Questions to Ask Before Signing a Manufacturing Contract

Who exactly are you contracting with?

Start with identity, because every other clause depends on it being right.

**Verify the legal entity.** The contract should name the full registered company, its registration number and its registered address — not a trading name, a brand name or a website. In Thailand, company records are held by the Department of Business Development and can be checked; confirm the current verification procedure with the authority or your own advisor rather than accepting screenshots.

**Confirm the signatory.** Ask who is authorised to bind the company and on what basis. A signature from someone without authority is a problem you discover only when you try to enforce something.

**Identify the manufacturing site.** This is the question buyers skip most often. The company you contract with is not always the company that makes the product. Ask: is the named entity the manufacturer of record, does it own the facility, and will my product be made there or subcontracted? If any part is subcontracted — filling, decoration, a specific process — the contract should say so and should say whether your consent is needed before a site changes.

**Match the bank account.** Payment should go to an account in the name of the contracting entity. A personal account, or an account in a third company's name, warrants a hard stop and a direct explanation.

**Check scope of licences.** Manufacturing cosmetics, food supplements and household products often sit under different permissions. A site licensed for one is not automatically licensed for another, which matters if your range spans categories.

Document all of this before negotiating commercial terms. Buyers evaluating skincare manufacturer in Thailand options frequently find that two apparently different suppliers are quoting the same facility.

Product specification and quality standards

A contract without a precise specification is a contract about nothing. This is where most quality disputes are won or lost before they start.

Ask whether the agreement includes, as an annex:

• **The approved formula reference**, identified by code and version, so both sides know which version was approved.
• **Finished-product specification** with measurable parameters and tolerances: appearance, colour, odour, pH, viscosity, fill weight tolerance, and microbiological limits.
• **The approved retained sample** — who holds it, for how long, and whether it is the reference in a dispute.
• **Component specification**, including supplier, material, decoration and artwork version.
• **Testing regime**: which tests are run per batch, by whose laboratory, and against which method.
• **Acceptance criteria and sampling plan**, stated explicitly rather than "industry standard".

Then ask the questions that reveal how this is handled in practice. Who signs off a batch as conforming? Will you receive batch records and certificates of analysis as a matter of course, or only on request? For how long are production records and retained samples kept, and can you access them during a complaint investigation? What is the procedure if the factory wants to substitute a raw material because of supply problems — your written approval, or notification after the fact?

A reasonable factory will have answers and documents ready. Vague answers here — "we always deliver good quality", "we have GMP" — are not reassurance; they are the absence of a specification. Ask that your own acceptance criteria be attached rather than relying on their general terms.

Intellectual property: formula, brand and artwork

This section is short in most draft contracts and expensive to get wrong.

**The formula.** Ask the direct question: who owns the formula used for my product, and can it be supplied to another brand? There are three realistic positions. A factory's existing base stays theirs and can be sold to others. A formula developed to your specification and paid for by you can be assigned to you. A jointly developed formula can be exclusive to you for a defined period or category. All three are legitimate; the problem is a contract that says nothing, which usually means the factory keeps it.

**Exclusivity, if agreed.** Define its scope: which formula, which markets, which product categories, and for how long. "Exclusive" with no scope is unenforceable in practice.

**Your brand assets.** The contract should confirm that your trademarks, artwork and packaging designs remain yours, that they are used only to manufacture your products, and that they are returned or destroyed on termination. Also ask whether the factory may photograph your product for its own marketing — many do, and some brands mind.

**Tooling and moulds.** If you paid for custom tooling, ask who owns it, where it is stored, whether it can be used for other clients, and whether you can collect it or have it transferred. Buyers who skip this find that components they paid to develop are not available elsewhere.

**Confidentiality.** A mutual NDA covering formula, specification, volumes and commercial terms, with a defined duration, and clarity on whether it survives termination. Ask that it extend to subcontractors.

**Dossiers and registrations.** If the factory prepares technical documentation for your market, ask who owns it and whether you receive a copy you can use if you change supplier.

Commercial terms: price, volume, payment and change

Price is not a number; it is a set of conditions. Make each one explicit.

• **What the unit price includes.** Bulk only, or filled, decorated, cartoned and palletised? Components supplied by whom? Which tests are included?
• **The volume the price assumes.** The standard contract-manufacturing minimum is 1,000 units per SKU, and it applies per SKU, so clarify whether your price holds at that level and what happens at the next step up.
• **Price validity and revision.** How long is the quoted price firm? On what basis can it change — raw material indices, currency, component cost? Ask for notice periods and the right to review rather than open-ended adjustment.
• **Payment stages.** Tie each payment to a verifiable milestone: sample approval, production start, pre-shipment inspection passed, documents released. Avoid a structure where most of the money moves before anything can be inspected.
• **Over- and under-runs.** Production rarely lands exactly on target. Ask what tolerance applies and who pays for the difference.
• **Who holds stock.** Finished goods, components and raw materials ordered for you all carry storage and obsolescence questions. If the factory buys components in a minimum run larger than your order, ask who owns and pays for the remainder.
• **Change procedure.** Any change to formula, component, supplier or site should require written approval. This single clause prevents the most common silent-substitution problems.

Ask one more thing before you sign: what is the quoted lead time contingent on, and what does the factory consider a delay caused by you? Clear scheduling assumptions prevent arguments where both parties think they are owed time. Terms vary with product and volume, so expect these to be confirmed at quotation rather than published.

Liability, failure and exit

Judge a contract by what it says about the bad days. Work through each scenario and ask what the agreement provides.

**A batch fails specification before shipment.** Who bears the cost of rework, replacement or disposal? What is the timeline?

**A batch fails after it reaches you.** How is the claim raised, within what period, and what evidence is required? Is the remedy replacement, credit or refund — and is it capped?

**The product causes a consumer complaint.** Who holds product liability insurance, for what sum, and in which territories? Ask for a certificate rather than an assurance.

**A recall is needed.** Who decides, who notifies authorities, who pays, and how is traceability established? This is where batch records stop being paperwork.

**The factory misses the schedule.** Is there any remedy, and at what point can you cancel and recover a deposit?

**Either party wants out.** Notice period, treatment of work in progress, return of artwork, tooling and retained materials, and whether you can obtain your technical documentation.

**Dispute resolution.** Governing law, forum, and language of the contract. If the agreement exists in two languages, ask which version prevails — a clause buyers routinely ignore and occasionally regret.

**Force majeure.** Check how broadly it is drafted. A clause wide enough to cover ordinary supply difficulties removes your protection on schedule entirely.

Also confirm indemnities run both ways. Many drafts protect the manufacturer against claims arising from your brand decisions without providing you equivalent protection for defects arising from their manufacturing.

Before you sign: the practical sequence

Contract review is the last step, not the first. The order below reduces how much you need the contract to protect you.

1. **Verify the entity and the site** before you discuss price. Everything downstream relies on this. 2. **Approve a sample and the retained reference** before signing a production agreement, so the specification in the contract describes something real. 3. **Have the specification annexes drafted by whoever understands the product**, then read them yourself line by line. Most contract disputes are specification disputes wearing a legal costume. 4. **Get legal review in the jurisdiction that governs the contract.** A review under your own law of a contract governed by another is of limited use. 5. **Run a trial order** under a short-form agreement before committing to a long-term or exclusive arrangement. One order run end to end tells you more about a supplier than any clause. 6. **Keep a second qualified supplier.** Shortlisting several Thai OEM/ODM factories, whether through a verified-supplier platform such as THAIMOST (thaimost.com) or your own list, gives you both a price reference and an alternative if the schedule slips.

A final note on scope creep. Brands often sign one agreement and then add categories under it — a body care OEM line, a home fragrance OEM product — assuming the terms carry over. Licences, specifications, testing and liability differ by category, so each addition deserves its own annex at minimum. Build your supplier shortlist and your contract template to expect that, and the second product is far easier than the first.