China Manufacturing Contracts: OEM, CM, and ODM Arrangements

I spend much of my time drafting manufacturing agreements between foreign (mostly American, European and Australian) companies and Chinese companies. When doing these manufacturing contracts for China, my first step is determining what kind of relationship the foreign buyer (typically our client) will have with the Chinese factory. We cannot be clear about what kind of

International OEM Agreements: You Are Naked Without a Good Bill of Materials

Manufacturing agreements between product buyers and their manufacturers typically come with all sorts of clauses dealing with choice of law, indemnification, time of delivery, failure rate, price, payment, and various other contractual provisions. The Bill of Materials can often make or break the success of a manufacturing relationship, but this document is too often either

Overseas Manufacturing Contracts (OEM, CM and ODM)

1. Value of Manufacturing Agreements Creating a clear manufacturing agreement can alleviate the various legal issues inherent in manufacturing overseas. Before we discuss the key terms for your manufacturing contract, we will briefly address why it is so important to have such a contract at all, even in countries with weak legal systems. There are

China and the Internet of Things and What NOT to Do

I had essentially the same call recently with two different European (one French, one Spanish) IoT start-up companies that might at this point better be termed “wind-down” companies. Their stories are an old one, and one we have covered and warned about at least a dozen times on here, including in a post directed specifically

China Manufacturing Contracts: The Questions We Ask

As China and its laws change, the China manufacturing lawyers at my firm must constantly adjust. This adjustment can include even how we draft our contracts for China. And oftentimes, with even small changes in how we draft our contracts, we make changes in the questions we ask to gather the information we need to

The Five Keys for Reducing Your China Manufacturing Risks

In response to yesterday’s post containing outsourcing tips from a business perspective a reader sent me an e-mail asking what to look out for on the legal side. Fortunately, I was able to find a short article fellow blogger Steve Dickinson had published a few years ago on just this topic and here it is:

Sourcing Product Manufacturing: A Tale of Two Companies.

It was the best of times, it was the worst of times. — Charles Dickens, from A Tale of Two Cities My law firm recently got two similar calls from decent-sized US companies that do their contract manufacturing in China. Both were calling our international dispute resolution lawyers to see what remedies/leverage they might have

China Manufacturing Contracts: Not So Simple

Last month I wrote about the three basic types of manufacturing agreements commonly used by foreign companies that get their manufacturing from China: Original Equipment Manufacturing (OEM), Contract Manufacturing (CM), and Original Development Manufacturing (ODM). But this apparent simplicity is deceiving because there are three ways this division breaks down in the real world of manufacturing.

China NNN Agreements: Don’t Leave Home Without One (Or Many)

Years ago, our Chinese lawyers used to get a fairly steady stream of panicked callers who would call us a month or so after returning from China where they had showed their product, prototype or product drawings to Chinese OEM companies. These people were calling us in a panic because they had shown their product,