Miller Johnson has always represented a diverse array of manufacturing clients and we have found the eight issues listed here to be common sources of legal problems for manufacturers. The strategies suggested for dealing with them are those we have found most effective.
A manufacturer’s success is measured by its ability to bring its products to market. Each manufacturer ultimately must design a sales or distribution system that maximizes the sales penetration for each product. To further its market presence, a manufacturer often forms contractual relationships with independent sales representatives and distributors that involve critical legal issues like antitrust compliance. Moreover, manufacturers must take care not to discriminate between purchasers on the basis of the price of their products. These issues should be addressed in a written distribution agreement or sales representation agreement that our attorneys can review or draft.
Terms and Conditions for Sales and Purchases of Goods
Most manufacturers use “boilerplate” invoices, acknowledgments, proposals and purchase orders to sell their products to end users and purchase supplies from vendors. Usually, no one has reviewed these documents to make sure they minimize the manufacturer’s exposure to different types of legal liabilities or put the manufacturer in the most favorable position for a “battle of the forms” with another purchaser or seller of products.
Using protective provisions in form documents is especially important for manufacturers who produce goods designed as solutions for a particular customer. For example, a manufacturer can be found liable for the cost of a replacement system if its manufactured system does not perform according to contract specifications and the cost of the replacement system may be substantially more than the contract price of the original system. Damages may also include consequential and incidental damages such as lost profits. The right protective language in the key documents can often limit liability, prevent consequential damages, and protect against numerous claims otherwise recoverable under the Uniform Commercial Code.
We can review your standard documents and suggest changes that will tailor them to the details of each transaction.
Purchasing Manufacturing Equipment and Systems
As manufacturing becomes increasingly sophisticated, tooling, production equipment, and manufacturing systems become more and more complex and expensive. A manufacturer cannot afford to let its supplier’s financial difficulties interfere with its scheduled delivery of such equipment or be held hostage to pay for the equipment twice. Worse yet, a manufacturer cannot afford to have its production schedule interfered with or shut down in such a situation. We can help you structure and secure the purchase of equipment with appropriately drafted purchase agreements, security interests, and subordination agreements that will lessen the risk posed by supplying problems.
Environmental issues are especially relevant for manufacturers. Miller Johnson’s Environmental and Energy Practice Group works with manufacturing clients to minimize their exposure to liabilities under federal and state environmental laws.
- Where a manufacturer is seeking to acquire either land for expansion purposes or an existing business, our environmental attorneys can help evaluate potential environmental liabilities and take steps to avoid or minimize them.
- We can help manufacturing companies who are facing potential environmental liability for contamination that exists on their site, or which they may have caused at another site, by evaluating available defenses and exemptions to liability, as well as working with environmental consultants to achieve the least expensive remedy.
- We can work with manufacturing companies to establish an internal environmental compliance program that not only helps minimize potential future environmental liability but also results in cost savings through waste minimization and increased worker safety.
Trademarks and Trade Secrets
Trademarks and service marks are extremely valuable assets that should be protected. Miller Johnson has the experience to prosecute trademark and service mark applications at both the state and federal levels. Also, every manufacturer has valuable proprietary information that may not be protectable under the patent laws even though it’s crucial to the manufacturer’s business. We can help you prepare the confidentiality and non-disclosure agreements with employees and outsiders that are necessary to protect this information.
Foreign Sales Corporations
Any company that exports product or has any plans to do so should evaluate setting up a foreign sales corporation. We can analyze the possible tax savings – which may be significant – and help you structure the corporation.
Manufacturing is intensely competitive. Uncontrolled growth, a misstep on an important bid, the loss of a significant order – each can place a manufacturer in a financial minefield, where turning in the wrong direction can be extremely dangerous. Miller Johnson’s experienced workout group can guide a manufacturer safely through such difficulties.
Workout success generally requires a variety of legal actions, including:
- Negotiating with lenders, suppliers and customers.
- Analyzing the tax impact of various workout strategies.
- Insulating owners and managers from personal liability.
- Dealing with critical labor issues, and developing the strategies that can return the manufacturer to a competitive position without destroying the relationships critical to your company’s success.
The workout group at Miller Johnson can provide the counseling necessary to help your company overcome the challenges of our fast -paced economy.
OSH Act/MIOSHA Compliance
Manufacturers are especially susceptible to potential OSH Act and MIOSHA claims. Miller Johnson can work with you to establish a compliance program that minimizes exposure to these claims.