Manufacturing Services Agreement Outline Template

Between Acme Precision Ltd ("Customer") and Northfield Components Inc ("Manufacturer"), effective 2026-11-01. This outline lists the clauses to negotiate and the commercial positions entered so far. Each heading is a place for counsel to draft final wording.

Products covered: Machined aluminium housings per Customer drawings listed in Schedule A, revision controlled. New parts are added by a written schedule update. Customer drawings, specifications and revisions control; Manufacturer may not change process, material, site or sub-tier suppliers without prior written approval.

Initial term of 3 year(s). State renewal mechanism (automatic or by agreement), notice period to end, and termination for convenience and for cause with cure periods.

Customer provides a rolling forecast over 6 months, non-binding except as stated. Purchase orders inside a frozen window of 8 weeks are binding and cannot be cancelled or rescheduled. Agree flex bands (for example plus or minus a percentage) in the weeks outside the frozen window and the treatment of raw material bought against forecast.

Price per unit as listed in Schedule B, with volume breaks. State what is included (material, tooling amortisation, packaging, testing) and what is not. Define a mechanism for material, currency and labour adjustments, such as an index or an annual review, and an open-book cost review right if used.

Delivery term: FCA. Define on-time delivery measurement, the delivery window, partial shipments, and remedies for late delivery such as expedite at Manufacturer's cost or agreed liquidated damages with a cap.

Reference the quality agreement, applicable standards (for example ISO 9001, AS9100 or IATF 16949), first article requirements, certificates of conformance, lot traceability, record retention period, change notification, and Customer audit rights on reasonable notice.

Warranty period of 12 months from delivery against defects in material, workmanship and conformance to specification. Define return, rework or replace remedies, who pays freight and sorting costs, and the process for containment and corrective action.

Customer retains ownership of its designs and specifications. State ownership, marking, maintenance, insurance and return of any tooling or fixtures (see the tooling ownership agreement). Address improvements, background IP and any licence the Manufacturer needs to perform.

Reference the mutual NDA. Add anti-bribery, sanctions, export control, conflict minerals and supplier code of conduct obligations as applicable to the parties.

Payment terms: Net 45 from valid invoice. State currency, late payment interest if any, treatment of disputed amounts and taxes.

Liability cap basis: 12 months of fees. List exclusions from the cap (for example confidentiality breach, IP infringement, death or personal injury where law requires). Require general liability and product liability insurance at stated limits, and consider recall cost allocation.

Require notice of capacity constraints, disaster recovery arrangements, a last-time-buy and end-of-life process, and transition assistance including transfer of tooling, documents and inventory on termination.

Governing law and venue: State of Texas, courts of Travis County. Consider an escalation ladder (operational, executive, mediation) before litigation or arbitration.