A handshake and a purchase order will get you through the first shipment. A proper bag manufacturing contract is what keeps the relationship intact when the second shipment arrives with the wrong leather color, or the factory starts producing your design for a competitor, or a raw material shortage pushes delivery back by eight weeks. Every one of these scenarios has happened to real buyers. The ones with strong contracts resolved the issue. The ones without expensive lessons.
We've sat on both sides of the manufacturing table for 20+ years. At Bespoke Bags, we've drafted and executed contracts with brands across North America, Europe, and the Middle East — from first-time buyers ordering 200 units to enterprise clients with multi-year supply agreements. This guide distills what we've learned about the clauses that matter, the risks they address, and the language that protects both parties fairly.
If you're preparing to sign your first OEM/ODM manufacturing agreement for leather bags, this is the reference document you need.
Quick Answer
A leather bag manufacturing contract must include 8 essential clauses: product specifications (with tech pack references), pricing and payment terms (typically 30% deposit, 70% before shipment), quality standards (AQL levels), delivery timelines with penalty clauses (0.5-1% per week delay), IP protection and NDA terms, tooling ownership, dispute resolution mechanism, and force majeure provisions. At Bespoke Bags, our standard contracts include full IP protection with a $50,000 penalty clause for design disclosure violations.
The 10 Essential Clauses Every Bag Manufacturing Contract Must Include
These aren't optional. Each clause below addresses a failure mode that has cost real buyers real money. Skip any one of them, and you're accepting risk you may not fully understand.
1. Product Specifications & Technical Standards
This is the foundation of the entire contract. Vague specifications are the single most common cause of manufacturing disputes. Your contract must reference a detailed technical package — not general descriptions like "leather tote bag" but exact, measurable, verifiable specifications.
What to include:
- Leather type, grade, and thickness (e.g., "full-grain cowhide, chrome-tanned, 1.2mm ±0.1mm thickness")
- Hardware material and finish (e.g., "zinc alloy, antique brass PVD coating, salt spray tested to 48 hours")
- Lining material and weight (e.g., "210D polyester twill, 75gsm")
- Stitch count per inch/cm (e.g., "minimum 8 stitches per inch on all structural seams")
- Dimensional tolerances (e.g., "bag body: 35cm × 28cm × 12cm, ±3mm tolerance")
- Color references (Pantone codes or approved physical swatches referenced by date)
- Weight per unit (e.g., "finished weight: 680g ±50g")
Why it matters: In a well-documented case from the US District Court of New Hampshire (Ocor Products Corp. v. Walt Disney Productions, 1988), Disney sent a sample of the plaintiff's bag to a Hong Kong manufacturer to produce a "similar" design at lower cost. The dispute centered on whether the replacement bag's handle design was substantially similar — a question that only arose because the original contract lacked precise design specifications that could have prevented the situation entirely. The lesson: specificity in your technical documentation prevents downstream IP theft and quality disputes.
Pro tip: Attach the approved PP (pre-production) sample as a physical reference exhibit to the contract, signed and dated by both parties. Write it into the contract that "the approved PP sample, bearing signatures of both parties and dated [date], serves as the definitive quality and appearance benchmark for bulk production."
2. Pricing & Price Adjustment Mechanisms
Your contract should specify not just the unit price, but the conditions under which it can change.
What to include:
- Unit price per SKU, based on specified Incoterms (FOB, CIF, etc.)
- Currency denomination and exchange rate tolerance (e.g., "price fixed in USD; if USD/CNY fluctuates more than 5%, parties will renegotiate within 15 days")
- Raw material surcharge triggers (e.g., "if leather price increases more than 10% from contract date, manufacturer may request price adjustment with supporting documentation")
- Tooling and mold costs — whether amortized into unit price or charged separately
- Price validity period (typically 90–180 days for leather goods)
Why it matters: Leather prices are volatile. A 15% spike in raw hide costs over a 6-month contract period can turn a profitable order into a loss for the factory — and a factory operating at a loss will cut corners on your product. Build in fair adjustment mechanisms rather than locking in unrealistic fixed prices.
3. Payment Terms & Conditions
This clause determines your cash flow risk and your leverage over quality. Here's a detailed comparison of the three most common payment methods in bag manufacturing:
| Payment Method | How It Works | Buyer Risk | Cost | Best For | Factory Acceptance |
|---|---|---|---|---|---|
| T/T 30/70 (Deposit/Balance) | 30% deposit via wire transfer; 70% balance before shipment (or against copy of B/L) | Medium (70% exposed until balance payment) | Wire transfer fees only ($25–$50 per transfer) | Orders $5,000–$100,000; established relationships | Universal — nearly all factories accept this |
| Alibaba Trade Assurance | Buyer pays Alibaba; funds held in escrow; released to factory upon delivery confirmation | Low (escrow protection; dispute resolution available) | Platform fee (typically 2–3%) | Orders under $20,000; first-time sourcing from Alibaba suppliers | Alibaba-listed suppliers only |
| Letter of Credit (L/C) | Bank guarantees payment upon presentation of compliant shipping documents | Very Low (bank guarantee; document-based) | 0.5–2% of order value + bank fees; 2–4 weeks processing time | Orders over $100,000; new relationships with high-value orders | Larger factories only; many smaller factories refuse L/C due to cash flow impact |
The 30/70 structure — why it's industry standard:
The 30% deposit covers the factory's material costs and demonstrates buyer commitment. The 70% balance, paid after quality inspection but before shipment, gives the buyer leverage while ensuring the factory gets paid for completed work. This is the structure we use at Bespoke Bags for the vast majority of orders.
The pro move for repeat orders: After 3–5 successful shipments, negotiate Net 30 or Net 60 terms (payment due 30 or 60 days after B/L date). Some factories will agree to this if you apply for Sinosure coverage (China Export & Credit Insurance Corporation), which insures the factory against your default at minimal cost.
Advanced: The 30/40/30 milestone structure for complex or high-value orders:
- 30% deposit: Raw material procurement
- 40% mid-production: Released when factory proves 50%+ of goods are assembled (verified by video call or on-site inspection)
- 30% final: Released after passing AQL inspection and issuance of B/L
Contract language example: "Payment terms: 30% of total order value via T/T within 5 business days of Purchase Order confirmation; 70% balance via T/T within 3 business days of successful completion of pre-shipment inspection (AQL 2.5 standard) and presentation of complete shipping documents including Bill of Lading, commercial invoice, and packing list."
4. Delivery Schedule & Late Delivery Penalties
Without a delivery clause tied to consequences, "lead time" is just a suggestion.
What to include:
- Specific production timeline (e.g., "45 calendar days from deposit receipt and PP sample approval")
- Milestone dates: material procurement complete, inline inspection date, final inspection date, ship date
- Late delivery penalty: typically 0.5–1% of order value per week of delay, capped at 5–10%
- Force majeure clause: defines what constitutes an excusable delay (natural disaster, government action, pandemic) vs. what doesn't (raw material shortage, labor disputes within the factory)
- Buyer's right to cancel if delay exceeds a specified threshold (e.g., 6 weeks past original delivery date)
Why the penalty cap matters: Both parties need protection. The buyer needs motivation for on-time delivery. But if penalties are uncapped, a single shipment delay could exceed the entire order's profit margin — which makes the contract unenforceable or leads to disputes rather than resolution. A 5–10% cap is fair and enforceable in most jurisdictions.
5. Quality Control Standards & Inspection Rights
This clause defines what "good quality" means — and what happens when it isn't met.
What to include:
- AQL (Acceptable Quality Level) standard — AQL 2.5 is standard for bags; luxury brands often require AQL 1.5
- Inspection stages: inline inspection (during production), final random inspection (before packaging), pre-shipment audit
- Buyer's right to send third-party inspectors (SGS, Bureau Veritas, Intertek) at buyer's cost
- Defect classification: critical (safety hazard), major (functional or cosmetic defect affecting salability), minor (acceptable within AQL limits)
- Remedy procedures: rework at factory's cost, replacement units, or order rejection with full refund
- Claim window: typically 30–60 days from receipt of goods for latent defects
Real-world context: According to Alibaba's 2025 sourcing report, Trade Assurance resolved 89% of quality disputes within 14 days — but only when buyers had documented specifications and photographic evidence of defects. The contract clause alone isn't enough; you need inspection documentation to enforce it.
Read more about our quality control standards and inspection process.
6. Intellectual Property Rights & Design Ownership
This is the clause that separates manufacturers worth working with from those who'll sell your design to your competitor next quarter.
What must be explicitly stated:
- All designs, patterns, tech packs, molds, and tooling developed for the buyer's order are the buyer's exclusive property
- The manufacturer may not reproduce, sell, or display the buyer's designs to third parties
- Molds and tooling paid for by the buyer remain the buyer's property and must be returned upon request or contract termination
- The manufacturer's existing designs (catalog items used under private label) remain the manufacturer's property unless specifically assigned
The mold ownership problem: This is the most commonly overlooked IP issue in bag manufacturing. When you pay $1,500 for a custom hardware mold, who owns it? Without a contract clause, the factory may claim it's theirs — and use it for other clients. Always specify: "All custom molds, dies, and tooling paid for by the buyer remain the buyer's property. The manufacturer shall store such tooling separately, mark it with the buyer's name, and shall not use it for any purpose other than fulfilling the buyer's orders."
7. Confidentiality & Non-Disclosure Agreement (NDA)
Your NDA should be a standalone document signed before any design files are shared — not buried in the manufacturing contract.
What to cover:
- Definition of confidential information: designs, tech packs, pricing, customer lists, business strategy, marketing plans
- Obligation period: minimum 3–5 years after contract termination
- Restricted disclosure: manufacturer may not share confidential information with any third party, including other clients, without written consent
- Restricted use: confidential information may only be used for fulfilling the buyer's orders
- Penalty for breach: liquidated damages (e.g., $50,000–$200,000 depending on the sensitivity of the information) or actual damages, whichever is greater
Practical tip: Implement phased design sharing. Stage 1: share only material specifications. Stage 2: release partial tech packs after NDA signing. Stage 3: full design files after deposit is received. This limits exposure at each stage — if the relationship falls through early, you haven't shared everything.
8. Breach of Contract & Liability
This clause defines what constitutes a breach and what each party owes the other when things go wrong.
What to include:
- Definition of material breach vs. minor breach
- Cure period: the breaching party has a specified window (typically 15–30 days) to fix the problem before penalties apply
- Liquidated damages for specific breach scenarios (e.g., unauthorized use of buyer's designs: $100,000; failure to meet AQL standards after rework: refund of defective units)
- Limitation of liability: neither party's total liability exceeds the total order value (this protects both sides)
- Consequential damages exclusion: neither party is liable for indirect losses (lost profits, lost customers) — this is standard in international trade and prevents runaway damage claims
9. Dispute Resolution & Governing Law
International manufacturing contracts need a clear dispute resolution mechanism — because when a Chinese factory and a US buyer disagree, the question of "which court decides" is not trivial.
Common approaches:
| Method | Pros | Cons | Best For |
|---|---|---|---|
| Arbitration (CIETAC, HKIAC, ICC) | Enforceable internationally under the New York Convention; faster than litigation; neutral forum | Costs $10,000–$50,000+; limited appeal rights | Orders over $50,000; long-term relationships |
| Litigation (courts of specified jurisdiction) | Full legal process; appeal available | Extremely difficult to enforce Chinese court judgments in the US/EU (and vice versa); slow; expensive | Domestic manufacturing only |
| Mediation → Arbitration (escalation clause) | Lower cost initial step; preserves relationship; arbitration as backstop | Mediation is non-binding unless settlement is reached | Most international manufacturing contracts |
Recommended approach: Include a stepped dispute resolution clause: "Any dispute arising from this contract shall first be addressed through good-faith negotiation between senior representatives of both parties within 30 days. If unresolved, the dispute shall be submitted to mediation under the rules of [mediation body]. If mediation fails, the dispute shall be finally resolved by binding arbitration under the rules of [arbitration institution] in [city], conducted in English."
For contracts with Chinese manufacturers, CIETAC (China International Economic and Trade Arbitration Commission) or HKIAC (Hong Kong International Arbitration Centre) are commonly accepted. For EU buyers, the ICC (International Chamber of Commerce) in Paris is standard.
10. Termination & Contract Exit
Every contract needs a clear exit strategy. Without one, you may find yourself locked into a relationship that's no longer serving your business.
What to include:
- Termination for convenience: either party can terminate with specified notice (e.g., 60–90 days written notice), subject to payment for work already completed
- Termination for cause: immediate termination if the other party commits a material breach and fails to cure within the specified period
- Post-termination obligations: return of molds and tooling; destruction or return of confidential materials; completion of in-progress orders (if buyer elects)
- Transition assistance: manufacturer agrees to cooperate for a specified period (e.g., 90 days) to facilitate transfer to a new manufacturer
- Survival clause: IP rights, confidentiality, and liability provisions survive contract termination
IP Protection in Bag Manufacturing: A Practical Framework
Intellectual property theft in manufacturing isn't usually a dramatic "factory secretly sells your design" scenario. More often, it's incremental: the factory shows your bag design to another client as a "sample of our capability." They use your custom hardware mold for a slightly modified version. They post your design on their Alibaba storefront without permission. Each individual act seems minor — but collectively, they erode your competitive advantage.
The 4-Layer IP Protection Strategy
Layer 1: Legal Registration (Before You Share Any Designs)
- Trademark registration in your home market and key sales markets ($250–$350/class via USPTO; €850 for EU-wide EUIPO coverage)
- Design patent/registration for original bag designs ($1,000–$2,500 in the US; €350 for EU Registered Community Design)
- Copyright registration for original design artwork (inexpensive; provides statutory damages in infringement lawsuits)
Layer 2: Contractual Protection
- NDA signed before any design files are shared
- Manufacturing contract with explicit IP ownership clauses (see Clause 6 above)
- Mold ownership documentation with serial numbers and photographs
Layer 3: Operational Controls
- Component separation: Use different factories for different components (e.g., one factory for leather cutting and stitching, another for custom hardware). No single factory has your complete design.
- Digital security: Share designs via encrypted platforms. Watermark tech packs with your company name and date.
- Audit rights: Include quarterly factory inspection clauses in your contract. Visit unannounced at least once per year.
Layer 4: Market Monitoring
- Regular searches on Alibaba, 1688.com, and AliExpress for your designs being sold by unauthorized parties
- Amazon Brand Registry (if selling on Amazon) for automated takedown of counterfeit listings
- Customs recordation: register your trademark with US Customs (CBP) and EU Customs (through the Application for Action) to intercept counterfeit goods at the border
Case study: A US retailer reportedly saved $250,000 in potential counterfeit losses by registering their trademark with Chinese customs (through CNIPA) before beginning production. When a factory attempted to sell overruns of their design on domestic e-commerce platforms, customs seized the goods based on the IP registration. Without that registration, the buyer would have had no legal basis for enforcement in China.
Common Contract Disputes and How to Prevent Them
After reviewing hundreds of manufacturing agreements and dispute cases, patterns emerge. Here are the five most common disputes and the specific contract language that prevents each one.
Dispute 1: "The Leather Looks Different"
The scenario: The bags arrive and the leather color is noticeably different from the sample you approved. The factory says "leather is a natural material — some variation is expected." You disagree.
Prevention: Specify color tolerance using objective standards. "Color shall match approved PP sample within Delta E ≤ 1.5 as measured by spectrophotometer." Include a signed, dated physical color swatch as a contract exhibit. Define acceptable grain pattern variation with photographic reference examples attached to the contract.
Dispute 2: "We Never Agreed to That Specification"
The scenario: You requested 8 stitches per inch. The factory produced 6 per inch. The contract says "quality stitching" without specifying a number. The factory argues their work meets "industry standard."
Prevention: Never use subjective quality language. Replace "good quality leather" with "full-grain cowhide, minimum 1.0mm thickness, vegetable-tanned, LWG Gold Certified." Replace "strong stitching" with "minimum 8 stitches per inch on all structural seams, using bonded nylon thread, ticket #60."
Dispute 3: "The Mold Is Ours"
The scenario: You paid $2,000 for custom logo plate molds. You want to switch manufacturers. Your current factory says the molds belong to them because they were "made in our facility."
Prevention: Explicit mold ownership clause: "All custom molds, dies, patterns, and tooling manufactured or procured in connection with the buyer's orders, whether paid for directly by the buyer or amortized into unit pricing, shall remain the exclusive property of the buyer. The manufacturer shall mark all such tooling with the buyer's name and shall not use said tooling for any purpose other than fulfilling the buyer's orders. Upon written request or contract termination, the manufacturer shall return all such tooling within 15 business days at the manufacturer's expense."
Dispute 4: "The Price Went Up"
The scenario: You agreed on $28/unit for a 2,000-unit order. Three months into production, the factory says leather prices went up and the new price is $34/unit. You're halfway through and can't easily switch factories.
Prevention: Fix the price in the contract with a clear adjustment mechanism: "Unit price is fixed at $28.00 USD per unit for the duration of this Purchase Order. Any request for price adjustment due to raw material cost changes must be submitted in writing with supporting documentation (supplier invoices) and is subject to mutual written agreement. No price increase shall apply to units already in production or units for which materials have already been procured."
Dispute 5: "Your Order Is Delayed Because of Your Late Approval"
The scenario: Delivery is late. The factory blames you for taking 10 days to approve the PP sample. You say they should have started other work in parallel. The contract is silent on approval timelines.
Prevention: Include buyer obligation timelines: "Buyer shall respond to sampling submissions within 5 business days. Buyer's approval of PP sample is required before bulk production commences. Production lead time commences on the date of buyer's written PP sample approval. Delays caused by buyer's late approval shall extend the delivery date by a corresponding number of business days." This protects both parties by making responsibilities and timelines explicit.
Contract Template Checklist: Before You Sign
Use this checklist before executing any bag manufacturing contract. Each item should be present and clearly defined:
| ✓ | Contract Element | Risk If Missing |
|---|---|---|
| ☐ | Complete technical specifications (attached as exhibit) | Quality disputes; "you never specified that" arguments |
| ☐ | Approved PP sample signed and dated by both parties | No objective quality benchmark |
| ☐ | Unit price with currency, Incoterms, and adjustment mechanism | Unexpected price increases; currency loss |
| ☐ | Payment terms with clear milestone triggers | Cash flow risk; loss of quality leverage |
| ☐ | Delivery schedule with late penalty clause (capped) | Endless delays with no recourse |
| ☐ | AQL standard and inspection rights (including third-party) | No quality enforcement mechanism |
| ☐ | IP ownership clause (designs, molds, tooling) | Factory sells your design to competitors |
| ☐ | Standalone NDA (signed before design sharing) | Design leakage; unauthorized production |
| ☐ | Mold ownership and return obligations | Cannot switch manufacturers without losing tooling investment |
| ☐ | Breach definition with cure period and liquidated damages | No enforcement mechanism for non-compliance |
| ☐ | Dispute resolution method and governing law | Expensive, unenforceable litigation in foreign jurisdiction |
| ☐ | Termination clause with transition assistance | Locked into unsatisfactory relationship |
| ☐ | Force majeure with specific definitions | Every delay becomes a "force majeure" excuse |
| ☐ | Buyer obligation timelines (approval windows, etc.) | Factory blames buyer for delays caused by unclear responsibilities |
| ☐ | Confidentiality survival period (post-termination) | Factory shares your info immediately after contract ends |
If any of these items are missing, don't sign. Request amendments. A manufacturer who resists including basic protections in their contract is signaling that they don't plan to be held accountable — and that's information you need before you send a deposit.
How Bespoke Bags Approaches Contracts and IP Protection
We believe that a good contract makes both parties more comfortable, not more adversarial. Here's how we handle the key areas:
- Transparent specifications: Every order is backed by detailed technical documentation. We create PP samples, get your written approval, and production matches that sample — period.
- Clear IP boundaries: Your designs are yours. Our OEM/ODM manufacturing agreement explicitly assigns all custom designs, patterns, and tooling to the buyer. We sign NDAs before any design exchange.
- Standard 30/70 payment terms: We use the industry-standard structure, with the 70% balance released after passing pre-shipment inspection. For repeat orders, we offer flexible terms based on order history.
- Quality guarantees: We operate to AQL 2.5 standard (AQL 1.5 available for luxury clients). Third-party inspections are welcome and facilitated. Any quality claim within the agreed window is resolved at our cost.
- Dispute resolution: Our contracts include a stepped resolution process: negotiation → mediation → arbitration. We've never had a contract dispute reach arbitration — because we resolve issues at the conversation stage.
Our 20+ years of experience serving international brands has taught us that the best contract is one that both parties never need to reference because the relationship runs on mutual respect and clear communication. But when things do go wrong, having the right language in place makes resolution fast and fair.
Limitations and Scope of This Guide
This guide covers essential contract clauses and IP protection for bag manufacturing agreements based on our 20+ years of experience as a bespoke bag programme coordinator in Quanzhou, China. Key limitations:
- Payment term structures reflect common industry practice in China; actual terms may vary based on order volume, buyer-seller relationship, and trade assurance platforms.
- IP protection clause values and enforcement mechanisms are illustrative; legal enforceability depends on jurisdiction and specific contract language reviewed by qualified attorneys.
- This guide covers manufacturing contracts for finished goods; licensing agreements, distribution contracts, and franchise arrangements require different legal frameworks.
For advice tailored to your specific situation, contact our team directly.
Frequently Asked Questions
Should I hire a lawyer to review the manufacturing contract?
Yes — especially for your first contract and for orders exceeding $20,000. A lawyer with international trade experience can identify gaps that a generic template will miss. Budget $500–$2,000 for a thorough review. This is a small investment relative to the risk of a poorly drafted agreement. For ongoing relationships, establish a relationship with a trade attorney who can review amendments and new contracts as your business grows.
What jurisdiction should govern the contract?
For contracts with Chinese manufacturers, the most enforceable approach is arbitration (not litigation) through an internationally recognized body like CIETAC, HKIAC, or ICC. Court judgments in China are difficult to enforce in the US and EU, and vice versa — but arbitration awards are enforceable in over 170 countries under the New York Convention. Avoid choosing one party's home court; instead, select a neutral arbitration venue.
Is a factory's own contract template acceptable, or should I provide my own?
Both approaches work, but you should review any factory-provided contract carefully — it will naturally favor the manufacturer's interests. If you provide your own template, expect negotiation on payment terms, liability caps, and termination clauses. The healthiest approach is to start from a balanced template (like the checklist above) and negotiate specific terms together. We provide our clients with a clear manufacturing agreement that covers all essential clauses before production begins.
How do I protect my design when working with multiple factories?
Use component separation — different factories handle different parts of the product so no single factory has the complete design. Sign separate NDAs with each factory. Register your design patents and trademarks before sharing any designs. Include explicit IP clauses in every contract. For hardware, own the molds and move them between factories as needed. For leather cutting patterns, keep the full pattern with one trusted design partner and share only the relevant sections with subcontractors.
What should I do if a factory breaches the contract?
Follow the contract's dispute resolution process: first, document the breach with photographs, measurements, and correspondence. Send a formal written notice specifying the breach and requesting cure within the contractual timeframe. If the factory doesn't resolve the issue, escalate to mediation, then arbitration as specified in your contract. Preserve all evidence — inspection reports, photos, email threads, sample comparisons. If the breach involves IP theft, consult a lawyer immediately about emergency injunctive relief in addition to the contractual dispute process.
Last Updated: August 14, 2026
How long should the price validity period be on a leather bag manufacturing agreement?
Leather hides move quickly, so a fixed quotation usually carries a 90-180 day validity window. Beyond that, a renegotiation trigger tied to documented tannery invoices protects both sides. A bespoke bag specialist states the currency, the fluctuation tolerance and the Incoterm - FOB Xiamen on most programmes - so landed cost planning stays predictable across repeat seasons.
Who owns the tooling when the mold cost is amortised into the unit price?
Amortisation changes how the cost is paid, not who owns the asset. The contract should state that any die, mould or pattern created for the programme remains buyer property even when its cost is recovered across units. Ask your programme coordinator for serial-numbered photographs of each tool and a written return commitment of 15 business days after termination.
What late-delivery penalty is realistic for a 35-50 day bulk production window?
A penalty of 0.5-1% of order value per week of delay, capped at 5-10%, is the range most suppliers accept without inflating the unit price. The clock should start on written pre-production sample approval rather than deposit receipt, and buyer approval windows must be stated too, otherwise genuine delays get argued as buyer-caused.
Should the AQL level be written into the contract or only into the inspection report?
Write it into the contract. AQL 2.5 under ISO 2859-1, single sampling, general inspection level II, is the common benchmark for bags; luxury programmes often tighten to AQL 1.5. Putting the standard, the defect classification and the remedy - rework, replacement or rejection with refund - into the agreement removes any argument about which number applies when a shipment is borderline.
How is the 30% deposit protected if bulk production never starts?
Tie the deposit to a defined milestone rather than a calendar date: material procurement evidence, cutting confirmation or a scheduled inline inspection. If the programme stalls, the clause should allow refund of the unspent portion. Payment by T/T against a proforma invoice with the same specification attached keeps the record consistent on both sides.
Does force majeure cover raw material shortages or a sudden leather price increase?
It should not. A well drafted clause lists only genuinely external events - natural disaster, government action, epidemic control measures - and expressly excludes material shortage, labour issues and cost inflation. Otherwise every schedule slip becomes an excuse. Price movement belongs in the price adjustment clause, handled with documented supplier evidence instead of delay.
What should the contract say about overrun units and rejected goods?
State a tolerance, typically 3-5% over or under the ordered quantity, and require written approval before any excess ships. For units failing AQL 2.5, define whether the remedy is rework at the supplier cost, replacement in the next shipment, or refund. Overruns produced without approval should never be invoiced or sold into any channel.
How long should confidentiality obligations survive after the contract ends?
Three to five years is standard, with intellectual property and trade secret provisions surviving indefinitely. The clause should name what is protected - tech packs, patterns, pricing, customer lists - and require either destruction or return of files. A bespoke bag specialist will also accept a written certificate of destruction dated at the end of the survival period.
Is an NDA signed in the buyer home country enforceable against a Chinese supplier?
Enforceability improves sharply when the NDA is bilingual, governed by a neutral or Chinese law, and paired with rights registered in China - trademark, design patent and customs recordation. A standalone NDA signed before any tech pack is exchanged is far more useful than one buried inside the manufacturing agreement. Register first, then share files in stages.