Cosmetics OEM Contract Guide

Cosmetics OEM Contract Guide — Huabaotang Biotechnology provides professional cosmetics OEM/ODM manufacturing services. 10 years of industry experience, GMPC/ISO22716 dual-certified factory.

Essential Clauses for Cosmetics OEM Contracts

1. Intellectual Property Ownership

• Custom formula: Who owns it? Can the factory provide it to others?
• Packaging design: Copyright ownership and usage rights
• Trademark: Factory's usage scope during production
• Recommended clause: "Custom formula is owned by the client. The manufacturer shall not provide the formula to any third party. Violation penalty: $XX,XXX."

2. Formula Confidentiality

• Sign a separate NDA (Non-Disclosure Agreement)
• Define scope: formula, process, raw material supplier info
• Duration: 3-5 years after contract termination
• Penalty: Specific damages for formula leakage

3. Quality Standards

• Specifications: Sensory, physicochemical, microbial indicators
• Standards: National/regional standards or agreed-upon specs
• Test reports: Per-batch factory inspection reports
• Sample retention: Retain samples per batch for minimum 2 years

4. Delivery & Inspection

• Delivery date: Specific date or timeframe
• Delivery method: Factory delivery / logistics / client pickup
• Inspection: Against sealed sample, sampling ratio
• Inspection period: Within X days of receipt
• Non-conformance: Return, rework, or price reduction

5. Payment Terms

• Deposit: Typically 30%
• Balance: 70% after inspection
• Method: Bank transfer / L/C
• Invoicing: VAT invoice or commercial invoice

6. Breach of Contract

• Late delivery: X% of contract value per day
• Quality issues: Free rework / return / compensation
• Formula leakage: $XX,XXX penalty
• Late payment: X% per day

7. Registration Ownership

• Under whose name is the registration filed? (Recommend: client's name)
• Can registration transfer to another factory?
• Who bears registration costs?

8. Force Majeure

• Define scope (natural disasters, pandemic, policy changes)
• Notification obligation and proof requirements
• Contract modification or termination

Contract Signing Tips

• No verbal agreements: All promises must be in writing
• Attachments matter: Sealed sample, formula sheet, quality specs, packaging design
• Dispute resolution: Arbitration or litigation, jurisdiction
• Legal review: Have a lawyer review before signing

Huabaotang Contract Guarantees

• Standardized OEM contract template provided
• NDA available
• Formula exclusivity clause included
• Quality based on sealed sample
• Per-batch inspection reports + sample retention
• Registration under client's name

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