...

Our Blog

How To Make a Product Development Contract For A Chinese Manufacturer

ThinkClever

Guides

Manufacturing

News

Oct 19, 2016

Do you have a unique idea that you think can be a success? One way you can make your idea come to life is to work with a Chinese manufacturer to make the product for you. If you have never worked with a foreign company before, we understand how confusing it is in the beginning.

When you do not have aΒ finished product ready for manufacturing or want to make something new, you will have to draft a product development agreement. The agreement is a detailed explanation of the product you want to make, how you will make it, what it will cost, and other important information. However, the most important reason why you need a product development agreement is to protect yourself against intellectual property theft and other potential issues.

Are you still curious aboutΒ how toΒ outsource your company’s product manufacturing to another company overseas? Here are some things you shouldΒ consider when drafting a product development contract with Chinese manufacturers:

Project Proposal

First, how far along is your product development? Do you only have a rough CAD drawing or a basic idea? Or maybe you already have a working prototype and you just want to find a quality manufacturer who can make it come to life. Regardless of what stage you are in, it is important for you to let manufacturers know so they will have an ideaΒ of where you are in the development phase. The further along you are in the design phase and have product specifications, the easier it will be for you to get cost estimates from different Chinese manufacturers based how many products you want to make.

Project Scope

A product development agreement between your company and a Chinese manufacturer must have a clearly outlined project scope. The scopeΒ must give a clear description of what the finished product looks like and when it will be delivered. The agreement should also highlight certain conditions that must be met by the manufacturer. The product scope can also include milestones, evaluation criteria, and other specifications about the potential project.

Financial Information

The document should also discuss production costs and clarify which party will pay for theΒ molds, equipment, and other important tools beforehand. Everyone should also agree on who will approve the costs to prevent confusion and potentialΒ conflict later on. A product developmentΒ agreement should also include payment terms and guidelines.

Intellectual Property

If you want to design an original product and have patents (or maybe you are patent pending), you will want to protect your intellectual property. There are many possible areas where intellectual property issues can arise when working with a foreign manufacturer. A good product development agreement should disclose who owns the intellectual property rights for the final product and during the development process. The contract should also highlight if there are any further restrictions.

Original Equipment Manufacturer (OEM) Agreement

Some Chinese manufacturer will request that you sign an Original Equipment Manufacturer agreement with your company if they agree to your terms. The contract can clarify if you are restricted from manufacturing the product with another manufacturerΒ in China or another country. An Original Equipment Manufacturer Agreement may also mention if your company will have to pay a penalty or fee if you decide to cancel the product development deal or use another manufacturer after they have invested money in purchasing equipment and supplies.

Please consult with an experienced lawyer if you want to work with a foreign company. Although it may seem like a significant financial investment at first, a good lawyer can identify possible problems early on and work hard to protect your interests.

5% for schools

Our custom printed laptop and tablet sleeves have been put to the test in thousands of classrooms since 2010.

  • Free samples
  • In-house design team
  • Full satisfaction guarantee
right-image
Used for the like, share, comment, and reaction icons
Dont want a sleeve or traditional case? No problem, as we offer tough magnetic and shock proof cases, bumpers, shells, bags and more!

Don't want a sleeve or traditional case? No problem, as we offer tough magnetic and shock proof cases, bumpers, shells, bags and more! ... See MoreSee Less

Were celebrating #WorldBookDay2024 with a Shout Out to our loyal customer @listeningbooks 
Listening Books is a UK based charity that provides an audio lending platform for the physically disabled or those with learning differences. Check out this worthwhile not for profit and sit down with a good book today! πŸ™ŒπŸ‘πŸ«ΆπŸ“•πŸ‡¬πŸ‡§πŸ‡ΊπŸ‡ΈπŸ“šπŸ“–πŸ“°

We're celebrating #WorldBookDay2024 with a "Shout Out" to our loyal customer @listeningbooks
Listening Books is a UK based charity that provides an audio lending platform for the physically disabled or those with learning differences. Check out this worthwhile not for profit and sit down with a good book today! πŸ™ŒπŸ‘πŸ«ΆπŸ“•πŸ‡¬πŸ‡§πŸ‡ΊπŸ‡ΈπŸ“šπŸ“–πŸ“°
... See MoreSee Less

Please Reuse, Reduce and Recycle! We do!🌳🌴πŸͺ΄πŸŒ»πŸŒŽπŸŒπŸŒβ˜€οΈπŸŒ¦πŸŒ§πŸ’™πŸ’šπŸ’›β™»οΈ
#earthday2024 #customlogocases #ConserveEnergy #recycle #reuse #reduce

Please Reuse, Reduce and Recycle! We do!🌳🌴πŸͺ΄πŸŒ»πŸŒŽπŸŒπŸŒβ˜€οΈπŸŒ¦πŸŒ§πŸ’™πŸ’šπŸ’›β™»οΈ
#EarthDay2024 #CustomLogoCases #ConserveEnergy #recycle #reuse #REDUCE
... See MoreSee Less

Load more