A JDA sets forth terms for collaborative product or technology development, addressing ownership, confidentiality, and IP outcomes. This playbook highlights best practices for defining contributions, milestones, and dispute resolution.
Why This Matters: Effective quality control provisions prevent brand damage and legal claims arising from substandard or noncompliant products while supporting efficient operations.
Negotiation strategy
If you're the Company A:
Ensure that quality control clauses are comprehensive and align with the company's brand standards. Negotiate for regular updates to quality standards to reflect industry changes.
If you're the Company B:
Advocate for reasonable quality control measures that do not impose excessive burdens. Ensure that approval processes are clear and timelines are feasible.
Essential elements
1
Quality Standards
Defines product/service quality benchmarks.
2
Approval Processes
Outlines steps for quality plan approval.
3
Monitoring Rights
Allows audits to ensure compliance.
Action framework
ACCEPT
Propose edits if quality standards are outdated or misaligned with current practices.
EDIT
Reject clauses that impose unreasonable burdens or conflict with operational capabilities.
ADD
Add clauses if quality control measures are absent or insufficient.
PRO TIP
Regularly review and update quality standards to align with industry best practices and regulatory changes.
Example clauses
FAVORABLE
Preferred Quality Standards
"The Parties agree to adhere to the quality standards set forth in Exhibit A, which are designed to ensure that all products and services meet the agreed-upon specifications and maintain the brand's reputation for excellence."
NEUTRAL
Brand-Specific Quality Standards
"Tailor clauses to reflect brand-specific needs without compromising efficiency."
UNFAVORABLE
Excessive Monitoring Requirements
"The Contractor shall allow unlimited audits at any time, which may disrupt operations."
Fallbacks
High-Risk Projects
In high-risk projects, stricter quality control measures may be necessary to mitigate potential liabilities and ensure compliance with safety standards.
International Operations
For international operations, quality control clauses should consider local regulations and cultural differences in quality expectations.
Start-Up Collaborations
In collaborations with start-ups, flexibility in quality control measures can foster innovation while maintaining essential standards.
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