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Toll Manufacturing Agreement for the United States

Toll Manufacturing Agreement Template for United States

A Toll Manufacturing Agreement is a legally binding contract used in the United States that establishes the terms and conditions under which one company (the toll manufacturer) agrees to manufacture products for another company (the product owner) using the latter's specifications and intellectual property. The agreement covers quality standards, pricing, production volumes, intellectual property rights, confidentiality, and liability allocation. It is governed by U.S. federal and state laws, including the Uniform Commercial Code, manufacturing regulations, and industry-specific requirements.

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What is a Toll Manufacturing Agreement?

The Toll Manufacturing Agreement is essential when a company needs to outsource manufacturing while maintaining control over product specifications and intellectual property. This contract type is commonly used in situations where a product owner lacks manufacturing capabilities or wants to optimize production costs without capital investment in facilities. The agreement, governed by U.S. law, typically includes detailed provisions for quality control, pricing structures, minimum volume commitments, and intellectual property protection. It's particularly important in regulated industries where compliance with specific manufacturing standards is crucial.

What sections should be included in a Toll Manufacturing Agreement?

1. Parties: Identification of the manufacturer and customer, including legal entities and addresses

2. Background: Context of the agreement and business relationship

3. Definitions: Key terms used throughout the agreement

4. Services: Detailed description of manufacturing services to be provided

5. Quality Requirements: Manufacturing standards, specifications, and quality control procedures

6. Pricing and Payment: Fee structure, payment terms, and invoicing procedures

7. Term and Termination: Duration of agreement and termination conditions

8. Intellectual Property: Ownership and protection of IP rights

9. Confidentiality: Protection of confidential information

10. Liability and Indemnification: Risk allocation between parties

What sections are optional to include in a Toll Manufacturing Agreement?

1. Minimum Purchase Commitments: Customer's commitment to minimum order volumes - use when steady production volumes are required

2. Export Control: Compliance with international trade regulations - use when products may be exported

3. Environmental Compliance: Specific environmental obligations - use when manufacturing involves significant environmental impact

4. Change Control: Procedures for implementing changes to specifications - use when frequent product modifications are expected

What schedules should be included in a Toll Manufacturing Agreement?

1. Product Specifications: Detailed technical specifications for products

2. Quality Agreement: Detailed quality control procedures and requirements

3. Pricing Schedule: Detailed breakdown of pricing and cost calculations

4. Manufacturing Process: Step-by-step manufacturing procedures

5. Service Level Agreement: Performance metrics and standards

6. Equipment Schedule: List of equipment to be used in manufacturing

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Clauses



































Industries

Uniform Commercial Code (UCC): Federal legislation governing commercial transactions, particularly Article 2 on Sales which is crucial for toll manufacturing contracts

FDA Regulations: Federal Food, Drug, and Cosmetic Act requirements if the manufacturing involves food, drugs, or cosmetic products

OSHA Regulations: Occupational Safety and Health Act standards ensuring workplace safety and health requirements in manufacturing facilities

EPA Regulations: Environmental Protection Agency requirements governing environmental impact, emissions, and waste management in manufacturing processes

Intellectual Property Laws: Federal patent laws and trade secret protections crucial for protecting manufacturing processes and product formulations

cGMP Standards: Current Good Manufacturing Practices requirements, especially important if manufacturing regulated products

State Contract Laws: State-specific contract laws and Statute of Frauds requirements affecting agreement formation and enforcement

Environmental Legislation: Clean Air Act, Clean Water Act, and Resource Conservation and Recovery Act requirements for manufacturing operations

Labor Laws: Fair Labor Standards Act and state-specific labor regulations governing employment in manufacturing facilities

International Trade Regulations: Import/export regulations and customs requirements if the manufacturing involves international trade

Tax Laws: Federal and state tax implications, including sales tax requirements for toll manufacturing arrangements

Product Liability Laws: Regulations governing product safety standards, consumer protection, and warning label requirements

Data Protection Laws: Regulations concerning trade secret protection, confidentiality, and data security in manufacturing operations

Insurance Requirements: Mandatory insurance coverage including product liability, workers' compensation, and general liability insurance

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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