The following bilingual (Chinese/English) agreement is what we use to protect our clients when they’re ordering tooling in support of a new product development program. It defines who owns the tooling as well as the terms and conditions for it’s use. Good agreements that are clearly written in two languages make for healthy customer-vendor relationships. Please feel free to review and download our template.
TOOLING PURCHASE CONTRACT
模 具 采 购 合 同
The Buyer（Party A）:
The Seller (Party B)：
After friendly negotiation, Party A and Party B agree to and will comply with this Contract.
- 1. Contracted Goods: 合同产品：
产品名称/ Description of the Goods
模具数量/Quantity of Tooling
模具寿命(万次)/Mold life（10K times）
模具含税价格（元)/Tooling cost with taxes (CNY)
Party B should design and produce the Tooling based on the specification of the product (Appendix 2). The unit price for the Tooling mentioned above is denominated in CNY (inclusive of taxes), which includes the design, production, trial run cost, packing, transportation and any other costs related to the Tooling before the Tooling are approved by Party A.
2. Quality Standard: the quality of the contracted goods shall accord with the standards as follows (Select Multiple):
According with state standard and industry standard, if they are not the same, the higher standard shall prevail. Party B shall manufacture the Tools in accordance with the state of the art and in accordance with all relevant laws and regulations, especially with all tool safety, professional accident prevention and other safety regulation.
The products which are produced with the Tooling should meet the requirements of Party A, referring to standard of products in Appendix 2.
As the buyer, shall we also indicate in this contract with: 1) quantity of products to be produced by the Tooling; 2) quality warranty period for the Tooling?
3． Property Rights, Leasing & Maintenance 所有权、租借以及维护保管
3.1 The property rights of the Tooling and relevant technical documents will transfer to Party A after Party A’s inspection and acceptance (not subject to payment made by Party A). Party A can decide to store the Tooling at Party B’s location. Party B shall than use the Tooling to produce parts named by Party A in Party B’s factory. During the storage period, risk of damage and destruction of the Tooling is borne by Party B. Party B should maintain the Tooling in good condition. Should their be any damage to the Tooling, Party B should repair immediately the Tooling immediately and bear the related costs. Should the Tooling missing or cannot be repaired, Party B shall fully compensate Party A by the contract price stated in Article 1, except for agreed by Party A otherwise.
3.2 The Tooling are the property of Party A. Party A can remove part of or all of the Tooling anytime.
3.3 Party B shall mark all Tooling listed in this contract according to Party A’s requirements.
3.4 Party B shall record the Tooling respectively and keep it separating from Party B’s properties. Party B warranties that the Tooling shall, under any circumstance, be frozen, auction or other disposal as Party B’s own property. Party A shall be entitled to visit and check the Tooling from time to time.
3.5 Party B shall not make any lien to the Tooling under any circumstance.
3.6 Party B can’t move the Tooling to any other place without Party A’s consent in written form.
4．Sample of Products产品样品
Party B shall provide a sufficient quantity of samples which are produced by the Tooling listed in this contract according to the Appendix 2 before mass production of the products. After Party A inspects and confirms the suitability of the samples and provides written notice to Party B, Party B can then use the listed Tooling to carry out mass production in accordance with Party A’s purchase order.
5.1 Place of Delivery: The factory of Party B
5.2 Delivery Date:
Party B shall deliver the products in full at the destination as designated by Party A in a timely manner within the time schedule listed in the Purchase Order, which shall be concluded and signed by the Parties.
Party B shall deliver all products on________________. Should Party B desire to deliver the products before the date, Party B shall inform in writing and seek the approval Party A.
Others: Party B must complete fabrication of the Tooling within __ calendar days after receiving drawings from Party A, and provide sufficient quantity of compliant samples within __ calendar days after receiving drawings from Party A.
5.3 Party B should inform Party A in written form ___ working days in advance in case of any delay in delivery of the products or providing the service. Party A is entitled to decide whether it continues to purchase the products or does not under the written Purchase Order. If Party A chooses to terminate the Purchase Order, Party B shall pay liquidated damage at the rate of __% of the total price of the canceled Purchase Order.
5.4 In case Party B cannot deliver the products timely manner for the reasons other than Force Majeure (products that are delivered that do not meet the requirement of the contract, are also deemed to be delivered late）, Party A has the right to require that Party B to pay liquidated damages at the rate of 1% of the total price of the delayed Purchase Order on the basis of each delayed calendar day. If the delay exceeds 5 calendar days, Party A is entitled to terminate the contract (or the delayed Purchase Order), Party B shall pay the liquidated damages at the rate of 10% of the total price of the contract （or the delayed Purchase Order） and the loss accordingly.
5.5 On delivery of the Tooling, Party B shall hand over to Party A the originals or reproducible copies of the Tooling drawings including CAD and models.
6．Inspection for Acceptance 验收
6.1 Party A will inspect Tooling according to the following means (Select all that apply)
Confirm the model, specification, packaging, quantity, etc.
Confirm the samples according to the standards listed in Appendix 2.
Inspect the products according to requirements of the contract
Install the products and commissioning
6.2 If Party A accepts the samples after inspection according to Appendix 2, both parties shall mark the samples with a permanent stamp and seal 2 original copies and hold a copy by each party.
6.3 If upon inspection of the samples Party A is of the opinion that the samples do not conform to the requirements of Party A, Party A shall have the right not to accept the Tooling. In such an event, Party B shall take all necessary actions as soon as reasonably practical to ensure the new samples meet the requirements of Party A in ____ calendar days. If satisfied with such action, both parties shall mark the samples with a permanent stamp and seal 2 original copies and hold a copy by each party. Otherwise, Party A has right to cancel this contract, and Party B shall pay the liquidated damages at the rate of ____％ of the contract price and the loss accordingly.
6.4 Invoice 发票
Invoices shall list the contract number and/or purchase order number and the amount stated in the invoice is consistent with that of duly delivered accepted products and/or Tooling, otherwise Party A is entitled to return such invoice and request Party B to reissue.
Party A shall make the payment as follows:
_______down payment of the contract value should be paid within_______ working days upon the signed contract; _______% of contract value should be paid within ______ working days after the acceptance inspection and receiving the invoice, for the total contract value ______ % will be paid within____ working days after ______ year from acceptance.
Others: After the samples are received and accepted by Party A, Party B shall issue the invoice with the amount confirmed by Party A. Party A shall pay for this invoice within __ working days upon receiving the invoice.
Regarding a signal tooling under this contract, Party B should return the said tooling cost within ____calendar days after the Purchase Orders of all the relative parts of the said tooling from Party A reaches _PCS. If the said tooling cannot produce at least _____pcs products, Party B shall return partial cost of the said tooling. The return amount = total tooling amount – (qty of actual qualified products/ required qualified products) * total tooling amount. Party B has right to knock off the said tooling cost from the latest payment of said purchase orders. Party B shall immediately compensate Party A suppose the latest payment is not enough to meet such knock off.
7.2 Payments by Party A shall not imply acceptance of supplies or services as meeting contractual requirements.
8．Intellectual Property Rights知识产权
8.1 The intellectual property rights of the tooling and relative parts listed in this contract belong to Party A. Without PartyA’s express permission in writing, Party B shall not sell the Tooling and the products produced by the Tooling to any other parties.
8.2 Party B warranty that the design, production of the tooling as well as the products produced by the tooling are free from any infringement to any third party’s legal rights, including without limitation to intellectual property rights.
8.3 Party A shall have the irrevocable, exclusive, permanent right to use any inventor’s, copyright or patent rights in the Tools to which Party B is entitled (if any). Party A shall also have the right to copy the Tools and to make it available to other vendors for their use.
During the storage period, Party B shall insure the Tooling for all risks. All fees shall be borne by Party B and a copy of the insurance shall be duly provided to Party A for file.
10．Technical Modifications 技术更改
10.1 From time to time, Party A is entitled to require Party B (in written form) to modify the technical requirements concerning the tooling as well as products under this Contract and as specified in Appendix 2. Party B agrees to comply with this said modification.
10.2 Any modification or change (including without limitation, materials, process, equipment or sub-supplier) made by Party B shall be prior communicated to Party A in written form and Party A’s acknowledgement in written form shall be obtained. Party B is not permitted to deliver modified tooling and/or products to Party A until having obtained written confirmation of the product modifications from Party A. Party B shall deliver those tooling and/or products produced in accordance with the original technical parameters in case of no written confirmation of the sample of the modified tooling and/or products from Party A.
Party B shall keep confidential all, including without limitation, commercial, financial and technical documents, knowledge and information provided by Party A under this Contract or during the performance of the contract as well as the achievement of this Contract. Such confidential information shall not be duplicated; they shall be used only for the purpose of this Contract and shall not to be disclosed to a third party or without prior written consent from Party A.
12．Subcontracting to Third Parties 分包给第三方
No Subcontracting, wholly or partly, to third parties is allowed without prior written approval from Party A otherwise Party A is entitled to terminate this Contract entirely or partially and claim compensation from Party B for compensation in case of sub-contracting.
13. The Prohibition of Commercial Bribery 商业贿赂之禁止
13.1 Party B shall never bribe the employees of Party A by any means, including but not limited to providing or promising to provide off-the-book rebate in secret, entertainment allowance, employment arrangement, travel home and abroad, present, discount for shopping and any other material benefits for the employees of Party A or their relatives shall be treated as commercial bribery, which shall be prohibited. Any breach of the aforesaid prohibition obligations Party A shall have the right to terminate the contract and claim for the liabilities for the breach of the contract against Party B.
13.2 Party B shall refuse any improper interests in any form required by the employees of Party A and shall provide relative evidence or clues to assist Party A to investigate and prosecute, which shall protect the legal rights and benefits of the Parties.
14. Party B shall not be exempted from the responsibility for the tooling and product quality stipulated in this contract even if it’s terminated.
15. During the term of this Contract, in case of the occurrence of one of following events, Party A shall be entitled to immediately terminate this Contract by informing Party B in written form 5 calendar days in advance but without taking any liability for compensation to Seller:
15.1 Major lawsuits appear; its legal representative or major managing personnel are involved in crime investigation; Party B is merged, acquired, shut down, liquidated; Party B fails to pay back loans or owe third parties goods amount and etc;
15.2 If Party B breaches obligations of Article 13.
16.1 The making, validity, interpretation, performance and resolution of dispute arising from this Contract shall be governed by the laws of P.R. China.
16.2 This Contract is written in both English and Chinese and both versions shall have equal legal effect. If there is any inconsistency between the two versions, the Chinese version shall prevail.
16.3 The Appendixes of this contract are:
Appendix 1: copies of business license and other certificates by Party B
Appendix 2: The Drawing & Spec of Parts
The Appendices hereto (including all annexes thereto) form an inalienable part of this Contract and shall have equal legal effect as this Contract.
16.4 Any dispute arising from the execution of or in connection with this contract shall be settled through friendly negotiation between both parties firstly. If no settlement can be reached on such dispute, the dispute shall be filed with the people’s court of the place where the Party A registered.
16.5 This contract goes into effect from two Parties seal on the contract, executed in 2 original copies; each party holds one of them.
Party A (Company seal): Party B (Company seal):
Authorized representative: Authorized representative:
Appendix 1: copies of business license and other certificates by Party B
Appendix 2: The Drawing & Spec of Parts