What Is a Manufacturing Agreement?
A manufacturing agreement is a written contract used when one party hires another to perform manufacturing or production work. In this setup, the manufacturer works as an independent contractor rather than an employee.
The agreement explains the services provided and how payment works. It also covers ownership of the finished work, reimbursement of expenses, and when either party can end the arrangement.
When to Use a Manufacturing Agreement
Use a manufacturing agreement when you bring in a contractor to handle production work and need the working terms confirmed before anything is made. Situations where this typically applies include:
- Hiring a contractor to produce or fabricate goods for you as a service
- Working with a manufacturer or fabricator who operates as an independent contractor, not an employee
- Starting production that requires a written contractor agreement rather than a simple product purchase
For example, a business hiring a fabricator to produce custom parts would use this agreement before production begins.
What to Include in a Manufacturing Agreement
A manufacturing agreement should clearly define the services being performed and the terms that govern the contractor relationship. Make sure it covers:
- What production work will be done
- When the work starts and how long it runs
- How payment works and when it’s due
- Whether approved expenses are reimbursed
- Who owns the finished work
- Confidentiality rules and any non-solicit terms
- Insurance coverage and who handles losses
- When the agreement ends, and how it can be terminated
- How formal notices must be sent
- How disputes are resolved
These details explain what the manufacturer will do, how they are paid, and what happens if the relationship ends early. They also address how problems are handled or if the work needs to stop early.
If the manufacturer is paid as an independent contractor, you may also need tax forms such as a W-9 and Form 1099-NEC to report payments correctly.
Manufacturing Agreement Sample
Look at a manufacturing agreement sample to see how the document is set up. Then customize and download the template in Word or PDF.
