Private Label Law: Manufacturing Contracts Overview
Are counterfeiters and dodgy vendors disrupting your private label business? Yes? Here’s a bit of advice: next time, don’t use free contract templates. Instead, invest in custom-drafted agreements that specifically address your situation.
Solid contracts are a godsend when legal troubles rear their tortious heads.
Think you can’t afford a custom contract? Guess again. Lawyer-crafted, private label terms are affordable — and go a long way in protecting your profits.
Do you work with a Chinese manufacturer?
If you’re like 90% of private label sellers, of course you do. The cross-border partnerships are cost-effective, but can present some international business obstacles. Foreign legal disputes are difficult enough; without an enforceable contract, negotiations can become impossible. So, make sure you have one!
Benefits of Private Label Manufacturing Contracts
- Mitigate Risk – Manufacturing contracts define expectations, limit liability, and establish indemnities. Risk is significantly reduced when partners set parameters for product quality, logistics, exclusivity, and privacy.
- Save Money – Time is money. A well-written manufacturing contract establishes clear guidelines for swiftly handling potential business hiccups. Further, production agreements clarify liability, which quickens the resolution process.
- More Favorable Terms – By having custom manufacturing contracts on the ready, you may enjoy more favorable terms, being the architect of the agreement.
What Should Manufacturing Contracts Include?
At the very least, private label manufacturing contracts should include:
- Limitation of liability information;
- Warranty information;
- Product development specifications;
- A clearly defined process for processing defective products;
- Payment terms; and
- Recall procedures.
If you really want to cover all your bases, also consider including:
- Documentation requirements and access stipulations;
- Certification standards;
- Performance and testing standards;
Manufacturing Contracts: Don’t Go Without Them
It is far better to spend a few hundred bucks on ironclad manufacturing contracts that protect your best interests than lose profits because of a petty disagreement or sub-par terms.