Most OEM disputes do not start with bad faith. They start with a contract that was never specific enough. A quotation, a WeChat message and a proforma invoice are not a manufacturing agreement, especially when custom molds, private label packaging and multi-stage payments are involved.
This article lists the 12 clauses we recommend buyers verify before signing. It is not legal advice, but it is a practical checklist you can take to a lawyer or use in negotiations.
1. Parties and scope
Identify the legal entity, not only the trade name. Define the products, models, quantities and services covered. If packaging or certification is included, list it explicitly.
2. Specifications and approved sample
Attach a written specification sheet and reference an approved physical sample or photo record. Include height, weight, material, skeleton, skin tone, hair, eyes, paint, accessories and packaging. The sample should be the benchmark for the production run.
3. Material and certification
State the material grade and curing system, and list the certificates or test reports the factory will provide. Clarify who pays for testing and what happens if a batch fails.
4. Quality control and AQL
Define the inspection standard, sampling method and acceptable quality level. Specify whether the buyer or a third party can inspect before shipment, and what evidence (photos, video, report) will be provided.
5. Lead time and delays
Set a production timeline with milestones: sample approval, material preparation, production, QC and shipment. Define what counts as a delay and whether penalties, discounts or cancellation rights apply.
6. Payment terms
Clarify deposit, balance, currency, bank charges and payment method. Link the balance to a milestone such as QC approval or shipment, not only to production completion.
7. Intellectual property
State who owns the design, sculpt, mold, packaging artwork and photography. If you paid for a custom mold, specify ownership, storage, transfer and destruction terms.
8. Exclusivity
If you need exclusivity, define the territory, duration, minimum volume and what happens if the volume is not met. Exclusivity without a volume commitment is usually not sustainable for the factory.
9. Warranty and defects
Define the warranty period, what is covered, what is excluded and the remedy (repair, replacement, credit). Exclude normal wear, heat damage, staining and improper storage, but make the process for genuine defects clear.
10. Shipping terms
Use Incoterms and specify the port or door. Clarify who arranges freight, insurance and customs clearance, and who bears risk at each stage. Confirm packed weight and carton dimensions.
11. Confidentiality
Protect your designs, customer lists and marketing plans. A mutual NDA is common, but it should be signed before detailed designs or customer data are shared.
12. Dispute resolution
Choose the governing law, jurisdiction and dispute process. For cross-border orders, mediation or arbitration may be more practical than litigation. Make sure the clause is enforceable in the factory's country.
Factory note: the clause buyers most often forget is mold ownership. Paying for a mold does not automatically mean you own it or can move it to another factory. Put it in writing, with a photo of the mold and a clear transfer procedure.
A simple signing checklist
- Specification sheet attached and signed.
- Sample approved and stored.
- Payment milestones linked to QC and shipment.
- Mold ownership and transfer defined.
- Warranty exclusions and remedy process clear.
- Incoterms and insurance confirmed.
- Dispute process agreed.
FAQ
Do I need a lawyer to review an OEM contract?
For a significant order or a custom mold, yes. A local lawyer familiar with import and manufacturing contracts can identify risks that a factory template may not cover.
Who owns the mold after the project ends?
This must be stated in the contract. Many buyers assume they own a custom mold because they paid for it, but ownership, storage and transfer terms are often ambiguous.
What is an acceptable QC clause?
A clear AQL level, inspection method, photo or video evidence, and a defined remedy for failed batches. Avoid vague language such as "good quality" without measurable criteria.
About this guide
This checklist is based on contract reviews and OEM project experience at CoolMate Silicone Doll Factory. It is general information, not legal advice. For project-specific terms, contact our team and consult your legal advisor.
Last reviewed: October 2026 by the CoolMate Silicone Doll Factory production team.
