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  • Contract For Formulation Services

    Posted by mikethair on November 25, 2021 at 11:59 pm
    We have been providing Private Label formulation services for some years. We present an invoice, and after full payment, we proceed with the formulation service based on the customer brief.
    This does not include the full production of the finished formulation, we have a separate contract for manufacturing.
    And included is up to three tweaks of the formulations presented, plus samples of the formulations for customer evaluation.
    Recently, after providing the customer with three variations for their evaluation and trialling with customers, they requested a refund, even though all the work had been done.
    MY QUESTION: has anyone developed a contract, or set of Terms & Conditions for contact formulation services?
    mikethair replied 1 year, 2 months ago 3 Members · 3 Replies
  • 3 Replies
  • Microformulation

    Member
    November 26, 2021 at 5:29 pm
    We use a Work-For-Hire contract which was prepared by an Attorney and outlines these issues. We include the approved IP (Formula) as part of our fee. We do not manufacture.
    Having these contracts outlines what they are and are NOT paying for. Also, I speak with many colleagues. You need to vet the clients.
    We have had these issues with some emerging lines and the contract will properly assign risk. Our weirdest request for a refund was “we never had the funds to get the Formula manufactured. Please send a refund.”
  • DesertInBloomCosmeticsLab

    Member
    November 26, 2021 at 5:54 pm

    @mikethair:

    You should include in your contract that once your work has commenced that you do not provide refunds unless the client can prove that you were negligent in developing the product.  State this explicitly in your contract.

    That won’t necessarily stop anyone for asking for a refund, but you then have a contractual basis for not providing the refund.

  • mikethair

    Member
    November 26, 2021 at 9:46 pm

    Thanks. Good advice.

  • mikethair

    Member
    November 27, 2021 at 6:17 am
    Thanks   @MarkBroussard    and  @Microformulation