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Manufacturing disputes can derail production schedules, quality standards, and profitability in a hurry. A problem at your manufacturer does not stay at your manufacturer for long. It flows through to your customers, and your reputation. When these relationships break down, the commercial consequences can be severe.
Our commercial litigation team handles disputes arising from manufacturing relationships of all kinds. We act for brand owners who rely on third-party manufacturers, for contract manufacturers serving multiple clients, and for businesses that both manufacture and commission manufacturing from others. The issues we deal with include intellectual property concerns, quality failures, specification disagreements, capacity commitments, and termination rights.
Manufacturing disputes often require urgent action. Production cannot wait while lawyers argue about contractual interpretation. We understand the commercial reality and work to resolve matters as quickly as the circumstances allow, whether through negotiation, alternative dispute resolution, or litigation when that becomes necessary.
Quality Control and Specifications
When manufactured products fall short of agreed standards, it gets expensive quickly. Defective goods may need to be scrapped, reworked, or recalled. Your own customers may reject products or claim compensation. Your reputation suffers. And production schedules get thrown into disarray while the problem is identified and fixed.
We have handled disputes involving defective manufacturing across a range of industries. The issues vary, but certain themes recur. There are arguments over whether products actually meet the agreed specifications, or whether the specifications themselves were adequate. There are disputes about testing and inspection procedures, including who should conduct them and what standards apply. There are disagreements about rejected goods, with manufacturers claiming the rejection was unjustified and brand owners insisting the products were not fit for purpose.
Recall obligations create particular tension. When products in the market turn out to be defective or unsafe, someone has to pay for getting them back. The costs can be substantial, and disputes over who bears them can become heated. We advise on the contractual allocation of recall costs and help resolve disagreements when they arise.
Warranty claims based on quality issues often follow. Customers who have received defective products look to their supplier for compensation, and that supplier in turn looks to the manufacturer. We handle claims up and down the supply chain.
Manufacturing disputes can get technical. Understanding what went wrong often requires expert input from engineers or other specialists. We work with appropriate experts to ensure we fully understand the technical issues before advising on the legal position.
Production Capacity and Exclusivity
Manufacturing agreements often lock in commitments around production capacity. A brand owner may need assurance that sufficient capacity will be available to meet anticipated demand. A manufacturer may want guaranteed volumes to justify investment in equipment and personnel. These commitments create obligations that can become sources of dispute.
We handle cases where production commitments have not been met. A manufacturer who fails to deliver the agreed volumes leaves their client scrambling to find alternative sources. A brand owner who fails to order the minimum quantities leaves the manufacturer with unused capacity and unrecovered costs. Both situations generate claims for breach of contract.
Exclusivity arrangements add further complexity. A manufacturer may agree not to produce competing products for other clients. A brand owner may agree to source exclusively from one manufacturer. When these exclusivity provisions are breached, or when there is disagreement about their scope, litigation often follows.
Capacity allocation disputes arise when a manufacturer serves multiple clients and cannot meet everyone’s requirements. Who gets priority when production capacity is tight? The answer should be in the contract, but often is not.
Tooling and Equipment
Manufacturing frequently requires specialised tooling, moulds, dyes, jigs, and equipment. These items can be expensive to design and produce, and they are often specific to particular products. Questions about ownership, responsibility, and what happens at the end of the relationship cause friction regularly.
Who owns the tooling? The answer depends on the contract, but disputes arise when the position is unclear. A brand owner who paid for tooling may assume they own it outright. A manufacturer who created it may claim ownership or a right to retain it until all invoices are paid.
Who pays for maintenance, repair, and eventual replacement? Tooling wears out over time, and the costs of keeping it serviceable can be significant. Contracts that fail to address these questions clearly store up problems for later.
What happens to tooling when the relationship ends? Can the brand owner collect it and take it to another manufacturer? Must the manufacturer hand it over? These questions need resolving before the relationship terminates, and we help clients navigate them.
Pricing and Cost Variations
Manufacturing costs shift around, sometimes dramatically. Raw material prices fluctuate. Energy costs rise and fall. Currency movements affect the economics of international arrangements. These changes put pressure on pricing arrangements that may have been agreed years earlier.
Disputes arise over price adjustment mechanisms. Some contracts include formulas that automatically adjust prices in response to specified cost changes. Arguments develop over whether the mechanism has been correctly applied, whether particular cost increases fall within its scope, and whether the resulting price is what the parties actually intended.
Where contracts lack adjustment mechanisms, manufacturers seek price increases that brand owners resist. We advise on whether proposed increases are contractually permitted and help negotiate outcomes that both parties can live with. Where agreement cannot be reached, we pursue or defend claims through litigation.
Volume discount calculations generate their own disputes. Thresholds may not have been met, or the parties may disagree about how volumes should be counted. We analyse the contractual provisions and the evidence of what has actually been ordered and delivered.
Delivery Schedules and Lead Times
Production delays create problems for everyone down the chain. A manufacturer who delivers late leaves their client unable to meet commitments to customers. Scheduling conflicts arise when multiple clients need production at the same time.
We assist with disputes over missed delivery dates, including claims for the losses caused by late delivery and arguments about whether the delay was excusable. We advise on force majeure provisions and whether particular events fall within their scope.
Product Liability and Recalls
When products cause harm or fail to meet safety standards, difficult questions arise about who bears responsibility. The brand owner whose name is on the product faces claims from injured consumers. But the manufacturer who actually made the defective item may be the party truly at fault.
We advise on indemnity provisions that allocate liability between manufacturers and brand owners. We help clients understand their insurance position and whether their cover responds to particular claims. We handle disputes over who pays for recalls and the associated costs of investigation, notification, collection, and disposal.
Our Approach
We have worked on both domestic and international manufacturing arrangements across a range of sectors. Our approach focuses on practical solutions that minimise disruption to your operations whilst protecting your legal position.
We understand that manufacturing relationships are often long-term and commercially important, and we try to resolve disputes in ways that preserve those relationships where possible. When litigation becomes necessary, we pursue your interests with determination.
Contact Tower Bridge Legal to discuss your manufacturing dispute with our commercial litigation team.
