How to write your own Manufacturing Contract

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The Manufacturing Contract is used between the product developer and the product manufacturer. This agreement is based on the buyer being responsible for designing and developing the product. Final versions of the product are then delivered to the manufacture. The manufacturer is responsible for delivering the final output or created product back to the Buyer. Adjust the terms as needed for your specific situation.
Document Length: 8 Pages
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Manufacturing Contract

Writing the Manufacturing Contract document

MANUFACTURING AGREEMENT

THIS AGREEMENT is made this Current Day day of Current Month, Current Year by and between Company Name ("Buyer") and Company Name ("Manufacturer"). Buyer is involved in the retail and marketing of Insert Primary Business products. Manufacturer has experience manufacturing Insert relevant manufacturing activity. Buyer desires to have Manufacturer create products on the terms and conditions set forth in Exhibit B attached hereto (the "Specifications").

This agreement is based on the Buyer being responsible for designing and developing the product. Final versions of the product are then delivered to the Manufacture. The Manufacturer is responsible for delivering the final output or created product back to the Buyer.

Adjust the terms as needed for your specific situation. "Deliverables" shall mean any prototype(s), final product(s) provided in any form, documentation, or other materials required to be delivered by Buyer to Manufacturer, as set forth in the Specifications. "Critical Deliverables" shall mean Deliverables that have a Deadline or Milestone date, as outlined in the Specifications, which must be delivered to either Buyer or Manufacturer on or before a specific date.

"Source Materials" shall mean all raw materials from which the product(s) are manufactured. "Prototype Product" shall mean any and all Deliverables provided to Manufacturer prior to the Manufacture Date. "Final Product" shall mean any and all Deliverables provided to Manufacturer that are in accordance with the Specifications and accepted by Manufacturer as completion of a particular Deliverable.

"Manufacture Date" shall mean the date that the Product is completed and first available for use by Buyer. "Schedule" shall mean the schedule(s) for completion of the Deliverables, as set forth in the Specifications. "Delivery" shall mean transmitted by Manufacturer to Buyer and in accordance with any chain of custody or security measures agreed upon by both parties in accordance with the Specifications. "Services" shall mean any training, customization, enhancement or other labor performed by Manufacturer as required by the Specifications.

"Error(s)" shall mean malfunctions or defect(s) within the Prototype or Final Products or a Deliverable that prevents it from conforming to the Specifications. "Specifications" shall mean the specifications for the Product and Services, as detailed and attached to this Agreement as Exhibit B, that include detailed specifications and instructions for all required Deliverables, features and functionality, and a complete production schedule for each Deliverable and Milestone. "Term" shall mean the period of time commencing on the Effective Date of this Agreement and continuing indefinitely until this Agreement is terminated. "Developer's Proprietary Material" shall mean all intellectual property rights in any text, images or other components and/or materials owned by Buyer, or which Buyer has the legal right to use, that are delivered to Manufacturer, including but not limited to artwork, stock photography, software, related documentation, source code, scripts, object code, logos, graphics or tag lines.

"Manufacturer's Proprietary Material" shall mean all intellectual property rights in any text, images or other components and/or materials owned by Manufacturer, or which Manufacturer has the legal right to use, that are delivered to Buyer, including but not limited to software, related documentation, Manufacturer marketing material, logos, graphics or tag lines. "Documentation" shall mean all product or user guides, and all reference, integration, installation or implementation manuals that describe in detail the operation of the Product(s) and that are normally provided by Manufacturer as part of its deliveries to Buyer. "Manufacturer Activities" shall mean any activities undertaken by Manufacturer in the development of the Product(s) and Documentation satisfying the Specifications pursuant to this Agreement. "Enhancements" shall mean error corrections, fixes, modifications and updates not included in the Specifications with respect to the Product(s).

"Milestone" shall mean each development or Deliverable reached by Buyer and agreed upon in writing between Buyer and Manufacturer. "Milestone Payment" shall mean a payment obligation related to the achievement and acceptance of a particular Milestone. "Acceptance" shall mean completion of a Deliverable that conforms to the Specifications and is mutually agreed upon in writing by both Buyer and Manufacturer.

In consideration of the mutual covenants set forth in this Agreement, Manufacturer and Buyer hereby agree as follows:

Manufacture of Products

Manufacturer agrees to the production, management, documentation and development of the Product(s) according to the compensation terms listed on Exhibit A attached hereto.

Specifications

Manufacturer agrees to develop the Product(s) pursuant to the Specifications set forth in Exhibit B attached hereto (the "Specifications").

Delivery Dates and Milestones

Buyer will use reasonable diligence in the development of the Product(s) and endeavor to deliver to Manufacturer all Deliverables within the specified time frame(s). Manufacturer acknowledges, however, that this delivery deadline, and the other payment milestones listed in Exhibit B, are estimates and are not required delivery dates unless otherwise noted in the Specifications. Deliverables defined as "Critical Deliverables" shall be outlined in Exhibit B and shall contain the delivery date and terms of delivery of the Critical Deliverable.

Manufacturer will retain any molds, casting, foundry or other sources used in the manufacturing process and will provide Buyer with the output formats only. The output is to be used only within the scope of the Product(s) as outlined in Exhibit B and may not include packaging and assembly unless otherwise specified by Exhibit B.

Ownership Rights

Except for Manufacturer's Proprietary Material (defined above) contained in the Product(s), Buyer shall hold all right, title, and interest in and to the Product and all of its components. Manufacturer agrees that it shall not use Buyer's Product(s) or Intellectual Property for any other purpose than those expressly set forth in this Agreement.

Product Modifications and Changes

Unless otherwise agreed upon by Buyer and Manufacturer, any modifications required to the Product(s) or other component related to its production or operation that are a result of third-party changes to resources required by the manufacturing process shall be considered ADDITIONAL and will fall outside of the Specifications.

Specific Enhancements

Buyer and Manufacturer acknowledge that at some time during the Term of this Agreement that enhancements to the Product(s) may be proposed by either Buyer or Manufacturer which fall outside of the scope of the Specifications. Upon such proposal, Buyer shall confer in good faith with Manufacturer concerning the feasibility of developing such enhancements and the time frame for developing, testing and incorporating such enhancements. Buyer and Manufacturer shall mutually agree in writing as to whether Buyer shall pursue the development of such enhancements, and, if so, which party will fund such development. The Specifications will be amended to include such enhancements.

Backups and Redundancies for Development

Manufacturer will maintain off-site storage of all stages of production molds, casts, blueprints, plans or other production sources and other backup media related to this Agreement to ensure Product integrity and protection, and will be responsible for setting up a daily procedure for backing up all data. Buyer agrees to update all backups of these materials on a daily basis unless otherwise agreed upon in the Specifications. Backups will be maintained for one (1) year from the acceptance date of the project.

Acceptance

The terms and conditions contained in this Section will apply to the initial release of the Product(s), Prototype(s) and Final Product(s) as well as to subsequent release(s), alternate versions, upgrades, enhancements or any other version thereof. Manufacturer shall evaluate any beta or final version(s) of each Deliverable and shall submit an acceptance or rejection to Buyer within Days days after Manufacturer's receipt of an agreed upon transmission of each Deliverable.

Testing and Quality Assurance

Manufacturer agrees to thoroughly test the Product(s) (including without limitation each and every release, version, and enhancement thereof), as appropriate under the circumstances, at all appropriate stages of development, and shall document its testing by written test documents delivered to Buyer. Manufacturer will submit its test plans to Buyer. Manufacturer, so as to ensure that Buyer's standard(s) of quality are maintained, agrees to subsequently modify the test plans to accommodate Buyer's requests if Buyer reasonably deems necessary.

Quality Assurance or test documentation shall include detailed descriptions of the tests conducted, their results and any outstanding or unresolved issues. Manufacturer will not produce the Final Product, or any enhancement thereof, unless Manufacturer and Buyer agree upon such action in writing.

Adherence to Schedule

If Manufacturer fails delivery or transmission of any "Critical Deliverable" within the dates specified in the Schedule or fails to meet a Milestone as defined in the Specifications, then a Breach of Agreement ("Breach") shall be considered to have occurred. Buyer may: (1) amend the Schedule to include a correction period; or (2) suspend the Schedule until the problem is corrected at the sole expense of Manufacturer subject to Buyer's reasonable satisfaction; or (3) terminate this Agreement. Delivery of all Deliverables not defined in the Specifications as "Critical Deliverables" shall be considered estimates and delivery shall not be subject to Breach.

Manufacturer shall not be held responsible for any delays due to milestones missed by Buyer; delays due to Buyer Deliverables; or delays due to transmission, equipment failure, strikes, riots, disasters, or other natural occurrences.

Support Services

Manufacturer will be available to respond to Buyer's questions about Product(s) and Product problems during any stage. Manufacturer will staff a help desk with a combination of phone and email support services from 9:00 am to 5:00 pm Monday through Friday Time Zone. Manufacturer will be responsible for maintaining an ongoing log of support requests and actions taken, and will track user support requests to completion.

Compensation

For all of Manufacturer's services under this Agreement, Buyer shall compensate Manufacturer, in cash, pursuant to the terms of Exhibit A attached hereto. In the event Buyer fails to make any of the payments referenced in Exhibit A by the deadline set forth in Exhibit A, Manufacturer has the right, but is not obligated, to pursue any or all of the following remedies: (1) terminate the Agreement, (2) remove equipment owned by Buyer, whether leased to Manufacturer by Buyer or not, and remove any Buyer's Personnel or Staff from Manufacturer location(s), (3) bring legal action, or (4) Manufacturer may suspend development of the Product(s) and Buyer may be responsible for any schedule changes required and additional financial impact.

Confidentiality

Manufacturer and Buyer acknowledge and agree that the Specifications and all other documents and information related to the development of the Product(s) (the "Confidential Information") will constitute valuable trade secrets of Buyer. Manufacturer shall keep the Confidential Information in confidence and shall not, at any time during or after the term of this Agreement, without Buyer's prior written consent, disclose or otherwise make available to anyone, either directly or indirectly, all or any part of the Confidential Information.

Limited Warranty and Limitation on Damages

Manufacturer warrants that the Product(s) will conform to the Specifications. If the Product does not conform to the Specifications, Manufacturer shall be responsible to correct the Product(s) without unreasonable delay, at Manufacturer's sole expense and without charge to Buyer, to bring the Product(s) into conformance with the Specifications. This warranty shall be the exclusive warranty available to Buyer.

Buyer waives any other warranty, express or implied. Buyer acknowledges that Manufacturer shall not be responsible for the results, productivity or any other measurable metric not specified in Exhibit B, obtained by Buyer. Buyer waives any claim for damages, direct or indirect, and agrees that its sole and exclusive remedy for damages (either in contract or tort) is the return of the consideration paid to Manufacturer as set forth in Exhibit A attached hereto. Buyer will monitor the reliability and stability of the Product for a period of up to 30 days to ensure that it performs in accordance with the Specifications.

If modifications are required at any time, Buyer will confer in good faith with Manufacturer concerning the appropriateness of any modifications and mutually agree whether or not to make such modifications; provided, however, that such agreement will not be deemed to relieve Manufacturer from its obligations to ensure that the Product continues to conform to the Specifications and all Manufacturer's work will be performed for compensation estimates as specified in Exhibit A.

Independent Contractor

Manufacturer shall be retained as an independent contractor. Manufacturer will be fully responsible for payment of income tax and other business taxes on all compensation earned under this Agreement.

Equipment

Buyer agrees to make available to Manufacturer, for Manufacturer's use in performing the services required by this Agreement, such material, including items of hardware and software, as Manufacturer and Buyer may agree is reasonably necessary for such purpose.

General Provisions

1 Entire Agreement

This Agreement contains the entire agreement between the parties relating to the subject matter hereof and supersedes any and all prior agreements or understandings, written or oral, between the parties related to the subject matter hereof. No modification of this Agreement shall be valid unless made in writing and signed by both parties hereto.

2 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of State. Exclusive jurisdiction and venue shall be in the County County, State Superior Court.

3 Binding Effect

This Agreement shall be binding upon and enure to the benefit of Manufacturer and Buyer and their respective successors and assigns, providing that Buyer may not assign any obligations under this Agreement without Manufacturer's prior written consent.

4 Waiver

The waiver by either party of any Breach or failure to enforce any of the terms and conditions of this Agreement at any time shall not in any way affect, limit, or waive such party's right thereafter to enforce and compel strict compliance with every term and condition of this Agreement.

5 Good Faith

Each party represents and warrants to the other that such party has acted in good faith, and agrees to continue to so act, in the negotiation, execution, delivery, performance, and any termination of this Agreement.

6 No Right to Assign

Manufacturer has no right to assign, sell, modify or otherwise alter the Product(s), except upon the express written advance approval of Buyer, whose consent can be withheld for any reason.

7 Right to Interrupt Services, Labor or Removal of Resources

In the event Buyer fails to make any of the payments set forth in Exhibit A within the time prescribed in Exhibit A, Manufacturer shall have the right to stop production or transmission of deliverables at any stage until payment in full is paid, plus accrued late charges of 1 1/2% per month.

8 Indemnification

Manufacturer warrants that the Product(s) will conform to the Specifications, or such other Specifications as are agreed to in writing by Buyer, for a period of 30 days from the date of completion of the Product(s). If the Product(s) do not conform to the Specifications, as Buyer's sole remedy, Manufacturer shall be responsible to correct the Product(s) without unreasonable delay, at Manufacturer's sole expense and without charge to Buyer, to bring the Product(s) into conformance with the Specifications set forth in Exhibit B. This warranty shall be the exclusive warranty available to Buyer. Buyer waives any other warranty, express or implied.

Buyer acknowledges that Manufacturer is not responsible for the results obtained by Buyer for the intended or unintended use, resale or distribution of the Product(s). Buyer acknowledges that Manufacturer is not responsible for fixing problems, errors or omissions on the Product(s) after Buyer has tested, proofed and approved the Product(s) for Final Production and either a written approval has been given to Manufacturer or the Product(s) have been mass-produced or delivered to Buyer in any way. Buyer waives any claim for damages, direct or indirect, and agrees that its sole and exclusive remedy for damages (either in contract or tort) is the return of the consideration paid to Manufacturer as set forth in Exhibit A attached hereto. No action, regardless of form, arising out of any claimed Breach of this Agreement or transactions under this Agreement may be brought by either party more than one (1) year after the cause of action has occurred.

9 No Responsibility for Theft or Reverse Engineering

Manufacturer will have no responsibility for any third party disrupting, intruding or otherwise copying or reverse engineering in part or in whole on all or any part of the Product(s) at any time.

10 Right to Make Derivative Works

Buyer will have the exclusive rights in making any derivative works from any of its products, molds, casts, foundry, work, practices, coding, programming or other work on the Product(s) that is related to its pre-existing materials as outlined in the Specifications.

11 Attorney's Fees

In the event any party to this Agreement employs an attorney to enforce any of the Terms of the Agreement, the prevailing party shall be entitled to recover its actual attorney's fees and costs, including expert witness fees.

12 Identification of Manufacturer

Buyer agrees that Manufacturer's identification may be annotated within the product as required by law in the localities in which the product may be distributed. Manufacturer also agrees to put Buyer's Insert copyright, trademark and/or patent notices on the Product(s) and the relevant content therein.

13 Transfer of Rights

In the event Manufacturer is unable to continue production, maintenance and support of the Product(s), exclusive rights to the Product(s) molds, casts or other foundry materials will be granted to Buyer and shall include the transfer or documentation of all manufacturing process, third-party software or tools used by Manufacturer in the creation or maintenance of the Product(s) or any part thereof.

Both parties represent and warrant that, on the date first written above, they are authorized to enter into this Agreement in entirety and duly bind their respective principals by their signatures below:

The complete Manufacturing Contract - with the actual formatting and layout - is available in this Contract Pack.
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