Meaning
Legal agreements governing the transfer of physical possession without transfer of ownership secure the handling of valuable manufacturing assets during production. In injection molding, a bailment contract defines the terms under which an OEM delivers high value tooling to a contract manufacturer for part production. The molding company holds the mold as a bailee and must return it in good condition when the contract expires.
This document allocates liability for damage and limits the use of the mold exclusively to the owner’s projects.
Asset Protection
Tooling represents a major capital investment that must be protected against misuse and unauthorized wear. The contract manufacturer is legally bound to perform regular maintenance and store the mold in a secure environment. Any unauthorized modification to the gating or ejection system violates the agreement and exposes the processor to damages.
Liability Allocator
Risk management becomes critical when expensive hot runner systems or complex hydraulic slides fail during a production run. Under typical terms, the processor is responsible for damage caused by negligence but not for ordinary wear and tear. Insurance requirements are detailed to cover catastrophic events or factory fires.
Return Policy
At the end of the production cycle, the tooling must be returned to the owner or transferred to another molding facility. The bailee must prepare the mold for transport by applying protective grease and packing it securely. This transfer concludes the legal relationship.
