CNC Subcontracting Contracts: NDA, Quality Agreement and Framework Agreement Contents

In an international subcontracting relationship, the contract is not proof that the parties distrust each other, but that they understand the same thing. This article deepens step 4 of our first order guide; it is not legal advice, and you should finalise your documents with your lawyer.

Three Layers of Documents

In small and medium-sized relationships, an NDA + quality agreement + a well-written order is often sufficient; the framework agreement is added when annual volumes and call-off orders begin.

1. Non-Disclosure Agreement (NDA)

It may be unilateral (only the buyer's information is protected) or mutual; since the supplier will also share process information, a mutual NDA is common and reasonable. It should include:

• Definition of confidential information: Technical drawings, 3D models, specifications, quantity and price information, customer identity; including verbal information.
• Limitation of purpose: Only for quoting and producing orders; sharing with third parties only with sub-suppliers (coating, heat treatment) and under the same confidentiality terms.
• Exceptions: Publicly available information, independently developed information, legal obligation.
• Duration: Contract term + 3–5 years of confidentiality; indefinite may be requested for know-how.
• Return/destruction: Deletion of drawings at the end of the relationship and written confirmation.
• Prohibition on producing parts: The supplier must not produce parts for third parties according to the buyer's drawings and must not use the drawings as references (for intellectual property, see our file sharing article).
• Penalty clause: Common in the EU (fixed amount); also valid under Turkish law, but a court may reduce it if it finds it excessive. Prefer a reasonable amount.
• Law and jurisdiction: Discussed separately below.

Practical: If the supplier has its own NDA template, reviewing it saves time; otherwise use the buyer's template. Electronic signatures (DocuSign etc.) are accepted for commercial contracts in Turkey; the parties are also bound by a scanned signed PDF.

2. Quality Agreement (QAA / QSV)

The quality agreement puts the definition of an "acceptable part" and the problem-handling processes in writing. In German industry it is standard as the Qualitätssicherungsvereinbarung (QSV); it should include:

1. Applicable documents and order of precedence: Technical drawing (revision), specifications, standards (ISO 2768, ISO 1302 etc.), the buyer's supplier manual; which applies in case of conflict.
2. The supplier's quality system: ISO 9001 (copy of certificate attached), right of audit (once a year, with prior notice), sub-supplier control.
3. Initial sample and series approval: FAI scope (full measurement, material certificate), PPAP/PPF level if required, no start of series production without approval. Our FAI guide explains the contents.
4. Series inspection: Control plan, sampling (ISO 2859-1 AQL or 100% for critical characteristics), inspection report format and frequency, Cpk target if SPC is required.
5. Documents: Inspection report, EN 10204 3.1 and process certificates with every batch; electronic transmission before delivery.
6. Traceability and record retention: Batch → heat number; retention period (typically 10 years, 15 for automotive safety parts).
7. Change management: Written prior notification and buyer approval for changes of material supplier, sub-supplier, machine, process or production site; new FAI if required. The buyer's obligation to notify drawing revisions in writing.
8. Non-conformity and complaints: Notification period (10–30 days for detection at incoming inspection; after detection for hidden defects), the supplier's response times (24 hours first response, 10 working days 8D), remedy options (re-production, repair, credit note, on-site sorting), return of defective parts and its cost.
9. Deviation approval: The supplier's right to submit a written deviation request for out-of-tolerance parts and the buyer's approval process.
10. Quality costs: Which costs (sorting, rework, downtime) can be charged to the supplier; a reasonable limit.
11. Packaging, labelling, cleanliness: Reference to the specification. Our packaging article includes a template.
12. Supplier evaluation: OTD, PPM, communication score; annual review.

3. Framework Supply Agreement and Order Terms

The commercial layer; it refers to the quality agreement and the NDA. It should include:

• Scope and term: Part list (annex), term (1–3 years), extension and termination (3–6 months' notice).
• Price and updates: Quantity-tiered price list, currency (EUR), validity, raw material and energy indexation rule (e.g. when aluminium LME moves by more than ±10%), exchange-rate band (if not EUR). If an annual productivity discount is expected, it must be stated explicitly.
• Quantity and forecast: Is the annual forecast binding? Common structure: 3-month binding call-off, 12-month forecast; if volumes fall below forecast, the supplier's raw material and semi-finished stock is compensated.
• Order and confirmation: PO submission, confirmation within 2 working days, status of unconfirmed orders.
• Delivery: Incoterm (FCA/DAP), lead time, delay notification, cap on any delay penalty (typically 0.5% per week, 5% in total), force majeure. Details are in our Incoterms guide.
• Payment: Terms, advance, default interest, set-off rights. Our payment terms article compares the options.
• Title and risk: Transfer of risk according to the Incoterm; retention of title for unpaid goods; ownership, marking and return of buyer-owned tooling, fixtures, gauges and raw material.
• Warranty and liability: Warranty period (12–24 months), liability cap (e.g. annual order value), exclusion of indirect damages; product liability and insurance (the supplier's product liability insurance limit).
• Intellectual property: Drawings belong to the buyer; the supplier's process improvements belong to the supplier; rules for joint developments.
• Compliance: Code of conduct, environment and occupational safety, sanctions and export control (for dual-use goods), RoHS/REACH declarations.
• Termination and exit: Delivery of final orders, return of buyer-owned equipment, compensation for stock and semi-finished goods, destruction of drawings.

Choice of Law, Language and Enforceability

• Governing law: The buyer's country (German, Swiss, English law) or a neutral law (Swiss law) is common; Turkish suppliers generally accept this. Turkey is a party to the CISG (Vienna Sales Convention); unless excluded, it applies to international sales, so decide consciously.
• Dispute resolution: Enforcement of a buyer-country court judgment in Turkey is possible but takes time; in small and medium relationships, arbitration (ISTAC, ICC, SCAI/Swiss Rules, DIS) with a prior negotiation–mediation step is practical. As Turkey is a party to the New York Convention, arbitral awards are enforced.
• Language: English alone is sufficient; in a bilingual contract, the prevailing language must be stated. Commercial contracts in a foreign language are valid under Turkish law.
• Signature: Company name, authorised signatory (verifiable from the trade registry), company stamp (common in Turkey, not mandatory). Electronic signatures are accepted.
• The reality of enforceability: The best contract is the one that is never needed; what really protects the relationship is sample approval, payment tied to documents and graduated trust. The contract supports these, it does not replace them.

Care When Using Templates

• The 60-page supplier agreements of large OEMs are disproportionate for small subcontract shops; even if the supplier signs, unenforceable clauses damage trust. Use documents appropriate to the scale.
• Clauses such as unlimited liability, a unilateral right to price reductions or disclaimer of responsibility for purchases below forecast are (rightly) negotiated by Turkish suppliers.
• The technical requirements in the quality agreement must not conflict with the drawing; the order-of-precedence clause exists for this.
• If the supplier's general terms of sale and the buyer's general purchasing terms collide ("battle of the forms"), the signed document must clarify which prevails.

Frequently Asked Questions

Do Turkish suppliers accept foreign law and arbitration?

Export-oriented shops generally do; Swiss law and ICC/ISTAC arbitration are neutral and acceptable options.

Does requesting an NDA at the RFQ stage bother the supplier?

No; professional suppliers expect it and most have a ready template. Tornelle signs a mutual NDA before the RFQ.

Can we work without a quality agreement?

For small prototype orders, yes; in series supply, written rules for complaints, changes and documents protect both sides.

Who drafts the contract?

Usually the buyer; the supplier reviews it and proposes reasonable changes. Have the final text approved by your lawyer; this article is not legal advice.

Conclusion

The NDA, the quality agreement and commercial terms appropriate to the scale are the three document layers of an overseas subcontracting relationship; the real assurance is the practical discipline these documents support: sample approval, payment tied to documents, change notification and a transparent complaint process. Tornelle works with mutual NDAs, customer quality agreements and English-language framework agreements; we can share our own templates or review your documents. As a first step, send your technical drawings via our quote form; we sign the NDA before the drawings.