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INTERNATIONAL MANUFACTURING CONTRACT



The International Manufacturing Contract is used in situations when one company arranges for
another company in a different country to manufacture its products; this is also known as
international subcontracting. The company provides the manufacturer with all the
specifications, and, if applicable, also the materials required for the production process.

This type of Contract sets out the requirements, which the manufacturer must meet
concerning the quality of the products, certification, quantities, conditions and dates of
delivery, etc. It also establishes guidelines for the inspection and testing of the products set
forth by the company which contracts out the manufacture, or by its own clients. Furthermore
it also outlines modifications to orders, as well as guarantees and compensation in case of
breach of contract.

The International Manufacturing Contract provides for a basic scheme, and two main options.
The basic scheme is based on the assumption that the manufacturer is fully equipped and has
the technology to produce conforming goods, in its position as most specialized Party. The
options, which do not exclude the basic scheme but may combined with it and with each
other, are tailored to cases in which (i) the Company has to supply the Manufacturer with
certain specific equipment or tooling and (ii) the Company has to transfer parts of its own
technology to the Manufacturer to enable him to finalize the products.

The Contract template also covers the situation where the Parties have agreed that the
Manufacturer shall submit samples before production is launched.

This Contract also deals with issues of Intellectual Property Rights (IPR). It is assumed that the
IPR are properly protected by appropriate registration. Moreover, the contract imposes a duty
of confidentiality upon both Parties, which should provide additional protection in particular if
know-how is communicated by one Party to the other. It is suggested to verify that the regime
set out in the Contract for improvements is acceptable in the light of any applicable anti-
trust/competition law.

Because of the cooperation between the Parties, the International Manufacturing Contract
might be enduring. It is therefore important to establish the duration of the alliance. An option
could be that the contract has a specific term with subsequent renewal requiring mutual
agreement.

As far as the Law applicable to the contract is concerned, it is important to note expressly that
the UN Convention on the International Commercial sale of Goods (CISG) does not apply to
that type of agreement "in which the preponderant part of the obligations of the Party which
furnishes the goods consists in the supply of labour or other services."

The alternatives provided by the Contract may be of course be adapted to the specific needs of
the Parties, or deleted. They are not exclusive of each other and may be combined.


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International Manufacturing Contract Template


DATE: ..............................................................................................................................................

BETWEEN:

................................. [company legal name] whose registered office is at
.................................................................... [address, city and country] and registration/fiscal
number is .............................. (hereafter referred to as the Company),

AND:

................................. [company legal name] whose registered office is at
.................................................................... [address, city and country] and registration/fiscal
number is .............................. (hereafter referred to as the Manufacturer).

PREAMBLE [Parties may include a preamble explaining the activities of each and describing the
history of their relationship, if for example the Contract continues a prior relationship].

.........................................................................................................................................................

.........................................................................................................................................................

IT IS AGREED AS FOLLOWS:

1. APPOINTMENT

1.1 The Company appoints the Manufacturer to manufacture the products.

1.2 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.

1.3 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 months written notice to expire at the end of the initial or any subsequent
period of [6 or 12] months.

1.4 The Manufacturer acknowledges that this appointment is non-exclusive and The
Company is free to appoint other manufacturers, in the Manufacturers country or
in other countries, to manufacture products on its behalf.

2. ORDERS

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2.1 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.

2.2 Unless otherwise agreed in writing when an order is placed, the terms and
conditions in this Contract will apply to it.

2.3 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.

2.4 The Company may but is not obliged to give the Manufacturer a forward estimate
of requirements for products in advance of placing specific orders and will notify
any changes in its estimates.

3. OBLIGATIONS OF THE MANUFACTURER

3.1 The Manufacturer shall manufacture and deliver all products so as to meet the
requirements of all orders.

3.2 Every order for products must be completed ready for delivery within . [3, 5, 10]
weeks from the date of the order unless otherwise specified in the order or agreed
in writing within [3, 5, 7] calendar days of the order being received by the
Manufacturer.

3.3 All products must:

3.3.1 Fully comply with the order and with any specification, samples or
patterns comprised in the order.

3.3.2 Be of high quality, comprise only suitable materials and be fit for the
purposes for which they are supplied.

3.3.3 Comply with all applicable laws, regulations and standards including but
not limited to fire, health and safety regulations.

3.4 The Manufacturer shall for the duration of this Contract maintain adequate product
liability insurance in respect of all products and against loss or damage of materials
and products at his factory or when in transit.

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This is a sample of 2 pages out of 10 of the International Manufacturing Contract
To get more information about this contract click here:
INTERNATIONAL MANUFACTURING CONTRACT