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A 3rd Party Manufacturing Agreement is essential when a company wishes to outsource the production of its goods to an external manufacturer while maintaining control over product specifications and quality. This document is particularly relevant in the Canadian market where companies need to ensure compliance with local manufacturing regulations, labor laws, and quality standards. The agreement typically includes detailed manufacturing specifications, quality control procedures, intellectual property protections, pricing structures, and operational requirements. It's commonly used when companies lack manufacturing capabilities, want to reduce capital investment in production facilities, or need to scale production capacity flexibly. The agreement helps protect both parties' interests while ensuring clear accountability and performance standards in the manufacturing relationship.
