Confidentiality and Non-Disclosure
This is the provision most commonly left out and most commonly needed.
Your factory knows who you are, what you make, and who you sell to. In many cases they know your retail customers, your pricing structure, and your product development roadmap. That information has competitive value — and without a confidentiality provision in your purchase order terms, there is no contractual basis for preventing them from sharing it.
The confidentiality provision should prohibit the factory from disclosing your identity as a customer, your product specifications, your retail customers, and your pricing to any third party without your written consent. It should survive the end of the commercial relationship — meaning the obligation continues even after you stop placing orders.
No Publicity Without Consent
The factory cannot publish, announce, or otherwise communicate that you are their customer without your written permission. This means no press releases, no case studies, no "our customers include" language on their website or marketing materials, no display of your products in their showroom, and no exhibition of your products at trade shows.
The last two deserve particular attention. Factory showrooms are visited by competitors, trading companies, and other buyers — many of whom are looking for product ideas or supplier intelligence. A factory that displays your products in their showroom without your permission is exposing your product development to competitive intelligence gathering you never authorized.
Trade shows are worse. A factory that exhibits your product at the Canton Fair or any industry trade show is broadcasting your product to the entire market before you've had the opportunity to launch it through your own retail channels. The damage to exclusivity, first-mover advantage, and retailer relationships can be significant.
The provision should be explicit: no display, exhibition, publication, or reference to your products or your business relationship without prior written consent.
Subcontracting Restrictions
Your purchase order is with a specific factory. The product should be produced at that factory — not subcontracted to another facility without your knowledge and approval.
Unauthorized subcontracting is more common than most importers realize. A factory that is at capacity, undergoing maintenance, or facing a production issue may shift your order to a partner facility without telling you. The product that arrives may have been produced somewhere you've never audited, by workers under conditions you've never assessed, with quality control that doesn't match what you negotiated.
The subcontracting restriction should require written approval before any portion of your order is produced at a facility other than the one named in the purchase order. Violation should be treated as a material breach.
Intellectual Property
If your product involves proprietary design, artwork, formulations, or specifications, the purchase order terms should establish clearly that all intellectual property remains yours — including any improvements, modifications, or derivative works developed in the course of production.
This matters particularly for products where the factory's engineering team contributes to refinements during the development process. Without explicit IP terms, there can be ambiguity about who owns changes made to your original design.
Inspection Rights
Your right to inspect the product before shipment should be stated explicitly. So should your right to reject product that fails inspection, and the factory's obligation to remedy defects within a defined timeframe before shipment.
Governing Law and Dispute Resolution
Define which law governs the agreement and how disputes are resolved. For most international purchase orders, this means specifying either a neutral jurisdiction or the buyer's home jurisdiction, and defining arbitration as the dispute resolution mechanism rather than litigation.
Chinese courts have jurisdiction over disputes involving Chinese factories if no other jurisdiction is specified. For most importers, that's not the outcome they want.
Making It Standard
These terms don't need to be negotiated individually for every order. Build them into your standard purchase order template and present them as your normal terms of business. Factories that work with professional international buyers regularly will recognize them as standard practice.
A factory that pushes back significantly on confidentiality, publicity restrictions, or subcontracting controls is giving you information about how they operate. That information is worth having before you place your first order rather than after.
Have you had a factory publish your relationship or display your products without permission — and how did you handle it? We'd like to hear what the experience revealed about how these situations play out.