When sourcing products from Vietnamese manufacturers, having the right legal agreements in place is essential. These documents not only protect your intellectual property but also help avoid miscommunication, disputes, and financial loss. Let’s walk through the key agreements every international buyer should understand.
1. Standard NDA – Non-Disclosure Agreement
A Non-Disclosure Agreement (NDA) helps prevent confidential information from being shared with third parties. It is commonly signed when two parties collaborate—for example, a buyer and a supplier or a startup and an investor.
Key clauses to include:
- Definition of “Confidential Information”
- Exceptions where disclosure is permitted (such as legal requirements or professional advisors)
- Confidentiality duration
With NDAs, both trust and legal protection are strengthened from the beginning.
2. Non-Compete Clause
This clause restricts the supplier from working with your direct competitors. For example, the supplier may be prohibited from making similar products for a competing brand within 12 months of your contract ending.
However, keep in mind that non-compete clauses are unenforceable in certain jurisdictions—California being one prominent example. Always tailor the scope and territory to be reasonable and legally sound.
3. Non-Circumvention Clause (Including Customer/Employee Non-Solicitation)
This agreement prevents the supplier from bypassing your company to work directly with your customers or partners. It also blocks them from soliciting your employees.
Typical scenarios include:
- A factory introduced through a sourcing agent cannot approach the buyer directly.
- No hiring or communication with the disclosing party’s clients for a defined period (e.g., 24 months).
Such clauses are crucial for agents and intermediaries in Vietnam’s sourcing ecosystem.
4. Territorial Restriction / Market Exclusivity Clause
When working with Vietnamese manufacturers, it’s wise to include a clause that restricts where they can sell similar products.
This restriction can apply to:
- Specific countries (such as the U.S.)
- States or regions (such as California or Texas)
- Online marketplaces (like Amazon or Etsy)
These exclusivity agreements are vital to protecting your market position and brand integrity.
5. Tooling Ownership Agreement
If you pay for molds or tooling, ensure you legally own the tools. Without a formal agreement, the supplier could use your tooling for other clients.
This agreement should:
- Confirm your ownership of all tooling and molds
- Prohibit any unauthorized use for third-party production
Many buyers overlook this, leading to lost IP and product leaks.
6. Manufacturing Agreement / Supply Agreement
This is the foundation of your working relationship with a Vietnamese manufacturer. It governs the full scope of cooperation.
Must-have provisions include:
- Agreed pricing, MOQ, and production lead time
- Product quality requirements and AQL standards
- Payment terms and penalties for delays
- Defect management and dispute resolution
- Warranty, after-sales support, and liability coverage
Clear, detailed agreements can reduce misunderstandings and protect both sides in the long run.
🔚 Conclusion
Sourcing from Vietnamese manufacturers can be a smart and strategic move. However, without the proper agreements, your business may face unnecessary risks. By putting strong legal contracts in place—NDAs, non-compete clauses, exclusivity terms, and tooling ownership—you can build a secure and sustainable supplier relationship.
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