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Manufacture and purchase agreement drafting considerations

Time:2014-03-13 Hit:179



Manufacture and purchase agreement drafting considerations


     Manufacture and purchase agreement refers to the agreement a buyer provides the raw materials to the seller, after receiving the raw materials, the seller process it under the direction of the buyer, and sell the manufactured products to the buyer above.  

The considerations of drafting manufacture and purchase agreement for lawyers are as follows:

1. Definitions

Raw materials shall mean the raw materials necessary for the manufacture of the products and any subsequent amendments executed by both parties hereto.

2. Raw material

According to the buyer's instructions and specifications, the seller shall manufacture the products using raw material purchased from the buyer and deliver the products to the customer. Seller shall pay the buyer the purchase price of the raw material obtained from the buyer. The customer shall pay the seller the purchase price of the products purchased from the seller.

3. Manufacture

The products shall be manufactured in the seller's facilities, or at the place approved by the buyer, unless otherwise agreed by the buyer in writing, all of the raw material and the products shall be stored or manufactured only at such place.

Seller shall grant complete access to its facilities to buyer's employees to provide or conduct technical assistance, quality control, and review as to the method and process of manufacturing the produces. The fee or cost for such technical support, quality control, and review shall be borne by the seller, including but not limited to, the cost for round trips, meals, lodging and other expenses of buyer's personnel dispatched for technical assistance.

4. Production capacity

The seller warrants that it has the physical facilities and production capacity suitable for manufacturing and exporting the products in strict conformity with the buyer's instructions and specifications. Unless otherwise agreed in writing by the parties hereto, the buyer shall provide the seller the equipment necessary for the production, free of charge, on the terms and conditions of the lease agreement to be separately entered into by the parties.

5. Quality

If the seller or buyer is claimed by the customer or obliged to pay damages to the customer due to defect, shortage, non-delivery or late delivery of the products, each party shall take its responsibility as follows:

In case of a defect, shortage, non-delivery or late delivery of the raw material due to the reason solely attributable to the buyer, the buyer shall be responsible for the direct damages or losses incurred and suffered by seller. Except as otherwise specified in the contract, the seller shall be liable for any and all damages or losses claimed by the customer, as well as any direct damage or loss actually incurred and suffered by the buyer.

6. Ownership of intellectual property

Seller shall not acquire under this contract or by reason of its performance thereof, any right, title, or interest in or to any of the patents, trademark, or trade names owned and used by the buyer, all of which shall remain the sole and exclusive property of the buyer. Seller shall not at any time do or cause to be done anything which in any way impairs buyer's exclusive right, title, or interest in or to any patents, trademarks or trade names, and the goodwill symbolized by them.

Author: shanghai lawyer


shanghai attorney