The contract

The specific terms worth arguing over before a first production run rather than after one.

What to settle in writing

Minimum order, lead time and the price at each volume tier.

Who buys the materials, and who carries the risk when an oil price moves.

Who owns the packaging tooling and the label artwork.

What batch records they keep and whether you get them, which matters because it becomes your record.

And the specification: not "our soap" but the oil percentages, superfat, weight, dimensions and cure period.

Who owns the formula

A important clause.

If you brought the recipe, say so, and say that they may not make it for anybody else.

If it is their base, understand that you are buying a product they may sell to your competitor under a different band, which is what private label is.

And say who owns any improvement developed during the relationship, since that is where the argument actually happens.

Quality and rejection

Define what a reject is, in measurable terms: weight outside tolerance, a color off the standard, a scent below strength.

Agree how a rejected batch is handled and who pays.

Agree a retained sample from every batch, held by both sides.

And agree cure: a contract maker under deadline pressure has an obvious incentive to ship early, and an undercured bar is the failure that reaches your customer.

Getting out

Notice period, and what happens to stock, materials and tooling on the way out.

Whether you may take the formula and the specification to another maker.

And who the customer belongs to, if the copacker also sells.

A relationship ending badly with your formula, your artwork and six weeks of stock on their premises is the situation these clauses exist to prevent.

References