This Product Development Agreement is made between a client and a product
developer to develop the client's product. This document sets forth the material terms
and conditions of the agreement including the product specifications, non-disclosure
provisions, the project phases, and compensation details. It contains numerous
standard provisions that are commonly included in these types of agreements and may
be customized to address the specific needs of the parties. This document should be
used by product developers and their clients when retaining their services.
PRODUCT DEVELOPMENT AGREEMENT
This Product Development Agreement (the “Agreement”) is made on the _____ day of
___________20__ (the “Effective Date”) by and between _________________________
(“Client”) and ___________________________, (“Developer”).
RECITALS:
A. Client is engaged in the business of _________________________________;
B. Upon and subject to the terms and conditions of this Agreement, Client has retained
Developer’s services to provide development services for the development of
___________________ (“Products”) according to the Product Specifications specified in Exhibit
A of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
1. PRECEDENCE
1.1. This Agreement is intended by Client and Developer to operate as a basic set of
operating conditions regarding their business relationship. Product specific requirements along
with specific business terms and conditions will be mutually agreed to and documented by
Exhibit A to this Agreement.
1.2. Parties have executed a Mutual Non Disclosure Agreement (“MNDA”) between
them dated ______________.
1.3. This Agreement may be executed in one or more counterparts, each of which will be
deemed the original, but all of which will constitute but one and the same document. The parties
agree that this Agreement and its addenda may not be modified except in writing and signed by
both parties.
2. ENGAGEMENT
2.1 Client hereby has engaged Developer for designing and prototyping the Product for
mass production in accordance to the Product Specifications and Project Phases set forth in
Exhibits A and B respectively of this Agreement.
3. DESIGN REVIEW AND SPECIFICATION CHANGES
3.1. Design Review. The parties agree to conduct regular program reviews as specified
on the agreed Project Phases set forth on Exhibit B to this Agreement, to ensure their mutual
satisfaction with the performance under the Agreement. Upon reasonable notice, the parties
agree to meet at a mutually agreeable time and location to review and discuss the status of the
development of the Product. The parties further agree to promptly meet at the request of either
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party with respect to any material issues a party may have with the performance of the other
party of its obligations under this Agreement.
3.2. Changes to the Specification. Each party may request modifications in writing to
the other party in the form of changes or additions to the Specifications at any time during the
term of this Agreement. Such requests shall not be deemed or considered binding unless
accepted by the other party in writing. If any such modification of the Project Specifications is
agreed, the parties will negotiate an equitable adjustment to the Agreement, including the
apportionment of any additional development, testing or tooling costs. Upon mutual agreement
to any change to the Project Specifications, both parties will proceed with the implementation of
the prescribed changes, and the Project Specifications and other Exhibits to the Agreement shall
be modified accordingly to reflect such agreed upon changes. Notwithstanding the foregoing, if
the Client requested changes to the Project Specifications involve any change to the work
performed by third parties contracted with Developer, Developer shall use reasonable efforts to
effect such specification change provided that the same does not increase the cost of any
functional component or adversely and materially affect the Project Phases or function of the
specific component. In such event Client shall be responsible for the payment of all
nonrecurring expenses involved in such change (or such pro rata portion thereof, in the further
event Developer elects to incorporate the same in its version of the Product). Notwithstanding
the foregoing, Client shall not be responsible for any such nonrecurring expenses if Client
requested changes are necessary for the Product to achieve Product A