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Growing

The contract

Updated

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The contract matters more here than in most supply relationships, because the obligations under 21 CFR 111 do not move simply because the mixing does.

What it must settle

Minimum run and lead time. Price and what changes it. Who buys raw materials and packaging. Whose specifications govern. Yield assumptions, since the gap between assumed and actual yield is somebody's money. And who holds inventory and carries risk while they do.

Who owns the formula

State it explicitly: you developed it, they hold it in confidence, they will not make it for others, and it returns to you on termination.

Settle improvements they contribute, and settle whether they may use it as a base for their own stock products, which is common and worth knowing about in advance.

Who carries the regulatory responsibility

The clause specific to this category and the one most often left vague.

Both the manufacturer and the brand owner have obligations, and a brand owner does not escape responsibility by outsourcing manufacture. Settle who does identity testing, who holds specifications, who keeps batch records and reserve samples, who does finished product testing, and who is responsible for label compliance.

And settle your right to audit and to receive batch records for your product. Without that you have outsourced the making and kept the liability with no visibility.

Quality, rejection and exit

Define acceptable in numbers: assay ranges, blend uniformity criteria, fill weight tolerance, microbiological and heavy metal limits. Then define what happens when a batch misses, and who pays for materials, packaging and the run.

Retain the right to a reserve sample from every batch and keep them yourself as well.

And settle exit: notice on both sides, and what happens to your materials, packaging and finished stock in their building. That clause determines your leverage in any disagreement.

References

No published source. This page is written from practice rather than from published guidance. No extension service or agency publishes on this question for powders, so nothing here is cited, and it should be weighed as experience and not as a standard.
Written from published regulation and peer-reviewed work, not from a laboratory of our own. Your own certificates of analysis, your blend uniformity results and your own written specifications override anything general said here. Nothing on this site is a substitute for the records 21 CFR 111 requires you to keep.