Several common types of contract: Toll manufacturing contract

Content
Contract form
- Written.
- Other forms of similar legal value
No specific regulations on this shall be applied.

Contractual subject matters
- All of commodities may be processed or toll-manufactured, except for those which are prohibited for business purposes.
In the case of processing or toll manufacturing of commodities which are consumed abroad by foreign traders, processing or toll manufacturing of commodities prohibited for business, export or import purposes may be licensed by competent authorities.

Items to be processed or toll-manufactured shall be pre-determined by referring to their samples, in conformity with standards agreed upon between parties or specified by laws.
Rights and obligations of the customer
- Provide a part or full of raw materials or other input products under terms and conditions of the toll manufacturing contract, or give an amount of money to buy input products based on the agreed quantity, quality and at the agreed price.
- Get all of the complete products, machinery or equipment which has been leased or rent, raw materials, components, inputs or waste products after discharge of the contract, unless otherwise agreed.
- Sell, eliminate, gift or donate the finished products at the toll manufacturing location, machinery or equipment which has been leased or rent, residual raw materials, components, inputs or waste products or scraps as per agreements and laws.
- Authorize their persons to check and control activities at toll manufacturing facilities, and send their experts to give technical instructions and carry out product quality assurance as agreed upon in the contract.
- Bear responsibility for legality in terms of the intellectual property right to products under the toll manufacturing contract, raw materials, input products, machinery and equipment necessary for toll manufacturing activities which are handed over to the toll manufacturer.
- Provide raw materials and other input products of which quantity and quality are agreed upon, within the duration and at the location agreed with the toll manufacturer; provide documents necessary for toll manufacturing activities.

- Instruct the toll manufacturer how to implement the contract in a due manner.

- Pay fee or toll agreed upon in the contract.

- Receive the contractual product from the customer of which the quantity, quality, and method, duration and location of receipt, have been agreed upon in the contract.

- Unilaterally terminate the contract and claim compensation for any loss or damage possibly resulted from the toll manufacturer’s severe breach of the contract.

- If the customer accepts the toll-manufactured product which does not meet required quality standards and require any correction thereof, and the toll manufacturer is unable to make such correction within the agreed duration, the customer shall be entitled to cancel the contract and claim any reasonable compensation.

Rights and obligations of the toll manufacturer
- Receive the partial or full supply of raw materials or other input products as agreed upon with the customer in terms of the agreed quantity, quality, technical standards and price.
- Receive fee or toll paid by and other reasonable payments made by the customer.
- In the case of rendering of toll manufacturing services for a foreign organization or individual, the toll manufacturer may export, for the local market, the toll-manufactured product, machinery or equipment which has been leased or rent, residual raw materials, components, inputs or waste products or scraps according to authorization by the customer.
- In the case of rendering of toll manufacturing services for a foreign organization or individual, the toll manufacturer shall be eligible for exemption from the import duty on machinery, equipment, raw materials, input products which are temporarily imported at the permitted level, for the purpose of implementing the contract in accordance with laws on tax.
- Assume responsibility for ensuring legality for toll manufacturing of the contractual commodity if it appears in the negative list of commodities prohibited for business, export and import purposes.
- Store raw materials and other input products provided by the customer.
- Notify the customer of any low-quality raw material or input product and require them to replace it; refuse to render toll manufacturing services if they are or have to be aware that use of any raw material or input product may create finished products causing harm to society.
- Deliver the contractual product to the customer of which the quantity, quality, and method, duration and location of delivery, have been agreed upon in the contract.
- Ensure that information about the toll manufacturing process and finished product are kept confidential.
- Bear responsibility for the finished product, except if the product has low quality by virtue of raw materials or other input products provided by the customer or improper instructions given by the customer.
- Return the residual amount of raw materials or other input products to the customer after the completion of the contract.
- Request the customer to deliver raw materials and other input products of which the quantity, quality, and duration and location of delivery, have been agreed upon in the contract.
- Refuse any unreasonable instruction of the customer during the process of implementing the contract, if realizing that such instruction may give rise to any reduction in the product quality, with prompt notice sent to the customer.
- Request the customer to pay a full amount of fee or toll within the predetermined payment duration and according to the agreed payment method.

Toll manufacturing remuneration
- Payment can be made in cash or in kind by giving the toll manufactured product, machinery or equipment intended for toll manufacturing activities.
If remuneration is paid in kind by giving the toll manufactured product, machinery or equipment intended for toll manufacturing activities, regulations concerning import thereof must be observed.

- Payment shall be made in cash only.
Where there is no agreement on the rate of remuneration, the average rate of pay for manufacturing of the product of the same kind determined at the toll manufacturing time and location shall be used.
The customer shall not be allowed to reduce remuneration if Bear responsibility for the finished product, except if the product has low quality by virtue of raw materials or other input products or improper instructions provided by the customer.

Risk assumption responsibility
No specific regulations on this shall be applied.
Until the finished product is delivered to the customer, any party who is the owner of raw materials or other input products shall bear risks to them or the finished product made thereof, unless otherwise agreed. 
In the case of the customer’s delay in receiving the finished product, they shall bear risks during the delay period, irrespective of the fact that the finished product is made from raw materials or other input products of the toll manufacturer, unless otherwise agreed.
If the toll manufacturer’s late delivery of the finished product poses risks to the finished product, they are obliged to compensate the customer for any potential loss or damage.

Reading in Vietnamese:  Hợp đồng gia công

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