What should a private label or contract manufacturing agreement contain?
The product specification and approved sample, batch acceptance, price, a payment period (60 days under Directive 2011/7/EU unless expressly agreed otherwise), an Incoterms 2020 delivery term, confidentiality, formula ownership, liability, force majeure, governing law and dispute resolution. No EU or ICC model was found; the EU IP Helpdesk's guide of 15 December 2020 lists general clauses.
What do the official guides say a contract should cover?
Neither the EU nor the International Chamber of Commerce (ICC) publishes a model for a private label or contract manufacturing agreement, as far as NordSourced could find. The closest checklist is the EU IP Helpdesk's "Your Guide to IP and Contracts" of 15 December 2020, which lists general clauses for contracts involving intellectual property (IP).
- Recitals and parties
- Definitions and the object of the contract
- Duration and the obligations of each party
- Price and payment
- Subcontracting
- Data protection
- Waiver and severability
- Warranties and indemnities
- Governing law and jurisdiction, with alternative dispute resolution
- Force majeure
The guide has no chapter on manufacturing or supply, but it states the point plainly: "Protecting and managing IP through well-drafted agreements is key for business success." The World Intellectual Property Organization (WIPO) names "conducting collaborative research or manufacturing with another organization" as one reason a company has to share confidential information.
Which clauses does a manufacturing agreement need, and why?
The Helpdesk's general clauses, plus the ones that describe the product and the batch. The table lists both, with what each clause settles and why it matters to a brand. Where a source sets a rule, the row names it; the other rows are the practical content of a manufacturing order, written so you can check your draft against them.
| Clause | What it settles | Why it matters |
|---|---|---|
| Parties and production site | The company that makes your product, its registration number and the site | The company you checked is the one bound; see how to check a manufacturer |
| Product specification | Formula or design, ingredients or materials, pack, label, and the approved sample | Without it there is nothing to measure a batch against |
| Quality and batch acceptance | The tests each batch passes, the documents that come with it, how you accept or reject it | Your remedy for a faulty batch starts from this clause |
| Regulatory roles | For a cosmetic: who is the responsible person, who keeps the product information file, who notifies the product | Regulation (EC) No 1223/2009, Article 4(6), makes the brand that sells under its own name or trade mark the responsible person |
| Minimum order, forecast and lead time | The quantity per order, any yearly commitment, and what starts the lead time | A lead time on a website is not a term of your order; see how long it takes |
| Price | Unit price, what it includes, and how it changes when materials cost more | Development, samples, testing and packaging may be priced separately, so name them |
| Payment | Deposit, payment period and interest on late payment | Directive 2011/7/EU limits the period fixed in the contract to 60 calendar days, unless expressly agreed otherwise and not grossly unfair to the creditor |
| Delivery | The Incoterms 2020 rule and the named place | It decides where risk passes and who clears the goods for import |
| Subcontracting | Whether any step may be done by another company | The Helpdesk's sample clause asks for written consent to each subcontracting |
| Confidentiality | Your formula, specifications, prices and plans | It can sit inside this agreement; see whether you need an NDA |
| Intellectual property | Who owns the formula, designs, artwork and test results, by assignment or licence | An assignment transfers ownership; a licence does not |
| Exclusivity | Whether the manufacturer may sell the same product to other brands | With a product it already makes, it may, unless the agreement says otherwise |
| Warranties, indemnities and penalties | What each side assures, and what it pays if an assurance fails | In many European jurisdictions judges can reduce a disproportionate penalty (EU IP Helpdesk) |
| Force majeure | Events beyond either side's control | It can release both sides when performance becomes impossible |
| Duration and termination | Term, notice, and what happens to stock, packaging and formula documents at the end | It decides whether you can move production elsewhere |
| Governing law, courts and dispute resolution | Which country's law applies, and which court, arbitrator or mediator hears a dispute | Without a choice, the type of contract decides the law |
What does EU law say about payment terms between businesses?
Directive 2011/7/EU says "the period for payment fixed in the contract does not exceed 60 calendar days", unless the contract expressly agrees otherwise and the term is not grossly unfair to the creditor. Late payers owe statutory interest of "the sum of the reference rate and at least eight percentage points", plus a fixed EUR 40.
| Country | Statutory rate |
|---|---|
| Latvia | 10.40% |
| Lithuania | 10.15% |
| Estonia | 10.40% |
| Finland | 10.50% |
| Sweden | 10.00% |
Your Europe adds that "the interest is due from the day following the due date fixed in the contract", and that it is calculated on the amount including VAT (value added tax). The Helpdesk's guide notes that "it is common practice to include any agreed rate of interest payable on overdue amounts".
A Late Payment Regulation proposed by the Commission on 12 September 2023 would change these rules, but it is still a proposal. Parliament adopted its position on 23 April 2024, and the Legislative Observatory shows "Awaiting Council's 1st reading position" (checked 13 October 2026). The 2011 Directive stays in force; payment terms and Incoterms has more on terms in practice.
How should the agreement state delivery?
Name one Incoterms 2020 rule and a named place. Incoterms are the ICC's "set of eleven three-letter trade terms" (ICC), in force since 1 January 2020. For EXW (Ex Works), ICC Academy warns that "EXW is suitable for domestic transport and may cause seller or buyer problems if goods are intended to be exported."
For a buyer outside the EU, compare DAP (Delivered at Place) and DDP (Delivered Duty Paid). Under DAP, according to ICC Academy, "the buyer is responsible for carrying out and paying for import clearance", while "with DDP, the seller assumes this responsibility."
ICC's 2026 workplan says it will "begin work on the revision of the Incoterms® rules, laying the groundwork for Incoterms® 2030". No date for the new edition had been announced when this page was checked, so write "Incoterms 2020" in the agreement.
Who should own the formula, the artwork and the brand?
The agreement should say, for each one, because none of the sources gives a default for manufacturing. The EU IP Helpdesk describes an assignment as "generally understood as a permanent transfer of ownership", while "an IP licence is usually comparable to a rental; it does not imply the permanent transfer of the IP in question".
For a product developed for you, either have the formula, the specifications and the test results assigned to you, or state that they stay with the manufacturer and on what terms you may move production. The route decides the starting point; see who owns the formula.
Your brand name is protected by a registered trade mark, not by the manufacturing agreement; see trade marks before launch.
Is there a model contract I can start from?
Not for manufacturing. The ICC's list of model contracts has no contract manufacturing or private label model, but several cover parts of the relationship, and ICC's store prices each at EUR 49. The Helpdesk's warning applies to all of them: "Legal drafting is complex and requires a high level of legal expertise."
| ICC model | Edition | Publication | Covers |
|---|---|---|---|
| Model International Sale Contract | 2024 | 828E | The sale of the finished goods |
| Model Confidentiality Contract | 2024 | 833E | A non-disclosure agreement before talks |
| Model International Trademark License Contract | 2024 | 841E | Licensing a brand |
| Model International Transfer of Technology Contract | 2024 | 840E | Handing over know-how |
| Model Subcontract | 2011 | 706E | Work passed to a subcontractor |
For your own case, the European IP Helpdesk publishes its guides on IP and contracts, including the one this page draws on.
What does my situation decide for the agreement?
Your route and your market decide which clauses carry the weight. A ready-made product puts exclusivity and labelling first; a product developed for you puts ownership and development charges first; your own formula puts confidentiality and the return of documents first. Selling a cosmetic adds the regulatory roles, and selling outside the EU adds import clearance.
| Your situation | Clauses that carry the weight |
|---|---|
| A product the manufacturer already makes, under your brand | Exclusivity, label and artwork approval, the minimum per product |
| A product developed for you | Ownership of the formula and test results, development charges, sample rounds |
| Production to your own formula | Confidentiality, the return of your documents, changes the manufacturer may make |
| A cosmetic sold under your name | Who is the responsible person, who keeps the product information file, who notifies the product |
| A buyer outside the EU | The Incoterms rule, who clears import, the documents that travel with the goods |
Questions and answers
Is there an EU template for a contract manufacturing agreement?
No template was found. The EU IP Helpdesk's "Your Guide to IP and Contracts" (15 December 2020) lists general clauses for IP-related contracts but has no chapter on manufacturing, and the page of its newer guide on international business (4 March 2026) does not mention outsourcing. WIPO's trade secret guide mentions manufacturing only as a reason to share confidential information.
Can the manufacturer subcontract part of my order?
Only as far as the agreement allows. The EU IP Helpdesk defines it: "Subcontracting is the practice of assigning the tasks under a contract to an external professional or a company." Its sample clause lets the other party consent in writing to each subcontracting, and binds the subcontractor in writing to the contract's obligations and its confidentiality duties.
Which country's law applies if the agreement does not choose one?
The EU IP Helpdesk writes that "where the parties do not expressly agree on the applicable law, the type of contract determines the rules". For the sale of goods, it says, the law of the seller's country usually applies. The parties can instead choose the law of the country where they are established, where the contract is performed, or a third country.
What is the longest payment term I can agree with a manufacturer in the EU?
Directive 2011/7/EU says the payment period fixed in a contract between businesses does not exceed 60 calendar days, unless the contract expressly agrees otherwise and the term is not grossly unfair to the creditor (Articles 3 and 7). The EU IP Helpdesk adds that "national legislations usually contain limitations to the freedom of the parties", so check the law that governs your agreement.
What can a manufacturer charge if I pay an invoice late?
Interest at the agreed rate, or the statutory rate if none was agreed, plus a fixed EUR 40 per late-paid invoice. Your Europe says some countries set higher amounts based on invoice value, and further reasonable recovery costs can be claimed. Where no payment date was set, interest starts 30 calendar days after you receive the invoice.
Will the EU cap payment terms between businesses at 30 days?
Not so far. The Commission proposed a Late Payment Regulation on 12 September 2023, and France's comments in a Council working document of 30 October 2025 record that the Commission planned a 30-day maximum for all transactions. Parliament adopted its position on 23 April 2024; the Legislative Observatory still showed the file awaiting the Council's first-reading position on 13 October 2026. Directive 2011/7/EU applies meanwhile.
What is the difference between a warranty, an indemnity and a penalty?
The EU IP Helpdesk separates them. A warranty is an assurance, for example that the goods meet the specification. An indemnity is the compensation owed if a warranty is breached. A penalty usually has a punitive character, and in many European jurisdictions a judge can reduce it if it is disproportionate, so set amounts you could defend.
What does a force majeure clause do?
It frees both sides when something outside their control stops the contract. The EU IP Helpdesk writes that such a clause can "release the parties from their obligations under the contract if external factors beyond their control" render performance impossible. Name the events it covers, how quickly each side must give notice, and when either side may end the agreement.
Should a dispute with a manufacturer go to court or to mediation?
The agreement decides. The EU IP Helpdesk recommends a clause on alternative dispute resolution, such as out-of-court settlement, arbitration or mediation, naming the mechanism, the rules and the place. Its own sample clause sends disputes to WIPO mediation in Munich, in English. Without such a clause, a dispute goes to the courts the jurisdiction clause names.
Is a separate NDA needed if the agreement has a confidentiality clause?
For the talks before signing, yes. The EU IP Helpdesk writes: "It is also possible to include a confidentiality clause in any other agreement with business partners or with employees." That clause covers the relationship once signed; the formula you send while negotiating needs a non-disclosure agreement first. See whether you need an NDA.
What should I put in a contract with a cosmetics manufacturer in Latvia?
The same clauses as any manufacturing agreement, plus who is the responsible person under the EU Cosmetics Regulation and who keeps the product information file. Latvia's statutory late-payment rate for the second half of 2026 is 10.40%. NordSourced lists 13 cosmetics manufacturers in Latvia (data of 2026-10-14); see the Latvian cosmetics list.
Can I use an ICC model contract for private label manufacturing?
Only in parts. The ICC lists no model for contract manufacturing or private label supply. Related models are the International Sale Contract (2024, 828E), the Confidentiality Contract (2024, 833E), the International Trademark License Contract (2024, 841E) and the Subcontract (2011, 706E). ICC's store prices each model at EUR 49.
Who should keep the product information file for a private label cosmetic?
The responsible person, and the agreement should name who that is. Article 11(1) of Regulation (EC) No 1223/2009 says the file is "kept for a period of ten years following the date on which the last batch" was placed on the market. The CPNP notification gives the address where the file is readily accessible.
Where to go next
Sources
- Your Guide to IP and Contracts (15 December 2020), European IP Helpdesk (EISMEA). Checked 13 Oct 2026.
- IP guides, European IP Helpdesk. Checked 13 Oct 2026.
- Your Guide to IP Management in International Business (4 March 2026), European IP Helpdesk (EISMEA). Checked 13 Oct 2026.
- WIPO Guide to Trade Secrets and Innovation, Part IV: trade secret management, World Intellectual Property Organization (WIPO). Checked 13 Oct 2026.
- ICC model contracts (list with editions and publication numbers), International Chamber of Commerce, ICC Digital Library. Checked 13 Oct 2026.
- Model contracts and clauses, International Chamber of Commerce. Checked 13 Oct 2026.
- Directive 2011/7/EU on combating late payment in commercial transactions, Articles 2, 3, 6 and 7, legislation.gov.uk (The National Archives), text of the EU Directive. Checked 13 Oct 2026.
- Late payment, European Commission, Your Europe. Checked 13 Oct 2026.
- Procedure 2023/0323(COD): combating late payment in commercial transactions, European Parliament, Legislative Observatory. Checked 13 Oct 2026.
- Working Party on Competitiveness and Growth (late payment): comments by delegations, WK 13630/2025 INIT (30 October 2025), General Secretariat of the Council of the European Union. Checked 13 Oct 2026.
- Incoterms rules, International Chamber of Commerce. Checked 13 Oct 2026.
- Place of delivery and risk transfer in global trade contracts (31 July 2025), ICC Academy. Checked 13 Oct 2026.
- Incoterms 2020: DAP or DDP? (25 February 2025), ICC Academy. Checked 13 Oct 2026.
- 2026 Global Policy Commissions workplan, International Chamber of Commerce. Checked 13 Oct 2026.
- Regulation (EC) No 1223/2009 on cosmetic products, Articles 4 and 11, European Parliament and Council, hosted by the European Commission (DG SANTE). Checked 13 Oct 2026.
Directory figures are counted from the manufacturers listed on NordSourced, each listed because its own website says it makes products for other brands; see how we check. This page is general information, not legal advice. Found a mistake? Tell us.