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What is a Collaboration Agreement?
A collaboration agreement is a legally binding agreement between two or more parties that outlines how they will work together on a commercial project, the roles and responsibilities each during the project, and how each will benefit from the collaboration.
When a business decides to work with another on a small project, they sign a project collaboration agreement to combine their resources and reach a shared objective.
A mutual goal and a clear project trajectory are essential to any collaboration agreement. Unlike a general partnership, which can span for years at a time and even form a new company, collaboration agreements are more limited with fixed timelines and measurable goals.
Here is an article with more information about collaborative partnerships.
What Should Be Included in a Collaboration Agreement?
A collaboration agreement should cover the project in question and the resources that will be used to achieve it.
When drafting your project collaboration agreement, be sure to include:
- A name and description of the project
- A collaboration schedule
- How will both parties work to achieve the end goal
- Individual responsibilities and obligations of each party
- Intellectual property rights
- A nondisclosure agreement and confidentiality clause
- Non-solicitation agreement
- Termination clauses
- Dispute resolution clauses
The agreement should include a complete description of the project, including when work on it begins and when it will officially end. Milestones and goals to measure progress may also be included.
Include details that clarify what each party must do and provide to reach their mutual goal. For example, one company may provide services while another finances a project.
Projects often change direction as they progress, so it may also be helpful to include a review clause. This clause will allow parties to amend the original agreement more quickly.
Here is an article with an example collaboration agreement.
Who Needs a Collaboration Agreement?
Individuals or businesses entering into a joint partnership for a project should sign a collaboration agreement. The agreement provides a clear outline of the project’s schedule and helps delete responsibility to each party.
Collaboration agreements make joint ventures easier to navigate, especially when various resources are being pulled from each organization.
Any joint work by two or more businesses becomes shared copyright without a collaboration agreement. Neither party will be able to resell, use, or distribute any products or assets they make without the permission of the other owners.
The collaboration agreement includes termination clauses that outline what happens if one or more parties want to stop working on the project. It can protect the other parties’ interests, especially if they continue with the original plan and complete the project independently.
Here is an article on whether you need a collaboration agreement.
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Types of Collaboration Agreements
There are several collaboration agreements, each dependent on the industry and end goal. Customizing your collaboration agreement is the best way to protect both parties’ best interests.
Business Collaboration Agreement
Whereas general partnerships may lead to the formation of an entirely new business, the JV agreement keeps both businesses separate.
Businesses often collaborate to leverage each others’ markets or expand their offerings to reach a wider audience.
Project Collaboration Agreement
Project collaboration agreements are even more narrow in focus than business collaboration agreements. They can be between businesses or individuals, such as two people writing a book together.
Project collaboration agreements don’t form a joint venture or partnership. Instead, they legally bind two parties together to achieve a common goal.
Collaborating on a project carries less risk for parties and does not require an ongoing commitment to one another. Once the project is complete, the collaboration officially concludes.
Examples of project collaborations include:
- Developing a software
- Releasing a product line
- Creating new features on existing technologies
- Adding new options to companies’ products/services
Brands that undertake product collaboration tend to work in the same or complimentary industries. By working together on a project, they find ways to benefit their existing consumer bases while attracting a wider audience.
Music Collaboration Agreement
Music collaboration agreements are between two artists who want to make a song or album together. Factors such as copyrights, royalties, and intellectual property are the most significant elements of these collaboration agreements.
When two artists collaborate, they may want to work with a third-party producer and distributor. The contract can outline how the shared music will be published, what rights each artist has to the music, and how profits from sales, streaming revenue, and royalties can be distributed.
Here is an article with a collaboration agreement template.
How Do You Write a Collaboration Agreement?
You can write a collaboration agreement using a free template online or by contacting a business lawyer. Working with an attorney can eliminate the confusion and potential risk of oversights when writing a legal document on your own.
While you can outline all the collaboration details, ensure that you also include legal clauses to protect yourself. These clauses include:
- Intellectual property rights
Here is an article with more information on common contract clauses.
Difference Between a Collaboration Agreement and Partnership Agreement
A partnership agreement is much more unified than a collaboration agreement. When businesses form a partnership, they agree to share resources. Sometimes, they even form a separate entity together.
Collaboration agreements are designed to keep businesses’ resources and control over their assets independent of one another. While partnerships may have a unique management structure or merging of resources, collaborations are much more linear and prioritize individuality.
While both partnerships and collaboration agreements involve sharing resources, the latter focuses on a specific goal and set number of resources. As a result, partnerships are much more open-ended.
Here is an article with more detail on business collaboration.
Difference Between a Collaboration Agreement and Joint Venture Agreement
Joint venture agreements are a type of collaboration. Joint ventures are formed when two or more businesses agree to work together and share resources to increase their profits. Collaboration agreements emphasize a specific project and end goal, while joint ventures occur continuously.
Joint ventures are common among collaboration agreements between international parties. JV agreements make it easier for companies in different countries to access customers in one another’s markets.
Here is an article with more information about collaborations and joint venture agreements.
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