The smallest order a factory will accept for a product, often per color, size or material.
MOQ is a commercial term, not a legal one. Its legal side shows up later. A factory that has to buy material by the roll or run a mold for a full shift often produces more than you ordered, and the extra units are the ones that turn up for sale under someone else’s listing.
Write down what happens to production overruns: a small tolerance on quantity, any excess delivered to you or destroyed, and no sale of products made from your designs or molds to anyone else.
Where the extra units go
A common situation: the factory agrees to a smaller trial order at a higher unit price, then runs the mold or prints the full sheet anyway. The extra units sit in its warehouse. Months later a listing appears with your product under another name, and the factory says it was selling its own stock. Without a clause on overruns, you are arguing about goods you never paid for.
MOQ also drives tooling. A factory that quotes a low mold price often recovers it through the MOQ, and may treat the mold as its own once the orders stop. Settle who owns the mold in the same document that sets the MOQ, not in a later email.
Overrun clause
A short version that factories usually accept:
“Quantity tolerance is plus or minus [3]%. Units produced beyond that tolerance shall be delivered to the Buyer at the contract price or destroyed under the Buyer’s supervision. The Supplier shall not sell, give or display to any third party any product made from the Buyer’s designs, molds or packaging.”
Pick a tolerance that matches how the product is actually made. Printed and molded goods need a little more room than assembled ones.
Related terms
Read next
- China Mold Ownership Lawyer: Tooling Agreements and Getting Molds Back
- Paying for Molds in China: What to Agree Before the Factory Cuts Steel
- NNN Agreements in China: How to Stop Your Chinese Factory from Copying or Selling Your Product
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