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A manufacturing license agreement is a very important document for any business that outsources its production processes. But how do you go about putting one together? Using a combination of online templates and legal resources, you can have a manufacturing license agreement template put together in no time. Here's where to find all of this in a matter of clicks.
What's in this guide?
- What is a manufacturing license agreement template?
- Find a manufacturing license agreement template
- More on where to get a manufacturing license agreement template
- Understand when to use a manufacturing license agreement
- Learn the key differences between a manufacturing license agreement and a distribution agreement
- What does a manufacturing license agreement template include?
- What does a manufacturing license agreement template not include?
- How effective is a manufacturing license agreement?
- Should I get a lawyer to write a manufacturing license agreement?
- How do I write a manufacturing license agreement?
What is a manufacturing license agreement template?
A manufacturing agreement is essentially a contract between two parties: a business and a manufacturer. In the agreement, the manufacturer agrees to produce goods for a business, according to a specific set of terms and conditions. A manufacturing license agreement template is a skeleton of the clauses that you'll need to safeguard both parties involved.
Find a manufacturing license agreement template
You can download this template at Net Lawman.
More on where to get a manufacturing license agreement template
A new wave of online legal services is making it easier than ever to find affordable legal documents, including a manufacturing license agreement template. Here are a few places we'd recommend starting your hunt for the right template:
- Net Lawman. Get your hands on a manufacturing agreement template for $89, or pay a little extra to have a lawyer review your document too.
- Law Live. Based in Sydney, LawLive has built up a library of more than 400 legal documents, including a manufacturing agreement. Pay a one-time fee to enjoy a customisable template.
- Wonder Legal. Use Wonder Legal's handy online form to create a customised manufacturing agreement template for free.
- Legal Vision. Pay a one-time fee to access Legal Vision's library of templates, or sign up for a monthly subscription to receive legal help and advice around the clock.
Here's some more details on where to find online legal resources:
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Understand when to use a manufacturing license agreement
It's important to use a manufacturing license agreement whenever your company enters into a new relationship with a manufacturer. This type of agreement can be used across various industries to aid the production of different goods. This includes, but is not limited to, the production of:
Using a manufacturing license agreement enables a business to minimise the risk of loss by clearly stating the job specifications, timelines and terms of the work.
Learn the key differences between a manufacturing license agreement and a distribution agreement
A manufacturing license agreement governs a manufacturer's relationship with a contracting party. In it, the manufacturer agrees to produce goods for a business following clearly identified terms and specifications. On its part, the contracting party agrees to pay the manufacturer a pre-determined price for the production work and to take delivery of final products.
On the other hand, a distribution agreement is a contract between a party that supplies goods and a distributor who markets and sells goods. The deal grants the distributor rights to sell the supplier's products. In some cases, the relationship may call for an exclusive manufacturing and distribution agreement. In this case, a business will outsource a company to both produce and sell the products.
What does a manufacturing license agreement template include?
A well-prepared manufacturing agreement clearly identifies the products that should be made, their specifications, the timelines for making them and the price. Using a manufacturing license agreement template, you'll typically come across the following sections:
- Definition of terms. With important legal documents, it's critical to include a glossary of key terms at the beginning of the agreement.
- Party details. Name, address and contact details of the parties involved.
- Product description and specifications. A clear description of what the manufacturer will be producing, including specific size and weight dimensions.
- Financial matters and payment terms. How much will the manufacturer charge for its services and how will the business pay.
- Intellectual property. An intellectual property clause should state that you are only licensing the manufacturer to use your intellectual property (IP) for the sole purpose of manufacturing products for your business.
- Indemnification. Outline which party will be responsible for any losses incurred during the manufacturing process.
- Dispute resolution. Should any disputes arise between the two parties, there should be a transparent resolution process in place.
- Termination. State the grounds under which either party can end the contract and how.
What does a manufacturing license agreement template not include?
A manufacturing agreement does not permanently assign or license out a business' intellectual property. It only grants a manufacturer temporary rights to use a business' intellectual property to manufacture its products over a specific period.
Similarly, a manufacturing agreement does not grant distribution rights. It only gives manufacturers the rights to manufacture products for the contracting business. To distribute these products, a manufacturer would need a distribution agreement.
How effective is a manufacturing license agreement?
A manufacturing agreement is an effective tool for getting the most out of a manufacturer-client business relationship. It sets out clearly the terms governing the engagement so that there is no room for doubt as to:
- What the manufacturer was contracted to produce
- The specifications of the products
- When the manufacturer should terminate production
- How much the contracting party should pay.
This ensures the manufacturer follows product specifications and the contracting party gets what it paid for. A manufacturing license agreement also plays its part in protecting a business' intellectual property.
Should I get a lawyer to write a manufacturing license agreement?
While you can prepare a manufacturing agreement without a lawyer, it's often thought to be a good idea to onboard a legal professional to help.
Manufacturing relationships can be very complex. You have to abide by consumer laws on matters like product quality and labelling and tort laws. You also have to protect your intellectual property and limit your exposure to liability risks associated with manufacturing. If you are outsourcing manufacturing overseas, jurisdiction issues will arise, which may complicate dispute resolution.
A commercial lawyer with experience handling complex manufacturing disputes can help you prepare a fool-proof manufacturing agreement that protects your assets and limits your liability.
How do I write a manufacturing license agreement?
When the time comes to put together your document, it's worth taking a look at a manufacturing license agreement template. You can find these online using reputable companies, including Net Lawman and Legal Vision. Using a ready-made template can make the writing process a lot quicker and help to ensure that you haven't missed any important components.Back to top
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