Manufacturing Agreements – Scenarios

Our team has previously assisted a manufacturer in the food industry to negotiate a manufacturing agreement with a customer that required food products to be produced to a certain specification. The customer provided detailed specifications of the product and packaging. The customer also had strict quality control measures and intended to carry out the quality testing themselves.

The parties’ agreement regarding delivery was that the manufacturer would leave the finished product at the disposal of the customer once the production was completed. Our client was not responsible for loading the product for transportation off its premises. The risk in the finished product therefore transferred to the customer upon notification from our client that the manufacturing process was complete, and the product was ready for collection.

In view of this, we reviewed the contract to satisfy ourselves that it was clear on these agreed terms. Our team made necessary changes to the concerned clauses to correctly reflect what was agreed. Our team negotiated that the manufacturer client be excluded from liability where they manufacture and store the product according to the strict specifications and requirements provided by the customer and where they notify the customer that the product was ready for collection, but the customer fails or delays to take delivery.

We found that the main agreement and the various schedules it contained had contradicting terms, and it was our job to ensure they were aligned; we flagged the inconsistencies to the client with suggested amendments. As the whole agreement was long and the schedules many, we meticulously reviewed the documents and organised our work so well that our client could easily cross-reference the contradicting terms among the documents and easily follow the review process. Our client was happy and stated that we had gone above and beyond for them.

Our client is a technology business that provides both software and hardware solutions for other businesses. We were instructed by the client to draft a bespoke manufacturing agreement to govern the terms of engagement with a manufacturer procured to produce a component for the client’s patented product.

Our client was particularly concerned about protecting their intellectual property and ensuring that the manufacturer was restricted from copying or modifying the know-how of their technology.

Our team expertly drafted a manufacturing agreement that strengthened the manufacturer’s obligations and clarified the licence restrictions along with other safeguarding clauses including intellectual property clauses, confidentiality clauses and limitation of liability clauses that worked together to limit the client’s exposure to the risks of misuse and infringement of the intellectual property rights concerned.