# Manufacturing Contract Template for Canada (Contract Manufacturing Agreement) > Source: https://netray.co/tools/canada-contract-manufacturing-agreement-template > Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems. > Section: Free Tools ## Short answer Fill in the parties, product, pricing and terms to generate a balanced contract manufacturing agreement outline for Canada, ready to export and review with counsel. ## Category compliance-legal ## Region Canada ## Audience - Procurement manager - Operations manager - Business owner - Contract manager ## Tool **Kind:** template **Output:** document **Fields:** #### Customer (brand owner) **Key:** customer **Type:** text **Default:** Northern Devices Inc. #### Customer address **Key:** customer_addr **Type:** text **Default:** 100 King Street West, Toronto, Ontario #### Manufacturer **Key:** manufacturer **Type:** text **Default:** Prairie Precision Manufacturing Ltd. #### Manufacturer address **Key:** manufacturer_addr **Type:** text **Default:** 55 Industrial Road, Winnipeg, Manitoba #### Effective date **Key:** effective_date **Type:** date **Default:** 2026-11-01 #### Products **Key:** product **Type:** textarea **Default:** Machined aluminum housings, part number NDI-4410 Rev C, per the drawings and specification in Schedule A. #### Initial term (years) **Key:** term **Type:** number **Default:** 3 #### Unit price (CAD) **Key:** unit_price **Type:** text **Default:** 42.50 CAD per unit, ex-works, excluding GST/HST #### Price review **Key:** price_review **Type:** select **Options:** - Annually by agreement - Index-linked to materials - Fixed for the term **Default:** Annually by agreement #### Payment terms **Key:** payment **Type:** select **Options:** - Net 30 - Net 45 - Net 60 **Default:** Net 30 #### Quality standard **Key:** quality **Type:** select **Options:** - ISO 9001:2015 - AS9100D - ISO 13485:2016 - IATF 16949:2016 **Default:** ISO 9001:2015 #### Tooling owner **Key:** tooling **Type:** select **Options:** - Customer owns all tooling - Manufacturer owns tooling - Shared, as listed in Schedule B **Default:** Customer owns all tooling #### Liability cap **Key:** liability_cap **Type:** text **Default:** the fees paid in the 12 months before the claim #### Governing law (province) **Key:** province **Type:** select **Options:** - Ontario - British Columbia - Alberta - Manitoba - Quebec - Nova Scotia **Default:** Ontario **Blocks:** #### Contract Manufacturing Agreement **Body:** This Agreement is made on {{effective_date}} between {{customer}} of {{customer_addr}} (the Customer) and {{manufacturer}} of {{manufacturer_addr}} (the Manufacturer). #### 1. Products and specifications **Body:** The Manufacturer will manufacture the following products for the Customer: {{product}} The Manufacturer will build to the current drawings and specifications. Changes require written approval from both parties through a change order that states any effect on price and lead time. #### 2. Term **Body:** This Agreement runs for an initial term of {{term}} years from the effective date and renews for successive one year terms unless either party gives 90 days written notice before the end of the term. #### 3. Pricing and payment **Body:** Unit price: {{unit_price}}. Price review: {{price_review}}. Taxes, including GST/HST and any provincial sales tax, are added where applicable. Invoices are payable on {{payment}} terms. Late amounts may bear interest at a rate stated in the order or by agreement. #### 4. Forecasts, orders and delivery **Body:** The Customer will give a rolling non-binding forecast. Purchase orders are binding for the quantity and delivery date accepted. Delivery terms and the Incoterms rule are stated on each order. Risk of loss passes as stated in that rule. #### 5. Quality **Body:** The Manufacturer will operate a quality management system certified to {{quality}} or an equivalent agreed in writing. It will keep inspection records and lot traceability, notify the Customer promptly of any nonconformance that may affect shipped product, and allow reasonable audits on notice. #### 6. Intellectual property and confidentiality **Body:** The Customer owns its designs, specifications and trademarks. The Manufacturer keeps its pre-existing know-how and general processes. Each party will keep the other's confidential information secret and use it only for this Agreement. Any improvement made specifically to the Customer's product belongs to the Customer unless the parties agree otherwise in writing. #### 7. Tooling **Body:** Tooling arrangement: {{tooling}}. The Manufacturer will mark Customer tooling as Customer property, keep it insured and in good order, use it only for the Customer, and return it on request subject to payment of amounts due. #### 8. Warranty and remedies **Body:** The Manufacturer warrants that products will conform to the specifications and be free from defects in workmanship and materials for an agreed warranty period. The Customer's remedy for non-conforming product is rework, replacement or credit. #### 9. Liability and insurance **Body:** Neither party is liable for indirect or consequential loss. Each party's total liability under this Agreement is limited to {{liability_cap}}, except for liability that cannot be limited by law, breach of confidentiality, or infringement of the other party's intellectual property. Each party will carry commercial general liability insurance at levels agreed in writing. #### 10. Termination **Body:** Either party may terminate for uncured material breach after 30 days written notice, or on the other's insolvency. On termination the Customer pays for finished goods and for work in progress and materials purchased to fill accepted orders, and the Manufacturer returns Customer property. #### 11. General **Body:** This Agreement is governed by the laws of {{province}} and the federal laws of Canada that apply there. Where Quebec law applies, the parties confirm they require this Agreement and related documents to be drawn up in the language they agree on. Disputes will first go to senior management, then to the courts of {{province}} or to arbitration if the parties agree. #### Signatures **Signatures:** - For the Customer: name, title, date - For the Manufacturer: name, title, date **Notes:** This template is a starting point and not legal advice. It is generic and meant to be balanced between the parties. Have a Canadian lawyer review it before signing, especially the governing law, limits on liability, language requirements in Quebec, tax treatment, privacy obligations and any export controls such as the Controlled Goods Program. Attach Schedule A (specifications) and Schedule B (tooling list). ## Content **Intro:** A contract manufacturing agreement sets who owns the design, who owns the tooling, what quality standard applies and who carries the risk. This template builds a plain, balanced agreement outline for Canada from a few fields, with the clauses buyers and shops most often argue about. **Sections:** #### How to use the template **Body:** Fill in the parties, product, price, quality standard and tooling choice, then read the generated document and edit it before sending to your counterparty. Export to Word to mark up or to PDF for a first draft. The text is deliberately short, so attach the drawings as Schedule A and the tooling list as Schedule B. #### The clauses that matter most **Body:** Most disputes in contract manufacturing come from a handful of topics that the agreement should settle in advance. Write them down in plain language before the first purchase order. **Bullets:** - Intellectual property: who owns designs, improvements and process know-how - Tooling: who paid, who owns it, where it lives and when it can be removed - Quality: standard, inspection records, traceability and handling of nonconformances - Pricing: review mechanism, material cost changes and minimum order quantities - Liability: caps, exclusions, warranty period and insurance #### Canadian points to check **Body:** Commercial law is provincial, so choose the governing province deliberately. Quebec applies civil law and has language requirements, which your lawyer should confirm. Add GST/HST and any provincial sales tax to pricing, and consider currency terms if either side buys in US dollars. If the product is defense related, check export and Controlled Goods Program obligations before sharing drawings. #### Common mistakes **Body:** Common gaps are no statement of tooling ownership, vague change control, unlimited liability, no exit clause for work in progress, and confidentiality that ends when the contract ends. Also set out who may use subcontractors, since a shop that outsources plating or heat treat may need your consent and flow-down of your quality requirements. **Cta:** If you manage many supply agreements, we can add a private assistant that searches your contracts and ERP orders together, on your own servers. **Faq:** #### What should a contract manufacturing agreement in Canada include? **Answer:** At least the parties, product specifications, term, pricing and payment, forecasts and orders, quality requirements, intellectual property, tooling ownership, warranty, liability limits, termination and governing law. Add tax and privacy terms where they apply. #### Who should own the tooling? **Answer:** Usually the party that paid for it, which is often the customer. Whatever you choose, write it down, mark the tooling, set insurance and maintenance duties and say how it is returned. The template includes a field for this. #### Do I need a lawyer to use this template? **Answer:** You should have a Canadian lawyer review any contract that carries significant value or risk. The template is a starting point that helps you cover the right topics and speeds up that review. #### Does the template cover Quebec? **Answer:** It includes a general language clause, but Quebec civil law and language rules need local legal advice. Treat the template as a base and have the Quebec-specific points checked. ## Search terms manufacturing contract template canada, contract manufacturing agreement canada, contract manufacturing agreement template, manufacturing services agreement canada, tooling ownership clause, canadian manufacturing supply agreement --- Talk to an engineer: https://netray.co/contact?intent=erp_ai | Machine catalog: https://netray.co/agent/catalog.json