Manufacturing and Outsourcing Agreement Templates
It is cost-effective and thus common for businesses to outsource large-scale operations such as customer support and manufacturing to other companies.
It is important to ensure that the provider of the outsourced services works in accordance with the client business’s own methods, instructions and standards. As such, an Outsourcing Agreement should set out agreed methods of service delivery, quality control procedures, service levels and, where appropriate, training requirements.
All aspects of an outsourcing agreement should be carefully negotiated at the outset in order to ensure that the interests of both businesses are protected and that the provider of the outsourced services functions as close to being a part of the client business as is reasonably possible.
Manufacturing and Outsourcing Agreement Templates is part of Business . Just £38.50 + VAT provides unlimited downloads from Business for 1 year.
Frequently Asked Questions
I want to outsource part of my operations. What must the agreement control? +
It should set the methods, standards and instructions the provider must follow, service levels and quality control, pricing, ownership of any intellectual property produced and training or reporting where needed. The aim is that the provider works to your business's own methods and standards. The outsourcing agreements here are drafted so the provider functions as close to part of your business as is reasonable.
Who owns the designs, tooling and intellectual property when a manufacturer makes my product? +
Whoever the contract says. Do not assume you own designs, tooling or improvements just because you paid for them: without an assignment, intellectual property created by the manufacturer can belong to the manufacturer, not to you. Under UK law a commissioner has no automatic ownership of what is created. The agreement should assign or licence all relevant IP to you and cover confidentiality. These manufacturing templates address IP and standards so ownership is not left to chance.
How do I keep quality consistent when someone else does the work? +
Build quality control into the contract: agreed specifications and standards, inspection and testing rights, service levels, reporting and remedies for failure such as rework, rejection or termination. Outsourcing without measurable standards is where reputations suffer. These agreements set out methods, quality control and service levels so performance can be monitored and enforced rather than merely hoped for.
Can I limit or pass on liability if the provider's failure causes me loss? +
You can allocate liability in the contract, but exclusions and caps between businesses must be reasonable under the Unfair Contract Terms Act 1977, and you cannot exclude liability for death or personal injury caused by negligence. Indemnities, liability caps and insurance requirements are the usual tools. Negotiate these at the outset, because they are hard to change once the relationship is running.
