A tooling agreement is the difference between "I paid for the mold" and "the mold is mine, and I can prove it and take it." But it's only as strong as what's written in it. This is the checklist to put in front of your lawyer — the specific clauses that keep your tooling yours when the relationship is good, and get it back to you when it isn't. Your lawyer will draft and tailor it; your job is to make sure none of these go missing.

Rule Zero: Sign It Before Any Money Moves

Every clause below is worthless if the agreement isn't signed before you pay a deposit — on the tooling or on the order. The moment the deposit lands and the mold is cut, your leverage evaporates: the factory has your money and your tooling, and you're negotiating from behind. The agreement is a pre-condition of the first payment, not a formality you get to later.

Ownership: Make It Unmistakably Yours

  • Explicit title. The agreement states in plain terms that you own the tooling outright, that payment vests full title in you, and that the factory holds it only as a custodian.
  • "Property of [Your Company]" physically marked — engraved or permanently stamped onto every tool. A label peels off; an engraving is evidence.
  • An itemized tooling schedule. An appendix listing each mold and tool with a unique ID, description, number of cavities, and photographs — so there is never a question about which tooling is yours.
  • The factory may never claim it as its own asset. Expressly not the factory's property, not carried on its books, and not pledged, sold, or transferred to anyone.
  • No lien, no right of retention. The factory waives any right to hold your tooling as collateral or leverage in a payment dispute — including disputes over unrelated orders. Your mold cannot be a hostage for someone else's invoice.
  • You hold the drawings. You receive the tool's design files and CAD, so you can identify, maintain, or reproduce it elsewhere without the factory's cooperation.

Possession: Get It Back on Demand

  • Collect on demand. The factory must release the tooling to you or your agent within a fixed window — for example, 72 hours of written notice, during regular business hours. A vague "cooperate in good faith" is not a deadline.
  • Notice before it moves. The factory must notify you — and get your consent — before the tooling leaves its facility for any reason. Tooling routinely moves to be serviced or to a subcontractor; you should always know exactly where yours is.
  • Subcontractors are bound too. If the tooling goes to a subcontractor, that party is bound by the same terms, in writing, before it arrives.
  • Right to inspect. You can inspect the tooling on reasonable notice — to confirm it exists, is in good condition, and isn't being run for anyone else.

Protection: Insurance, Maintenance, and No Unauthorized Use

  • Insurance that names the tooling. The factory must carry coverage that specifically insures your tooling against fire, theft, and damage, with proof of coverage provided on request. "The factory is generally insured" is not the same thing.
  • Maintenance and tool life, defined. Who maintains the tooling, to what standard, and at whose cost — plus the expected tool life (in shots or cycles). Fixing this up front is what stops the surprise "tooling maintenance fee" from appearing at a reorder.
  • No unauthorized production. The factory cannot use your tooling to make product for anyone else, cannot run extra "ghost shift" units for the gray market, and cannot copy or duplicate the tooling.
  • Condition on return. The tooling is returned in good working order, documented by a condition report at handover, with responsibility for repairing any damage assigned in advance.

Making It Enforceable Where the Factory Is

This is the part importers skip and lawyers earn their fee on. A contract you can't enforce in the country where the tooling physically sits is decoration.

  • Bilingual, with a controlling language. The agreement should exist in both English and the factory's language, with one version clearly designated as controlling. A local court will read the local-language version.
  • Governing law and dispute resolution that will actually be honored where the tooling sits — often the factory's own jurisdiction and an arbitration body there — rather than a foreign court that has no reach over the factory or your mold.
  • Signed with the company seal. Executed with the factory's official company chop by an authorized representative — an individual's signature alone may not bind the company.
  • Survival on bankruptcy or sale. If the factory goes under or changes hands, the tooling remains yours, is not part of the bankruptcy estate, must be released to you, and any successor is bound by the agreement.
  • Teeth. A defined penalty or liquidated-damages clause for failing to release the tooling or for unauthorized use, so non-compliance has a real, pre-agreed cost.

The Bottom Line: Bring This to Your Lawyer

Ownership stated and engraved, itemized and lien-free; possession on 72 hours' notice; movement disclosed; insured against fire, theft, and damage; no unauthorized use; and enforceable in the country where the tooling actually lives — all signed before a single dollar changes hands. A tooling agreement that does those things turns your mold from the factory's leverage into your asset. Hand this list to counsel who knows the jurisdiction, and make sure nothing on it is missing before you fund the first payment.

Use this with qualified counsel, not instead of it. This is a checklist to discuss with a lawyer, not legal advice or a template. A tooling agreement has to be drafted for your specific situation and made enforceable where your tooling sits — work with a lawyer experienced in that country before you sign or pay.

This article is general guidance, not legal advice. Contract terms and their enforceability vary by jurisdiction — confirm everything here with qualified legal counsel for the country where your tooling is located.

Does your current tooling agreement cover all of this — ownership engraved, no liens, recovery on demand, insurance, and enforceable in the factory's country — and was it signed before your deposit? We'd like to hear which clause has saved you, or which one you wish you'd had.