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Collaboration Agreement

You should consider entering into a collaboration agreement when working with a partner on a specific project. A collaboration agreement can be used to set out the expected ways of working, define the goals of the collaboration and codify how fees or charges will be handled. Entering into a well drafted collaboration agreement at the start of the project will help avoid disputes or disagreements later in the project. The process of preparing the collaboration agreement will also give you and your partner a chance to consider how the collaboration will work in practice.

Why is a collaboration agreement important?

Clearly describing the goal of the collaboration in a collaboration agreement can be a crucial factor in ensuring the success of the relationship with your partner. The goal could be to reach a certain number of customers or it could be to create a product or service that is to be resold to your or your partner's customers. In addition, the agreement should set out who is responsible for what and what each partner is obliged to do to help achieve the goal. For example, if you expect your partner to incur costs in developing a product, this should be specified in the collaboration agreement. 

One of the most common reasons for why collaborations fail is poor communication between the parties. It can therefore be helpful in the collaboration agreement to provide that you and your partner will have regular follow-ups and/or to include a process for how information will be shared between the parties.

Common mistakes in Collaboration Agreements

  • Not defining the ultimate goal of the collaboration. If this is not clearly set out in the agreement there is a risk that the parties have different views on what is to be achieved and what constitutes success.
  • Failing to state the roles, responsibilities and obligations of the parties.  In particular, not setting out how revenues or costs associated with the collaboration are to be shared between the parties can result in problems.
  • Not including a method for terminating a project that isn't going to plan.
  • Not including protections to stop your partner hiring your employees.

Other important points to consider

  • Should your partner be prevent from working with other companies during the collaboration? Perhaps it is important that your partner does not collaborate with your competitors during the collaboration, and shortly thereafter.
  • Who will own any intellectual property developed during the project?  The standard position is that the party who creates the intellectual property will own it. It may also be necessary for one party to licence intellectual property (such as trademarks) to the other party during the collaboration.
  • How do you handle personal data, and who is responsible for what? If one of the parties is responsible for personal data, you probably need to enter into a separate Data Processing Agreement (DPA).

PocketLaw helps you build a better business

Downloading a template is easy. Knowing how a legal document creates value for your company is more difficult. That's why we created PocketLaw - to guide you in what legal you need, and to get it in place. In PocketLaw's platform, you can easily create a Collaboration Agreement and a Data Process Agreement by answering simple questions and sending directly for e-signing. In addition, you can store your agreements in our clever document management system, and also get legal guidance as well as personal advice. Everything you need to grow your business and drive it forward.

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