Sign cosmetics OEM What must be confirmed before signing a contract?

1. Clauses 01 to 03: Subject, project scope and document priority

Clause 01 is to check the signing, collection, invoicing and actual production entities. If a sales company signs a contract, is associated with factory production, or outsources part of the process, the relationship between the parties, production address, license scope, and responsibilities should be clearly stated. Clause 02 is the product scope: product name, dosage form, capacity, quantity, target market, sales channels and intended use must be entered into the attachment.

Item 03 is file priority. There may be conflicts among contracts, quotations, product specifications, formula versions, packaging material BOM, design drafts, sample signing sheets, and quality agreements. It should be agreed upon which document and version shall prevail, and how subsequent written changes will replace the old version.

• 01 Contract subject and actual production subject
• 02 Products, quantity, target market and service scope
• 03 Priority of main contract, quality agreement and technical attachments

2. Clause 04: Source of formula, right to use and confidentiality

The contract should indicate whether the formula is provided by the brand, matured in the factory, adjusted by both parties, or developed from scratch. Formula rights are at least broken down into ownership, production and use rights, market or category exclusivity, license period, whether it can be transferred to another factory, restrictions on similar plans and what to do after termination. Simply writing "recipe buyout" is usually not enough to answer these questions.

The scope of confidentiality includes not only percentage formulas, but also samples, raw material lists, process parameters, quotations, suppliers, test data, designs and sales plans. The persons allowed to have access, the purpose of use, the storage period, the method of return or destruction, and exceptions for submitting information to regulatory agencies in accordance with the law should be agreed upon.

3. Clauses 05 to 06: Material procurement, packaging materials and molds

Article 05 should clearly state who purchases raw materials and packaging materials, how the brand approves suppliers and samples, who handles unqualified incoming materials, how the loss ratio is calculated, who owns the remaining materials, how long they will be kept, and whether there are any charges for warehousing. When a brand prepares its own packaging materials, it must also agree on the arrival time, transportation damage and line suspension responsibilities due to unsuitable packaging materials.

Clause 06 involves molds, knives, printing plates, color plates and design source files. Payment does not of course equal the transfer of ownership and should indicate the nature of the fee, ownership, place of storage, maintenance, modifications, restrictions on use by third parties, return and scrapping after termination of cooperation.

• 05 Raw materials, packaging materials, losses, remaining materials and supplier responsibilities
• 06 Ownership of molds, knives, printing plates and design documents

4. Clause 07: Proofing, signing and version freezing

Each round of samples should have a number, date, recipe version, adjustment goals and feedback records. The final signature must simultaneously freeze the contents, direct contact with packaging materials, printing colors, outer box structure and label documents. The brand and factory shall store sealed samples separately and indicate the quantity, storage conditions and validity period of the sealed samples.

Mass production cannot only use "consistency with samples" as the standard. Measurable indicators should be written into product specifications, and color, aroma, skin feel and appearance that are difficult to fully quantify should be managed with standard samples, limit samples, color difference values ​​or methods recognized by both parties.

5. Clauses 08 to 09: Quality Standards, Inspection and Acceptance

Clause 08 stipulates the inspection items, methods, sampling, acceptance limits, outsourcing inspection, reporting format and release authority for raw materials, semi-finished products, finished products and packaging. Clause 09 stipulates the acceptance period after the brand receives the goods, appearance sampling inspection methods, functional testing, hidden defect treatment, re-inspection agencies and the disposal of non-conforming products.

The terms of the contract under the Civil Code list quality, material supply, performance period, acceptance standards and methods as general contents. For cosmetics projects, acceptance must at least cite product specifications, sealed signature samples, packaging limit samples and inspection standards confirmed by both parties to avoid disputes based solely on subjective impressions.

• 08 Quality standards, inspection, sampling and batch release
• 09 Receipt and acceptance, objection period, re-inspection and non-conformity handling

6. Clause 10: Sample retention, stability and traceability data

The sample retention terms should indicate the quantity of each batch of retained samples, final packaging form, storage conditions, storage period, calling authority and destruction record. The purpose of stability samples and quality samples are different and cannot be confused; when there are long-term observations or specific market requirements, the test conditions, time points, fees and report delivery should be agreed separately.

Brands should obtain a list of traceability information that matches product responsibility, such as batch numbers, production dates, recipe versions, key ingredient batches, finished product inspection reports, release information and shipping records. When a complaint occurs, both parties can quickly locate the batch.

7. Clause 11: Liability for delivery, suspension and extension

Don’t just write “delivery within 30 days after receipt of deposit”. The delivery period should start from the day when all conditions such as formula signature, packaging materials, design draft confirmation, and necessary documents are met, and the handling of brand delay confirmation, special raw material delay, regulatory changes, and force majeure are listed.

Extension liability can be graded by impact: notification of minor extensions and new plans, remediation in the event of a loss of activity windows, release rights, material and payment settlement in the event of long extensions. Whether liquidated damages are applicable, capped, and proof of loss should be reviewed by a lawyer in the context of the transaction.

8. Clause 12: Change Control and Raw Material Substitution

Any changes to formula, fragrance, color number, raw material supplier, packaging material structure, printing, production site, process or inspection standards should be subject to written application, risk assessment, brand approval and version update. "Substitution of equivalent raw materials" cannot be used to generalize all situations.

Changes may affect stability, safety assessments, filing materials, labeling and evidence of claims. The contract should explain which changes require re-sampling, re-testing, re-notification or adjustment of delivery date, and what alternatives both parties have in case of emergency shortage of materials.

9. Article 13: Complaints, Recalls and Loss Allocation

Complaint and recall provisions should provide for contact persons, response time frames, sample and record containment, batch traceability, investigation methods, regulatory reporting, inventory segregation, consumer communications, and corrective and preventive actions. Investigate the cause first, and then allocate costs based on responsibility. It cannot be assumed that all complaints will be borne by one party.

Different responsibilities may arise from formula design, brand labeling, storage and transportation, raw materials, production deviations, packaging material failure and consumer misuse. The parties should also agree on product liability insurance, recall drills, data retention and the involvement of local responsible persons in cross-border projects.

10. Clauses 14 to 15: Intellectual Property Rights, Termination and Dispute Resolution

Article 14 protects trademarks, packaging designs, photographic materials, recipes, processes and commercial information. Factories are not allowed to use brand samples and orders as public examples without permission; brands are also not allowed to use unauthorized third-party trademarks, patents or designs. When an infringement claim occurs, notification, assistance and liability must be agreed upon.

Article 15 deals with the termination of cooperation: how to settle unproduced materials, work-in-progress, remaining materials, molds, documents, data and final payment, whether after-sales and recall obligations continue, and applicable law, jurisdiction or arbitration. Writing the exit mechanism clearly can often reduce risk more than just writing about the start of the collaboration.

• 14 Trademarks, formulas, designs, patents, case presentations and confidentiality
• 15 Termination of settlement, continuing obligations, applicable law and dispute resolution

11. Final verification method before signing the contract

Put 15 items into a table, and fill in each item with the responsible person, deliverables, completion date, acceptance evidence, and exception handling. Any place that says "according to industry practice", "to be negotiated separately by both parties" and "qualified quality" without attachments or methods needs to continue to be specific.

Before signing, it will be reviewed separately by purchasing, product, quality, finance and legal affairs. The product team confirms samples and formulas, the quality team confirms inspection and traceability, finance confirms taxes and payment nodes, and lawyers review breach of contract, intellectual property rights, recalls and dispute resolution.