Contracts for apparel start-ups – what do you need?

Being an apparel start-up means you likely need to wear many hats – designer, production manager, general manager and more. As you move through the process and connect with more providers, it is key to have contracts and agreements in place.

What is a contract?

A contract is an agreement between two or more parties that creates mutual obligations. It is a definition of a relationship and sets expectations.

Why are contracts important?

• They protect when things do not go as planned.

• It is something in writing that can be referred to.

• They provide a mechanism to help solve any disputes.

• Allows for planning should things go wrong

• Can avoid costly litigations

• Types of contracts

Agreements and contracts should be made with co-founders, contractors (product development, photographers, designers etc), employees, manufacturers, and sales representatives.

In some US States, they require agreements in certain instances so it’s always best to know your local regulatory requirements.

Email exchanges can also be considered as an agreement if certain conditions are met. However, they are usually not as reliable as an actual contract.

Example Contractor Agreements should include:

• Compensation – fee, cadence, scope of work

• Ownership of IP – Work for Hire

• Confidentiality

Example Manufacturing agreement should include:

• Quality Control and expectations

• Payments

• Delivery dates

Example Sales Representative Contracts should include:

• Terms

• Obligations

• Exclusivity

• Territory

• Products covered

• Commissions

• Showroom/ trade show fees

Do I need a lawyer?

Generally, when working with a business lawyer, it is best to use one with experience in the apparel industry. This the assures you that they understand industry terminology, and process.

Some law firms have departments focused on fashion law, however, there are also some specialized fashion law firms.

When speaking with possible legal providers, we suggest to always be prepared with important questions. This preparation then lets the provider know you are serious and they are more likely to put forward a contract for your review.

If you are provided a contract by a contractor, it may be helpful to work with an attorney to review the details.

For guidance on getting your apparel business off the ground, please reach out via our contact form for a complimentary introductory call.