Where two or more parties want to collaborate for a project or venture, a Collaboration Agreement will come in handy.
It’s always a great idea to combine different ideas and areas of expertise, but it can get tricky when different resources, tools and IP are involved. So, it’s important that there is some agreement as to how this will all work. For example, think about the following:
- Who will own the IP?
- Who can use the IP?
- Which party is responsible for what tasks?
- What resources will we need?
- How will payment work?
These are all matters that should be clearly set out in a Collaboration Agreement.
When Would I Need A Collaboration Agreement?
There are lots of situations where you might need a Collaboration Agreement. The following list is not exhaustive, but includes some cases where you may want to speak to a lawyer about drafting up an Agreement for your project:
- Businesses collaborating with another business
- Content creators
What Is Included?
Each Agreement will be different as it should be tailored to your business’ (and your partner’s) needs. However, generally speaking, a Collaboration Agreement should cover the following matters to ensure a smooth joint venture.
Like any other Agreement, a Collaboration Agreement should clearly outline what each party’s roles and responsibilities are. This will ensure that the project goes smoothly and according to plan by having everything clear from the outset.
When a project is finished, it’s important to figure out how profits from the final result will be distributed. This should be decided based on how much each party invested or contributed to the project.
During a venture, a lot of inside or private information is discussed and shared between parties. This confidential information is often crucial to a business’ success and overall performance, so you need to take measures to ensure this is not shared with anyone outside of your business or project.
The best way to do this is to insert a Confidentiality Clause in your Agreement. This will set some boundaries and rules around how parties can handle this information.
A joint venture is likely to involve a lot of IP, whether that be assets used in the process or the result of the project itself. So, you want to make sure all parties are clear on who owns that IP and how it can be used once the project is complete.
For example, if you’re working on a project where a third party is creating a program for you, you may want to have an IP Assignment Deed in place, which ensures that the program created belongs to your business. You will have ownership rights even though it was made by another party (this is what they would agree to in the contract).
Joint ventures also carry several risks. As such, a Collaboration Agreement will cover key risks and set out who will be liable for anything that goes wrong.
Ideally, you’d want to protect yourself as much as possible when it comes to these risks. It’s good business practice to speak to a lawyer about how you can place yourself in the best negotiating position when it comes to these Agreements, so if something goes wrong, you know you’re protected.
Like any other agreement, a Collaboration Agreement should set out the rules around termination. So, what is the process if one party or both parties would like to end the contract or arrangement?
It’s important to cover details around termination because of complex situations, such as where termination of the arrangement is one-sided.
In these cases, parties should rely on what is set out in writing. So, having a good termination clause will save you a headache later.
Jenny is a social media influencer who recently released a line of journals which she would like to sell online. She has been chatting with an artist, Alice, who has a strong online presence. She wants to collaborate with Alice and feature some of her commissioned artworks in her journals, to which Alice happily agrees.
Since they are two businesses working on a joint venture (or project), Jenny decides to speak to a lawyer to get a Collaboration Agreement drafted. This Agreement will cover:
– How many artworks Alice will complete for the project
– How profits for the journals will be distributed between Jenny and Alice (for example, 50/50)
– IP ownership (Alice will still own her artworks, and will allow Jenny to use it in her journals under an IP licence)
– Confidentiality (anything used and discussed as part of the project should remain confidential by way of a Non-Disclosure Clause)
– Procedures to be followed in case a disagreement arises (dispute resolution)
It’s always an exciting step to start projects and innovate with different parties, but it also carries a number of risks and other considerations. You have to think about IP ownership, liability and the scope of your responsibilities.
This will ensure that your projects run smoothly and with minimal complications.
If you need help, Sprintlaw has a team of expert lawyers who can help you draft a Collaboration Agreement tailored to your needs and your specific arrangement.
You can reach out to us for a free, no-obligations chat at firstname.lastname@example.org or 1800 730 617.
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