Supply and production agreement
A supply and manufacturing agreement is a framework agreement for the conclusion of specific purchase, production or sales transactions and as such is not governed by law. The parties to a supply and manufacturing agreement are usually a producer or wholesaler and, on the other hand, the buyer, who agree on the supply or production of certain contractual products. Although there are no formal requirements for supply and manufacturing agreements, it is advisable to agree delivery periods and payment terms in writing. The delivery periods of partial deliveries, the respective payment terms or specific details per production or delivery batch can be specified in further individual contracts.
In the case of manufacturing agreements, a company has certain goods of its own manufactured by a producer. For this reason, the manufacturing agreement can be classified as an “innominate contract for work and services”, a contract not expressly governed by law, as it usually also contains elements of the law of agency (e.g. production monitoring and quality assurance). In addition, production aspects such as quality features or even a non-disclosure agreement can be included in the agreement.