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PLAYBOOK TEMPLATES

Manufacturing Services Agreement

A Manufacturing Services Agreement establishes how a manufacturer will produce goods on behalf of another party, often covering quality, delivery, and intellectual property. This playbook highlights negotiation tactics for pricing, warranty coverage, and supply chain continuity.

Payment Terms & Conditions

Why This Matters: Clear payment terms protect against cash flow disruptions and disputes over payment, minimizing financial and administrative risks.

Negotiation strategy

If you're the Company:

Ensure payment milestones are clearly defined and achievable. Confirm invoicing processes are detailed, including submission and approval timelines.

If you're the Contractor:

Negotiate for reasonable payment terms that align with your cash flow needs. Ensure late payment remedies are fair and enforceable.

Essential elements

1

Payment Schedule

Defines timing of payments.
2

Invoicing Procedures

Details invoice submission process.
3

Late Payment Remedies

Outlines penalties for late payments.

Action framework

ACCEPT

Propose edits if payment terms do not align with business objectives or cash flow needs.

EDIT

Reject if terms are overly burdensome or unenforceable.

ADD

Add if payment terms are missing or incomplete.

PRO TIP

Always ensure payment terms are consistent with internal financial policies and legal standards.

Example clauses

FAVORABLE

Preferred Payment Terms

"Payments shall be made in accordance with the following schedule: [insert schedule]. Invoices will be submitted [insert frequency], and payment is due within [insert number] days of receipt. Late payments will incur an interest charge of [insert rate] per month."
NEUTRAL

Standard Payment Terms

"Payments are due within 30 days of invoice receipt. No interest will be charged on late payments."
UNFAVORABLE

Unclear Payment Terms

"Payments shall be made as agreed. Late payments may incur penalties."

Fallbacks

International Transactions

If the contract involves international parties, include currency exchange provisions and international payment methods.

High-Risk Projects

For high-risk projects, ensure payment terms include upfront deposits and milestone-based payments to mitigate risk.

Long-Term Contracts

In long-term contracts, consider including periodic reviews of payment terms to adjust for inflation or changes in scope.
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