A collaboration agreement, also known as a formation of a consortium, is when several companies or organizations decide to join together, with common interests to complete a particular project. With the ability to work together between multiple organizations, the profits and deliverables which are created in the project can be shared, risk, and liabilities are also shared.
You’ll need to do all of the proper research and homework first, but this template will give you a head-start and a good framework. You should always consult a lawyer though before finalizing any contracts.
When you want to create a large project for several organizations to participate in, it can be a difficult endeavor. You need to decide how much each organization can do, and delegate tasks, roles, and responsibilities. The combination of resources between several organizations can enable you to complete the job much faster, but it may also introduce certain risks. You’ll want to find ways to balance not only resources, but also risks and liabilities, in order to have successful outcomes for your projects.
By increasing resources, larger, more ambitious projects can be completed than could be completed without collaboration. However, risks and liabilities can also increase, and there must be a way to efficiently divide the duties and responsibilities of many teams. If you meet and systematically negotiate all of the roles and tasks that each group must complete, and what each group will be able to take away as outcomes for the project, you can achieve bigger things than if you just work on your own.
A collaboration agreement might be useful for the creation of several different types of project outcomes or deliverables, but it’s particularly useful for the development of intellectual property. Copyrights, prototypes, and the production of blueprints can lead to incredibly valuable deliverables throughout your project, but the ownership of these components need to be planned carefully. We’ve included an intellectual property clause, and additionally clauses for non-compete and non-solicitation, so your information is safe. It’s always important to include these clauses because when the question of competition of interest comes up, you’ll need to do what’s best for your business.
Many collaborations require a combination of resources in order to be successful. This might be in the form of liquid, labor, or in-kind contributions. For each type of contribution, it’s important to assess the value, and ultimately, to make an assessment of the relative value of each party’s contribution to the project. In terms of an investment, the investors should be rewarded for putting money in quickly or at the beginning of a project, and keeping it in the project for a long term period.
You’ll need to codify or write up these systems of risk and reward to create incentives for the various parties of your collaboration. The terms and conditions should be fair and give each party in the collaboration a voice to make decisions. We’ve included sections which allow collaborators to specify exactly what contributions they will make to the project, and what deliverables or ownership of the project they’ll have as a reward by the end.
Just like in any team agreement, you’ll need to determine how business is completed, how decisions are made, and for what types of actions you need consensus for. When you model the decision-making process, you need to specify several different things. What types of decisions with your collaboration need to have group voting? How is the vote arranged? You’ll need to include information on when meetings take place, how to call a meeting, how to notify members, and even how to add items to the agenda for meetings.
These stipulations are things that every decision in your collaboration will depend on, so you’ll need to get them written and agreed upon in advance. It’s not enough just to have specific meeting procedures within your own company. The meeting procedures might be adopted from your company’s by-laws, but even this process needs to be stipulated in the collaboration agreement.
A common way to handle the many tasks involved with a collaboration agreement between companies is the establishment of committees. It’s true that it’s simply not possible to keep each leader and stakeholder fully up to speed on every task, so you can break the categories of tasks down into small groups. These groups are committees, and they should be multi-company, allowing for each company to delegate a representative, and can be hierarchical. The hierarchy of the committees can be similar to the hierarchy of employees in a company, with each reporting upward.
Reports are extra important when working on a large project across a large group of people. Reports allow the committees or working groups to share the critical status and other information with the committees or individuals above them, or horizontally. A leadership committee might delegate tasks to separate financial, legal, or engineering groups.
Without this concept of “divide and conquer,” the benefits won’t be realized of working in a large group, including the increase of personnel resources, time, and financial resources. A critical part of the ability to accomplish very large projects is the process of splitting up work into small enough parts for a singular team to complete.
A collaboration agreement is a legally binding document, and as such, it requires certain elements in order to be fully legally binding and enforceable. We’ve made it easy for you to elect certain clauses you need, and all of the mandatory clauses are already included in this template. It’s easy to fill in digitally and enjoy a fully paperless workflow too, with digital signatures built into PDF Reader with Dottedsign. Don’t wait to be able to sign the document in person or on paper, and sign instantly online with legally enforceable e-signatures.