WHY YOU SHOULD USE TERMS OF AGREEMENT
Make a written contract
When you have found suppliers and manufacturers to work with, we recommend that you write an agreement with them. Not just emails, but a signed contract. Putting your agreement in writing helps can help you in several ways. When you put everything in a contract to sign, it becomes very clear if you have understood each other clearly, and you will avoid misunderstandings. Having this kind of agreement also makes everything easier if the project doesn’t work out as planned.
You will appear more professional if you suggest to put an agreement in place. You will show that you are serious about your business, you are not a pushover, and that you know what you are talking about.
The Terms Of Agreement
What you need is TOA, or Terms Of Agreement. This is a contract between you and the supplier or manufacturer that clearly states what both of you should deliver and what the expectations are.
The TOA should include information about deadlines, order handling, delays, claims, quality levels, packing and everything you find important for your brand and business. You must make it clear what an acceptable quality level is for you, and how you will deal with it if it is not up to par.
If the supplier or manufacturer states that they don’t want or need a TOA, you should ask yourself WHY? Why are they reluctant to writing a TOA? Aren’t they prepared to live up to the terms?
Why you need TOA
Once with our first clothing brand, we had received a lot of orders from buyers in different countries. We placed the bulk production of these orders with a manufacturer in southern Europe in March and waited for the production and delivery in October. In September we found out that the factory weren’t producing our garments. Instead they had received much larger orders from bigger players, and they had determined to not make ours. We had a verbal agreement, but no written TOA. The verbal agreement was worth nothing and we had to call all our customers and tell them their orders weren’t coming. If we would have had a TOA we would have been in a completely different situation.
You should formulate terms of agreement that you find important and that are important to you. As inspiration you can take a look at our standard TOAs. You can find two terms of agreement templates in the member zone. One is fairly short and goes more into details concerning your business with the supplier and manufacturer. The other template uses a legal language and goes more in depth regarding the legal stuff.
We are not lawyers. Apparel Entrepreneurship DOES NOT provide any legal advice and you should consult with your own lawyer for legal advice.