Odm agreement template

The terms of the MDG contract in the primary contract service contracts should be detailed, but not product specific, so that once the agreements are signed, there is no need for further review if product changes are made over time.

Include product-specific details as facilities that can be verified separately. Since a producer only signs an OEM agreement with its purchaser, the manufacturer must limit the amount of compensation to the buyer and not to another party.

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The manufacturer may impose a penalty if the buyer discloses any manufacturer confidential information learnt from such inspection. To lower the risk of its own employees, affiliates or independent contractors from compromising any confidential information or trade secrets of the buyer, a manufacturer must also have in place confidential agreements between the manufacturer and all parties who might discover buyer confidential information through the manufacturer.

Another clause might state that payment shall not mean acceptance creating a binding contract. This means even if goods are delivered and payments are made, the buyer still retains the right to cancel the OEM agreement and seek repayment. A manufacturer might negotiate a term stating that once goods are delivered and all contractual obligations fulfilled, there will be no repayment.

Alternatively, the manufacturer should seek to establish grounds for contract cancellation. A common indemnity clause requires the manufacturer to indemnify the buyer, its officers, agents and customers against all claims arising out of damages caused by products or services provided by the manufacturer.

Because a manufacturer is signing an OEM agreement only with its buyer, the manufacturer must restrict the scope of the indemnity to include only the buyer and no other party. It is common to see a clause stating that any and all intellectual property rights attached to a product produced by the manufacturer which result from or relate to the products produced pursuant to a PO belongs to the buyer.

A manufacturer must insist that intellectual property existing prior to the PO belongs to the manufacturer. If the buyer insists on signing a non-exclusive OEM agreement or PO, the manufacturer should negotiate a minimum order quotation in exchange for order unpredictability.

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