A purchase order and an email thread is not a contract, and it is what most first-time importers rely on. The clauses below are the ones that decide outcomes when something goes wrong.
Specification and revision control
The contract must reference the specification by revision number and the golden sample by date. Without that, "as agreed" means whatever the last conversation implied, and every claim becomes an argument about which version applied.
Payment structure
Common practice is a deposit against production, with the balance on documents or after inspection. Structure payment so that the final tranche is released after a passed pre-shipment inspection, not before it. Paying in full against a bill of lading removes your only remaining leverage.
Incoterms, chosen deliberately
FOB gives you control of freight and visibility of cost, and suits buyers with a forwarder relationship. EXW pushes all origin handling onto you, which usually costs more than it looks. CIF hands control — and margin — to the seller. Whatever you choose, state the named port and the version of the Incoterms rules.
Tooling ownership
If you paid for it, the contract must say you own it: tool numbers, drawings, storage location, condition inspection rights and a return or transfer obligation on termination. Undocumented tooling is the most common way importers lose the freedom to change factories.
Intellectual property and confidentiality
Use an agreement enforceable where the factory sits, not only in your home jurisdiction. Cover designs, drawings, moulds and brand marks; prohibit production of your design for third parties; and register trademarks in the manufacturing country as well as your sales markets — registration is territorial and often first-to-file.
Quality, inspection and remedies
Reference the quality agreement, define inspection rights including unannounced access, and set remedies: rework at supplier cost, re-inspection responsibility, rejection thresholds and a claim window after arrival. State who bears freight on rejected goods.
Capacity, lead time and force majeure
Commit lead times and a capacity allocation for your peak season. Define what counts as force majeure narrowly — broad clauses excuse ordinary supply problems — and require prompt notification with mitigation obligations.
Governing law and dispute resolution
Choose a governing law and a forum both parties can realistically use. Arbitration in a neutral, enforceable seat is generally more practical than litigating in a foreign court, and a judgment you cannot enforce is worth nothing.
The simplification TUSKO offers
Buyers working with us contract with TUSKO rather than with each factory. One agreement, one quality standard and one counterparty across Thailand, Vietnam, Indonesia and Malaysia — and when a shipment fails, the claim is ours to resolve, not yours to litigate abroad.
Frequently Asked Questions
What payment terms are normal in ASEAN manufacturing?
A deposit against production with the balance released after a passed pre-shipment inspection is common and reasonable. Full prepayment removes your leverage and should be resisted.
Which Incoterm should an importer use?
FOB at a named port suits most buyers who have or can appoint a forwarder, because it gives cost visibility and control of the main carriage. Always state the named port and the rules version.
How do I protect my design?
Register trademarks and, where relevant, designs in the manufacturing country as well as your sales markets, use an agreement enforceable locally, own the tooling in writing, and avoid disclosing the full product to unqualified suppliers.
Do I need a contract in the local language?
A bilingual contract is advisable, with a stated governing version. It reduces genuine misunderstanding and improves enforceability locally.
What if the factory misses the shipping date?
Whatever the contract provides. Meaningful terms include notification obligations, a remedy such as a discount or air-freight contribution, and a narrowly defined force majeure clause that does not excuse ordinary delays.