Why It’s Important To Have A Manufacturers Agreement

Whether you manufacture products yourself, or have an idea and want someone to bring it to life, you’ll need a Manufacturers Agreement to ensure your business is protected. 

Manufacturers Agreements are crucial when you’re creating clothes, furniture, electronics, or any other products in New Zealand. 

They can be utilised when manufacturers create products and sell them to customers, or when businesses have ideas and want manufacturers to produce them. 

Either way, it is vital that both the manufacturer and the customer understand their roles and responsibilities. This is where a Manufacturers Agreement is invaluable!

What’s In It?

Some terms that might be included in a New Zealand Manufacturers Agreement include: 

• Term: the duration of the manufacturing arrangement 
• Manufacturing process: specifics of the manufacturing process, including the design of the goods and materials utilised 
• Payment: how and when will the manufacturer be compensated?
• Delivery: the terms of goods delivery to the customer, such as fortnightly or monthly delivery schedules
• Minimum order: manufacturers might specify a minimum quantity of orders or purchase amount over a certain timeframe 
• Sub-contracting: whether manufacturers are permitted to outsource their work to sub-contractors 
• Exclusivity: whether the partnership between the manufacturer and the customer is exclusive or non-exclusive  
• Intellectual Property (IP) protection: to safeguard your product designs and manufacturing processes
• Defects rectification: who bears responsibility in the event of any defects in manufactured products? Is it the manufacturer or the business that designed the product? 
• Liability allocation: establishing how liability is allocated in the event of product defects 

Example 

Jim runs a business where he redistributes hand sanitiser. Jim has designed a new hand sanitiser dispenser that he believes will be a hit in New Zealand. 

Realising he lacks the capacity to mass-produce this product, he engages a manufacturing company to produce his design. 

Jim secures a Manufacturers Agreement to ensure that the manufacturing company respects his intellectual property and delivers the goods promptly. 

Need Help? 

Whether you’re a manufacturer or a business with an innovative idea, it is essential to have a Manufacturers Agreement to ensure that your products are produced efficiently and on time in New Zealand. 

It might seem like a complex task, but Sprintlaw has assisted numerous businesses in realising their business goals and product visions. Get in touch with us at [email protected] or call us on 0800 002 184 to find out more!

---