the Laws of
the country of one of the parties. They will normally be
subject to the Laws of the country in which the products
are manufactured.
4. LAW APPLICABLE
See sample of International Manufacturing Contract

11.
In order to obtain the model contract in Word format and
the user guide, click on:
International Manufacturing Contract
5. MODEL CONTRACT
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