An OEM agreement refers to a contract between two companies where one of the parties agrees to supply parts or equipment to another so that the latter can resell the equipment or use it in a new product to be sold under the second company’s brand name. OEM agreement stands for original equipment manufacturer, referring to the company which sold the equipment in the first place. This is most commonly seen in cases where a particular company XY may manufacture a product or component and then sell it to a big retail outlet AB, where AB will now sell the product under its own brand name.
OEM agreements are often created by auto companies and their equipment suppliers because most auto companies use auto parts made by different companies which are later assembled in their production unit and the final product is sold under its name. The OEM agreement thus contains the various terms and conditions necessary in such a deal.
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Sample OEM Agreement
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