Development and manufacturing agreement

About this development and manufacturing agreement

Most agreements like this are for the customer to initiate and control. This one is for the manufacturer to set down the terms he wants. It covers the structure of a complicated deal in simple terms you can edit yourself. The deal is that you agree to make up prototypes and complete any necessary design work, get it approved by your customer and regulatory authorities, then make it up to your customer’s order to the agreed standards.

It protects you very fully and makes sure you get paid.

We cannot hope to think up the specification for every possible product. We leave it to you to provide your specification for design work, finished product and standards to be achieved along the way. We assume you will do this in conjunction with your customer so as to create a full specification which can be attached to the agreement.

Key features

• Favours the manufacturer, not the designer/customer, so puts you in the driving seat
• Takes you logically through the practical provisions you will need
• Assumes your intellectual property is of great value and must be protected
• Suitable for a contract with foreign customer
• Retention of title provision

Contents of this development and manufacturing agreement

Some of the most important provisions are likely to be:

• Scope of work - what exactly is the deal
• Design reviews, product testing and quality assurance
• Setup costs and payment for product development - who pays?
• Production price, payment
• Use of sub-contractors
• Delivery and international transport options - Incoterms
• Sales taxes and withholding taxes
• Risk and retention of title
• Confidential Information, including your intellectual property
• Protecting your own IP
• Rules for publicity and / or announcements