How are the intellectual property rights of the customer in the product designs protected?
The IP clause provides that all rights in the product specifications and designs are reserved to the customer. A limited licence is granted to the manufacturer to make use of the designs for the purpose of manufacturing the products and fulfilling the manufacturer's other obligations.
IP rights in improvements may either be owned by the party that creates them, or by the customer.
Can the manufacture vary pricing during the term of the agreement?
An optional price variation clause is included. Variations may be limited in the following ways:
- only effective on certain dates (e.g. anniversaries of the date of signature);
- only effective after a defined notice period; and/or
- subject to increase caps (e.g. by reference to the UK Retail Prices Index).
Can I use this document in conjunction with my existing purchasing T&Cs, which cover matters such as delivery, insurance, risk and title?
Yes. These matters are all covered in one of the schedules, so it is relatively easy to insert your existing purchasing T&Cs into the document.
What happens under this agreement if the manufacturer makes improvements to the customer's product designs?
The document is not suitable for use (at least without substantial adaptation) in situations where the manufacturer is providing a full design service. However, a handful of optional clauses are included in the premium version relating to limited design services provided by the manufacturer.
These clauses assume that the manufacturer will only make improvements (or correct design faults) if expressly permitted or instructed to do so. Such design services may be made subject to the payment of additional charges.
The manufacturer may be expressly obliged to provide such design services with reasonable care and skill. In addition, the customer may expressly acknowledge that the efficacy of the product design remains within the customer's bailiwick, notwithstanding the provision of the design services.
Under the optional training clause in the longer template, does the customer provide the training to the manufacturer, or is training given by an outside provider?
Either possibility can be accommodated.
If we, as the client, are providing raw materials to the manufacturer, then will the manufacturer be fully responsible for those raw materials whilst they are at the manufacturing facility?
There are two alternative provisions in the premium agreement concerning risk in raw materials (the term 'component' is used in the template) whilst they are in the manufacturer's control. The first places all risk relating to such raw materials in the lap of the manufacturer; the second places risk in the lap of the customer, providing that the manufacturer fulfils its specific obligations under the agreement to take care of the raw materials (e.g. storing them properly, not selling them, not altering them except during the manufacture of the products, etc).
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