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Manufacturer Services Agreement

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MANUFACTURER SERVICES AGREEMENT

This Manufacturer Services Agreement ("Agreement") is made and entered into as of Effective Date: by and between Manufacturer Name: , organized as: , with principal place of business at (hereinafter "Manufacturer"), and Client Name: , organized as: , with principal place of business at (hereinafter "Client"). Manufacturer and Client are each a "Party" and together the "Parties."

RECITALS

WHEREAS: Client desires to engage Manufacturer to perform manufacturing, assembly and related services for certain products described as Product(s): in accordance with the specifications set forth herein;

WHEREAS: Manufacturer has the facilities, personnel and expertise to perform such manufacturing services and is willing to provide such services to Client pursuant to the terms and conditions of this Agreement;

WHEREAS: The Parties desire to set forth their respective rights and obligations with respect to the manufacture, testing, delivery and quality assurance of the Products.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Parties agree as follows:

1. SCOPE OF SERVICES

1.1 Services. Manufacturer shall manufacture, assemble, test and deliver the Products and provide related services (collectively, the "Services") in accordance with the requirements set forth in Section 1.2 and any Purchase Orders issued by Client that reference this Agreement.

2. TERM AND TERMINATION

2.1 Term. The initial term of this Agreement shall commence on the Effective Date and continue for Term Length (months): unless earlier terminated in accordance with this Agreement.

2.2 Termination for Cause. Either Party may terminate this Agreement for material breach if the breaching Party fails to cure such breach within Cure Period (days): days after receipt of written notice specifying the breach.

2.3 Termination for Insolvency. Either Party may terminate immediately upon written notice if the other Party becomes insolvent, makes an assignment for the benefit of creditors, or becomes subject to bankruptcy proceedings.

3. PRICING AND PAYMENT

3.2 Payment Terms. Client shall pay invoices within Payment Terms (days): days from invoice date. Late payments shall accrue interest at Interest Rate (% per annum): % per month or the maximum allowed by law, whichever is less.

3.3 Taxes. Prices do not include taxes. Each Party is responsible for its own taxes arising from performance under this Agreement, except for taxes on Client's purchases which Client shall pay in addition to amounts due hereunder.

4. DELIVERY; TITLE AND RISK OF LOSS

4.1 Delivery Terms. Delivery shall be made FOB Shipping Point/FOB Destination (select): Shipping and delivery schedule:

4.2 Title and Risk of Loss. Unless otherwise agreed in writing, title and risk of loss to Products shall pass to Client upon delivery to the carrier if FOB Shipping Point, or upon delivery to Client if FOB Destination.

5. INSPECTION; REJECTION; WARRANTY

5.1 Inspection. Client shall have Inspection Period (days): days after receipt to inspect Products and notify Manufacturer of nonconformance.

5.2 Warranty. Manufacturer warrants that Products shall conform to the Specifications, be free from defects in materials and workmanship, and be merchantable for a Warranty Period (months): months from delivery. Remedies for breach of warranty shall be repair or replacement at Manufacturer's expense or, at Manufacturer's option, refund of the purchase price.

5.3 Exclusions. Warranty does not cover defects resulting from misuse, modifications by Client, normal wear and tear, or unauthorized repairs.

6. INTELLECTUAL PROPERTY

6.1 Background IP. Each Party retains all right, title and interest in its Background Intellectual Property. No rights are granted except as expressly set forth in this Agreement.

6.2 Product IP. Client retains ownership of Client's designs and specifications. Manufacturer shall assign and hereby assigns to Client all rights in any improvements to Client's designs conceived solely for Client under this Agreement.

7. CONFIDENTIALITY

7.1 Confidential Information. "Confidential Information" means non-public information disclosed by one Party to the other that is marked confidential or should reasonably be considered confidential given its nature.

7.2 Obligations. Receiving Party shall not use or disclose Confidential Information except as necessary to perform under this Agreement and shall protect it with at least the same degree of care it uses to protect its own confidential information, but not less than reasonable care.

7.3 Exceptions. Confidential Information does not include information that is or becomes public through no fault of Receiving Party, was known prior to disclosure, or is independently developed.

8. INDEMNIFICATION AND LIMITATION OF LIABILITY

8.1 Indemnification. Manufacturer shall defend, indemnify and hold Client harmless from claims arising out of Manufacturer's negligence or willful misconduct in performing the Services, including product liability to the extent caused by Manufacturer's defect in manufacturing.

8.2 Limitation of Liability. Except for liability arising from gross negligence, willful misconduct, or breach of confidentiality or intellectual property indemnities, neither Party shall be liable for special, incidental, indirect or consequential damages. The aggregate liability of each Party for any claim arising under this Agreement shall not exceed Liability Cap (amount): .

9. INSURANCE

9.1 Manufacturer shall maintain and provide upon request evidence of customary commercial insurance, including product liability and general liability coverage in limits reasonably acceptable to Client. Required insurance types and limits:

10. COMPLIANCE; RECALLS

10.1 Compliance with Law. Manufacturer shall comply with all applicable laws, regulations and industry standards in performing the Services, including laws relating to product safety, export controls, labor, and environmental protection.

10.2 Recalls. If a Product recall is required due to manufacturing defects, Manufacturer shall cooperate with Client and shall bear the reasonable direct costs of recall attributable to Manufacturer's acts or omissions; Parties shall consult on communications and corrective actions.

11. AUDITS AND RECORDS

11.1 Records. Manufacturer shall maintain accurate records related to performance under this Agreement for Records Retention Period (years): years.

11.2 Audit Rights. Client or its representative may, upon reasonable notice and during normal business hours, audit Manufacturer's relevant records and facilities to confirm compliance with the Agreement. Audit notice period (days): days.

12. NOTICES

All notices under this Agreement shall be in writing and delivered to the addresses below by certified mail, nationally recognized courier, or personal delivery, and shall be effective upon receipt.

13. AMENDMENTS; WAIVER; COUNTERPARTS

13.1 Amendments. No amendment or modification shall be effective unless in writing and signed by authorized representatives of both Parties.

13.2 Waiver. Failure to enforce any provision shall not constitute a waiver of that provision or any other provision. A waiver must be in writing and signed to be effective.

13.3 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

14. GOVERNING LAW; ENTIRE AGREEMENT; SEVERABILITY

14.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of State: without regard to conflict of laws principles.

14.2 Entire Agreement. This Agreement, including all Purchase Orders and attachments, constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior agreements and understandings.

14.3 Severability. If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force and effect and the Parties shall negotiate in good faith to replace the invalid provision with a valid one that achieves the Parties' intent.

MISCELLANEOUS

Manufacturer:

By:

Date:

Title:

Client:

By:

Date:

Title:

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What a Manufacturer Services Agreement Is and When It Applies

A Manufacturer Services Agreement is a written contract that sets the commercial and technical terms between a contracting party and a manufacturer or contract manufacturer. It defines scope of work, deliverables, pricing, lead times, quality standards, inspection rights, intellectual property ownership, confidentiality, warranties, and termination mechanics. For U.S. transactions the document governs commercial allocation of risk and is typically governed by a chosen state law; electronic execution is generally permitted under the ESIGN Act (15 U.S.C. ch. 96) and state UETA statutes where adopted.

Why a Clear Manufacturer Services Agreement Matters

A precise agreement reduces disputes, aligns expectations for production and delivery, protects IP and trade secrets, and documents remedies for quality or delivery failures. It creates an enforceable allocation of liability, clarifies payment and change‑order procedures, and supports regulatory compliance in industries such as healthcare and aerospace.

Why a Clear Manufacturer Services Agreement Matters

Who Typically Prepares and Signs This Agreement

Typical participants include product companies, contract manufacturers, suppliers, procurement teams, and in-house legal counsel; the agreement supports both one-off projects and ongoing manufacturing relationships.

  • Contract Manufacturers and OEMs: Procurement and operations teams negotiate scope, tooling, and capacity commitments for production runs.
  • Product Companies and Brand Owners: Legal and supply chain departments secure IP assignment, quality standards, and inspection rights.
  • Finance and Procurement Teams: Approve payment terms, pricing schedules, and milestone invoicing to align cash flow and delivery.

Signers should ensure authority and corporate approval procedures are followed and that financial and technical contacts are identified for ongoing operational coordination.

Core Sections to Include in a Professional Agreement

A comprehensive Manufacturer Services Agreement groups obligations into distinct sections so responsibilities, performance criteria, payment, and risk allocation are unambiguous and enforceable.

Scope of Services

Precisely describe products, specifications, tolerances, volumes, packaging, and accepted change‑order procedures to avoid later scope disputes.

Pricing & Payment

State unit prices, volume discounts, payment schedule, invoicing requirements, taxes, currency, and remedies for late payment or disputed invoices.

Term and Termination

Define effective date, initial term, renewal mechanics, termination for cause or convenience, and post‑termination wind‑down obligations.

IP and Confidentiality

Address ownership of designs, tooling, and improvements; include confidentiality obligations and permitted disclosures for subcontractors.

Warranties and Liability

Set product warranties, remedy windows, limits on consequential damages, and indemnification obligations for third‑party claims.

Quality and Inspection

Specify quality standards, inspection rights, acceptance testing, corrective action plans, and remedies for nonconforming goods.

Essential Administrative and Security Fields

Party Legal Names: Exact registered entity name
Scope Identifier: Product SKUs and part numbers
Payment Terms: Net terms, currency
Effective Date: MM/DD/YYYY required
Signature Blocks: Authorized signer name and title
Confidentiality Flags: NDA or trade secret status

Quick Step-by-Step: Completing the Manufacturer Services Agreement

Follow these steps to prepare, approve, sign, and store the agreement for operational use and future audit.

  • 01
    Prepare Draft: Assemble SOW, pricing, and technical attachments before drafting contract text.
  • 02
    Review Internally: Legal, procurement, and engineering should confirm obligations and risk allocation.
  • 03
    Execute Signatures: Obtain authorized signatures using an ESIGN/UETA‑compliant eSignature platform or wet signature as required.
  • 04
    Archive Record: Store the fully executed agreement and audit trail for retention and compliance.

How to Configure an Online Signing Workflow

[INTRO] Set up fields, authentication, and routing to match approval steps and enforce required inputs during signing.

Field Configuration
Signer Authentication Email link or SMS code; KBA when higher assurance required
Bulk Send Enable for multiple recipient batches when issuing standardized agreements
Conditional Fields Show or hide clauses based on selected options
Audit Trail Enable timestamps, IP logging, and completion certificate

Digital Signing and eSubmission: Platform Considerations

Prefer platforms that capture a complete audit trail, offer conditional fields and advanced signer authentication where needed, and can export ISO‑compliant signed PDFs for long‑term storage.

  • Integrations: Salesforce | NetSuite | Google Workspace support
  • Document Formats: PDF, DOCX, Excel supported for upload and export
  • Security Certifications: TLS 1.2/1.3; AES‑256; SOC 2; ISO 27001

Routing and Distribution Options for Executed Agreements

Decide sender, recipient order, and post‑signing distribution so stakeholders receive copies and records are stored centrally.

  • Send to Manufacturer: Primary copy delivered to manufacturer for execution and operational kickoff
  • Send to Customer: Provide fully executed copy to purchaser or internal sales team
  • Archive in CLM: Store in contract lifecycle management or cloud repository with metadata
  • Notify Finance: Automated invoice trigger or payment setup postexecution

Key Dates and Deadlines to Track

Track effective dates, milestone deliveries, acceptance windows, payment due dates, and warranty periods so obligations are monitored and enforced.

Effective Date:

Date when obligations commence and warranty windows begin

Milestone Delivery:

Dates for prototype, pilot, and production deliveries

Payment Due:

Invoice due date and late fee triggers

Warranty Period:

Start and duration for product warranty obligations

Acceptance Window:

Inspection and rejection period after delivery

Typical Contract Lifecycle Milestones

A sequential view of contract milestones helps teams align procurement, engineering, and operations across the lifecycle.

01

Negotiation

Agree SOW and pricing, finalize technical attachments and lead times.

02

Execution

Obtain signatures and distribute executed copies to stakeholders.

03

Production Start

Manufacturer begins tooling, pilot runs, and initial deliveries as scheduled.

04

Ongoing Performance

Manage quality, change orders, replenishment, and payment cycles during term.

Common Mistakes to Avoid When Preparing This Agreement

  • Vague scope language that omits part numbers or acceptance criteria, leading to postdelivery disputes and rework.
  • Missing or inconsistent pricing schedules—omitting currency, taxes, or escalation clauses creates invoicing disputes.
  • Failing to confirm signer authority and corporate approval steps, which can delay production starts.
  • Not attaching technical drawings, BOMs, or inspection checklists, leaving quality obligations undefined and unenforceable.

Risks and Potential Consequences of an Incorrect or Incomplete Agreement

Enforceability Risk: May be challenged if signatures or authority are improper
Payment Disputes: Ambiguous payment terms cause delayed collections or litigation
IP Exposure: Undefined IP ownership risks loss of proprietary rights
Warranty Liability: Unclear warranty terms increase recall or return costs
Regulatory Noncompliance: Industry rules (HIPAA, FDA) can trigger fines or restrictions
Tax Consequences: Incorrect contract classification may affect withholding obligations

eSignature Vendor Comparison for Manufacturer Services Agreements

Compare basic vendor pricing and core capabilities relevant to signing and storing Manufacturer Services Agreements; signNow is listed first per comparison guidance.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by plan Varies by plan Varies by plan Varies by plan
Bulk Send Yes (Business Premium) Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Real-World Examples of Manufacturer Services Agreements in Use

Case examples show common outcomes when agreements are clear and workflows are enforced using digital signing and structured attachments.

Optica Ventures LLC

Optica standardized signature workflows to reduce turnaround on customer agreements.

  • Faster signature completion across customers.
  • "The interface is simple and easy-to-use for our team; more importantly, it is just as easy for our customers."

Brian Fitzgibbons, COO, Optica Ventures LLC.

Xerox (NetSuite Integration)

Xerox integrated contract signing into their ERP for operational efficiency.

  • Integration reduced manual steps and human errors.
  • "airSlate SignNow provides us with the flexibility needed to get the right signatures on the right documents, in the right formats, based on our integration with NetSuite."

Kodi-Marie Evans, Director of NetSuite Operations, Xerox.

Practical Tips for Accurate and Efficient Completion

Adopt these practices to reduce execution time, avoid disputes, and preserve legal enforceability.

Define Scope Precisely
Attach BOMs, drawings, tolerances, and acceptance tests as numbered exhibits. A clear SOW reduces interpretation disputes and makes inspection and remedy steps operationally executable.
Require Authorized Signers
Confirm corporate authority and include title lines. Use board resolutions or delegated‑authority schedules for multi‑entity structures to avoid later challenges to signer authority.
Use Versioned Attachments
Label and date all technical attachments and change orders. Maintain a version history so parties can tie performance to the exact specification in force at shipment.
Preserve an Audit Trail
Keep signed PDFs with embedded audit records or cryptographic signatures where higher non‑repudiation is required; ensure retention policies meet regulatory and tax needs.

Frequently Asked Questions About Manufacturer Services Agreements

Answers to common legal, execution, and retention questions to help avoid pitfalls when using or eSigning the agreement.


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