Toll Manufacturing Agreement Template

A toll manufacturing agreement is a legally binding contract that outlines the terms and conditions between a brand owner (principal) and a manufacturing company (toll manufacturer) for the production of specific goods. This agreement ensures clarity, accountability, and protection for both parties involved.

Key Elements of a Toll Manufacturing Agreement Template

A well-structured toll manufacturing agreement should encompass the following essential elements:

Image Source: examples.com

1. Parties to the Agreement

Clearly identify the parties involved: Specify the full legal names, addresses, and contact information of both the principal and the toll manufacturer.

Define roles and responsibilities: Clearly outline the specific roles and obligations of each party. This includes specifying who is responsible for sourcing raw materials, intellectual property rights, quality control, and product delivery.

2. Product Description

Image Source: inklegal.co.za

Detailed product specification: Provide a comprehensive description of the product, including its specifications, quality standards, and any unique features or branding requirements.

Manufacturing process: Outline the specific manufacturing process to be followed, including any special techniques or certifications required.

Packaging and labeling: Specify the packaging and labeling requirements, including any branding or labeling guidelines.

3. Manufacturing Process and Quality Control

Manufacturing process: Detail the manufacturing process, including any specific techniques, equipment, or facilities to be used.

Quality control standards: Outline the quality control standards and procedures to be followed, including any relevant certifications or industry standards.

Quality assurance measures: Specify the quality assurance measures to be implemented, such as inspections, testing, and record-keeping.

4. Intellectual Property Rights

Ownership of intellectual property: Clearly define the ownership of intellectual property rights, such as trademarks, patents, and trade secrets.

License to use intellectual property: Grant the toll manufacturer a limited license to use the principal’s intellectual property rights for the purpose of manufacturing the product.

Confidentiality obligations: Impose confidentiality obligations on both parties to protect sensitive information, such as trade secrets and proprietary information.

5. Raw Materials and Supplies

Sourcing of raw materials: Specify who is responsible for sourcing and supplying the raw materials.

Quality standards for raw materials: Outline the quality standards and specifications for raw materials.

Cost allocation: Determine how the costs of raw materials will be allocated between the parties.

6. Manufacturing Costs and Pricing

Cost structure: Clearly outline the cost structure, including labor costs, material costs, overhead costs, and any other relevant expenses.

Pricing terms: Specify the pricing terms, including any discounts, rebates, or other pricing adjustments.

Payment terms: Establish the payment terms, including payment schedules, invoicing procedures, and any applicable taxes or duties.

7. Delivery and Shipping

Delivery schedule: Specify the delivery schedule, including timelines for production, packaging, and shipping.

Shipping terms: Outline the shipping terms, including the mode of transportation, shipping costs, and risk of loss or damage during transit.

Inspection and acceptance: Establish the inspection and acceptance procedures for the finished products.

8. Warranties and Indemnities

Product warranties: Specify any warranties or guarantees provided by the toll manufacturer for the quality and performance of the products.

Indemnification: Outline the indemnification obligations of each party, including protection against claims, damages, or liabilities arising from the agreement.

9. Termination

Termination events: Specify the events that may trigger termination of the agreement, such as breach of contract, insolvency, or force majeure.

Termination procedures: Outline the procedures for terminating the agreement, including notice periods and any required actions.

10. Dispute Resolution

Dispute resolution mechanism: Specify the mechanism for resolving disputes, such as negotiation, mediation, or arbitration.

Governing law: Specify the governing law of the agreement.

11. Force Majeure

Definition of force majeure events: Define force majeure events, such as natural disasters, acts of God, or government actions.

Impact on performance: Specify how force majeure events may impact the performance obligations of the parties.

12. Confidentiality

Confidentiality obligations: Impose confidentiality obligations on both parties to protect sensitive information, such as trade secrets, proprietary information, and customer data.

Non-disclosure agreements: Consider requiring the toll manufacturer to sign a non-disclosure agreement to further protect confidential information.

13. Governing Law and Jurisdiction

Governing law: Specify the governing law of the agreement.

Jurisdiction: Specify the jurisdiction for resolving any disputes arising from the agreement.

Design Considerations for a Professional Toll Manufacturing Agreement Template

To create a professional and trustworthy toll manufacturing agreement template, consider the following design elements:

Clear and concise language: Use clear and concise language to avoid ambiguity and legal jargon.

Well-structured formatting: Use clear headings, subheadings, and bullet points to improve readability.

Consistent formatting: Maintain consistent formatting throughout the document, including font, font size, and line spacing.

Professional layout: Use a professional and clean layout, avoiding cluttered or overly complex designs.

Legal review: Consult with an attorney to ensure that the agreement is legally sound and protects your interests.

By carefully considering these elements, you can create a comprehensive and professional toll manufacturing agreement template that effectively protects your business interests.