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INTERNATIONAL MANUFACTURING CONTRACT - Contract Template and Sample

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The International Manufacturing Contract is used when one company arranges for another company in a different country to manufacture its products; in other words, international subcontracting.

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INTERNATIONAL MANUFACTURING CONTRACT - Contract Template and Sample

  1. 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 www.globalnegotiator.com
  2. 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 www.globalnegotiator.com
  3. 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 www.globalnegotiator.com
  4. 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 www.globalnegotiator.com
  5. 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. 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. 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. 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. 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. 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. 11. In order to obtain the model contract in Word format and the user guide, click on: International Manufacturing Contract 5. MODEL CONTRACT www.globalnegotiator.com

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