Scenario: Customer approaches Manufacturer and requests product readily available in the market to be manufactured. He does not have drawings etc, but provides a rough sample. There appears to be a lucrative market for this item which is available in various material composition and configurations.
Manufacturer makes prototype which is further developed and approved by Customer. Looks different from sample and has further advancements. Manufacturer makes tooling and incurs cost of materials, labour etc.
Customer buys 20 or 30 products and does not place return orders, although he has promised huge orders. No written agreement. There is nothing wrong with the product. There is market demand etc. The customer is just not selling as he has other product to sell.
Manufacturer contacts customer who still has not paid for tooling and development. Customer agrees to Manufacturer selling remaining products to defray costs.
What is Manufacturer’s position with regards to the product? Can he legally sell it to recover his expenses? May he now manufacture this product for his own account?