This will help you transform your own supply chain and take control of quality, prices, delivery times and much more. Join Senior Engineer Paul Adams and our CEO, Renaud Anjoran, and explore the anatomy of a low-risk supply chain in China. If your product is fully developed and you only use a Chinese factory to put your products into production, the addition of this type of agreement may not be necessary. Your manufacturing contract defines in detail the intricacies of your collaboration and relationship as a customer and supplier and leaves no room for the supplier for interpretations (or fun business). These are the issues that allow one party to terminate the contract prematurely, namely the substantial breach or insolvency of the other party. The respective commitments of the parties are also defined: orders must be placed, the remaining funds must be paid and the licensee can purchase all shares held by the licensee at a price. This clause makes it clear that the formal agreement replaces all previous agreements or agreements on the purpose. We explained the reasons for establishing an enforceable manufacturing contract with your suppliers and the types of information and agreements included in this episode of our podcast. Since this agreement consists of two languages, the clause stipulates that English is the dominant language and that which must be used in dispute resolution. English law also applies. The parties must try to resolve disputes through direct negotiations, but if they do not succeed, they will be either legal proceedings or arbitrations. Our clause here has alternatives, one of which is arbitration in China under the rules of CIETAC, which is an international forum for the handling of disputes.
They should ensure that detailed product specifications (and packaging) as well as quality control and inspection procedures are included in the delivery agreement. It is customary to have an inspection before and after the delivery of the product, and this is especially important when the ultimate delivery goal is far from the Chinese production center. Think about what an inspection entails – each product against sampling, the parameters of a disease, etc. – and try to link the payment with the CM to the result of the inspection. Agreement on the production of goods in China.