Manufacturing Agreement Solicitors
A manufacturing agreement is a contract under which one business makes products to another business’s specification, setting out quality standards, pricing, delivery, intellectual property ownership and responsibility for defective products.
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Adam Bernard Solicitors drafts and reviews manufacturing agreements for brand owners, contract manufacturers and component suppliers. Whether you outsource production to a UK factory, manufacture for retailers under their own brand, or supply components into a larger production chain, a clear manufacturing agreement protects your margins and your reputation.
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Types of Manufacturing Contracts
Contract manufacturing agreements – A manufacturer produces finished goods for a brand owner.
Private label (own-brand) agreements – A manufacturer produces goods sold under the buyer’s brand.
Toll manufacturing agreements – The customer supplies raw materials, and the manufacturer processes them for a fee.
Component supply agreements – Agreements covering the supply of parts for integration into a customer’s production line.
Tooling and mould agreements – Terms governing the ownership and use of customer-funded tooling and moulds.
Quality agreements – Detailed quality control obligations that operate alongside the main contract.
Key Clauses in a Manufacturing Agreement
The most important clauses in a manufacturing agreement deal with specification, quality, forecasting, price, intellectual property, liability and termination.
Specification and change control – A precise specification and a process for approving changes.
Quality control and inspection – Testing, acceptance procedures, audit rights and certificates of conformity.
Forecasts and orders – Binding versus non-binding forecasts, minimum order quantities and lead times.
Price and price review – Mechanisms for managing raw material price fluctuations and currency risk.
Delivery, title and risk – When ownership and risk pass. The default rules are set out in sections 17 to 20 of the Sale of Goods Act 1979, although businesses can agree their own terms.
Intellectual property – Who owns the designs, know-how and improvements.
Exclusivity and non-compete – Whether the manufacturer can make similar products for competitors.
Liability, recalls and insurance – Who bears the costs of defects and product recalls.
Product Liability and Safety in Manufacturing
Under Part I of the Consumer Protection Act 1987, producers can be strictly liable for damage caused by defective products, so your manufacturing agreement must allocate that risk clearly. The Consumer Protection Act 1987 can make a manufacturer, an own-brander or an importer liable without proof of fault. Products placed on the UK market must also meet applicable safety rules, including the General Product Safety Regulations 2005 and any sector-specific requirements. The Product Regulation and Metrology Act 2025 gives the government new powers to update product safety rules, so agreements should require ongoing compliance with laws as they change. For product marking requirements, see GOV.UK guidance on placing UKCA or CE marked products on the market.
Implied Terms in B2B Manufacturing Contracts
Unless validly excluded, goods supplied in the course of business must be of satisfactory quality, fit for purpose and match their description and any sample. These implied terms come from the Sale of Goods Act 1979. Any exclusion or limitation of them in a business contract must satisfy the reasonableness test in the Unfair Contract Terms Act 1977.
Insolvency and Supply Continuity
Since 2020, suppliers generally cannot terminate a supply contract just because the customer has entered an insolvency procedure. Under section 233B of the Insolvency Act 1986, introduced by the Corporate Insolvency and Governance Act 2020, so-called ipso facto clauses are restricted. Manufacturing agreements should therefore rely on other protections, such as payment security, retention of title and termination for non-payment.
Protecting Your Intellectual Property
If a manufacturer develops designs or tooling for you, the agreement should state expressly that you own them. Without clear wording, the manufacturer may own the copyright, design rights or know-how it creates. Pair your manufacturing agreement with a non-disclosure agreement before sharing specifications. GOV.UK provides an overview of intellectual property.
Manufacturing Agreement Checklist
Before signing a manufacturing agreement, brand owners and manufacturers should check seven points.
Is the specification complete, version-controlled and attached to the contract?
Are acceptance tests, rejection rights and timescales clear?
Are forecasts binding, and who carries the cost of surplus materials?
How do raw material price increases pass through?
Who owns designs, tooling and improvements?
Who pays for a product recall, and is it insured?
What happens to stock, tooling and confidential information on termination?
Clear answers to these questions prevent the most common manufacturing disputes over quality, cost and ownership.
How Adam Bernard Solicitors Can Help
Drafting manufacturing, private label, toll and quality agreements.
Reviewing manufacturers’ standard terms through our contract review service.
Preparing onward contracts, such as distribution agreements and wholesale supply agreements.
Call 0207 100 2525 (24/7) or book a free consultation to discuss your contract.
This page is for information only and does not constitute legal advice.
Frequently Asked Questions
What is a manufacturing agreement?
Who is liable if a contract-manufactured product is defective?
Who owns the tooling and designs in a manufacturing agreement?
Can a manufacturer stop supplying if my business enters insolvency?
Should I sign an NDA before approaching a manufacturer?
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