A manufacturing contract is an agreement between a company and a manufacturer to produce goods according to specifications previously determined by the company. It is known as “contract manufacturing”.
The fashion industry is increasingly interrelated with different legal and social disciplines. These types of contracts can be, in some cases, very complex due to the following factors:
- The nature of the contracts.
- The diversity of jurisdictions involved in the production processes.
- The terms of reference in the commercialization of the products.
- The amount or value of the contract.
- The stipulated deadline for the delivery of the garments.
- The quality control required by the brand owners in the production process of their products.
The lawyer advising on this type of contract has an enormous responsibility towards his clients, he must provide comprehensive legal advice, which implies an exhaustive review of the different issues related to the fashion industry, which I will list below by way of example and not limited to:
- Intellectual Property: Legal protection of trademarks and other distinctive signs.
- Authorization from the owner of the trademarks for the production and commercialization of the products according to the terms of the contract.
- License agreement: There must be clear terms, and it must be identified which type of license applies for this type of contract. It must also be established whether it is an exclusive, time-limited or territorial license.
- Copyright: Recognize the authorship of the creation in designs, respect for economic and moral rights. Acts of reproduction without the permission of the holder of the intellectual property and copyright rights must be avoided.
- The originality of the designs: Artificial intelligence must be used appropriately.
- Truthfulness and faithful compliance with contractual clauses: All agreements or commitments between the parties must be fulfilled. If it is established that the production processes are carried out with methods and techniques that seek adequate protection and conservation of the environment, it is important to ensure that the company that assembles the product does not carry out practices that cause environmental damage such as water pollution that could harm the health of the inhabitants.
- The veracity of the production process of the garments produced as “sustainable fashion” must be accredited.
- There must be legal certainty that criteria such as “ecological laundering” are met.
- If the contract states that the product will be packaged with recycled materials, both in textile bases and in packaging materials, and that techniques will be incorporated in the production process of new biodegradable textile bases, this information must be one hundred percent verifiable.
- Respect for labor laws: Companies must pay labor benefits based on the labor law applicable to the country where the product is maquila. The hiring of minors must also be avoided.
- Respect and application of all the provisions established in the International Treaties ratified by the country where the product is maquila or produced, before the World Labor Organization (ILO).
- Occupational safety and risk prevention measures: Occupational risks to workers in the performance of their duties must be avoided, such as noise control of machines in production plants and adequate lighting during working hours.
- The “Code of Conduct and Guidelines Followed by Textile Brands” must be known exactly to comply with the terms of the contract.
- For advertising campaigns and consumer rights, the following aspects must be considered:
- Avoid the use of misleading advertising.
- Avoid discriminatory practices and violation of human rights.
- Respect the right to one’s own image.
15. The size system: The contract must contain clear and precise information about the territory on which the products will be marketed. Some countries use the “Anthropometric Study” as a reference, a quantitative study of the physical characteristics of men. This makes it possible to know the measurements and proportions of the human body, since the morphology of the bodies is basic to establish a system of measurements for clothing.
We can conclude that it is very important to avoid ambiguous clauses when drafting this type of contract and the law applicable in this type of case must be clearly identified in order to avoid breaches that cause financial losses and legal disputes.