“Let’s collab!”
If only it were that simple. You need something written to underpin your idea, not just fun words or good intentions. Perhaps something like a collaboration agreement.
A collaboration agreement targets a specific project, not an ongoing relationship, making it ideal for one-time collaborations. This legal document helps to keep you on track and accountable by outlining your expectations, responsibilities and timelines. In simple terms, it formalises the commercial dealings between individuals (or businesses) who want to work together on a project for joint benefit. Without a written agreement in place, it is harder to prove after the fact what your intentions were at the time you agreed to commercial terms.
But what to put in it? Or if you are given one to read, what should you look for? Well, to paraphrase the words of Lady Whistledown, read on, dear gentle readers.
What is a collaboration?
Let’s think about the word ‘collaboration’ for a moment. It connotes partnership, cooperation and working together to achieve a common goal. As a starting point, a collaboration agreement should set out the details of your joint project, defining your respective duties and obligations as well as identifying how you share profits and rewards. It also sets out what happens if things don’t go as planned and how you get out.
If you are sitting down to write a collaboration agreement, then you should ensure that at a minimum, it addresses the following matters:
- Does it describe the nature of the collaboration? It should spell out the nature of the partnership so that anyone picking up the document can understand the aim of the agreement. Have you described the overall objective of the collaboration? Does it say what upfront/ongoing contributions are required from each of you in terms of time to be spent, allocation of personnel and day-to-day management and reporting? Do you need to include or cross-refer to your brief?
- Does it set out each party’s roles and obligations? Write down how you’ve agreed to the division of labour, e.g. who is responsible for creating content, promoting the project, and delivering the final product. Do you have the ability to review the scope of the collaboration and change it as you go along? If not, you should. Will you have any duty to regularly report on the status of your joint project? If yes, to what level of detail and how often?
- Have you agreed on how much you get paid and who gets what compensation? Money is always hard to talk about, but you mustn’t shy away from it if you want to ensure your future success. Specify in your agreement the payment terms and obligations, how much you get paid, when you get paid (e.g. is it a one-time payment, multiple instalments or percentage/performance based?) and what happens in the event of non-payment.Think about and address confidentiality upfront. You will inevitably have to disclose detailed financial information not only to your collab partner but also to their solicitors and other professional advisors such as accountants. You should therefore, establish boundaries around what can and cannot be disclosed, and the circumstances of such disclosure.Probably the biggest issue you will be dealing with is intellectual property. You will need to think about what each of you bring to the table and how you want to protect and exploit those ideas. Spell out who is contributing what, what happens to content that you create together and how you can use it going forward. You also need to think about who owns the intellectual property when your collaboration comes to an end, and how each of you can exploit it going forward.Termination….. how do you each get out? What happens if your project fails, stalls or goes wrong and what does that look like for you (and for your investment). Your collab agreement should specify what happens if one of you decides to exit. Here, you should be thinking about your resources, suppliers, industry contacts, agreements and how you divide this. Assuming your collab ends well, consider including a clause setting out what kind of support you will offer each other and for how long.Other issues to look for include:liability limitation – carefully consider the allocation of liability and how best to allocate/mitigate the risks
- non-solicitation – a clause dealing with non-solicitation may be needed if you are worried that your valuable employees, consultants or similar are at risk of poaching.
- data protection – what systems and processes are in place if you are collecting/processing personal data, especially if it is shared, used, stored or transferred as part of your collaboration.
- disputes – this is the “how you resolve and where you resolve” bit. If you are a 50/50 collab, decide up front how you will resolve conflict or deadlock in decision-making. Also consider if your collab partner is outside of the UK, where you want to determine the dispute.
While collab agreements are commercial arrangements, don’t assume that anything is a given. You may have more bargaining power than you think because your collab partner doesn’t have the skillset they need to get the project up and running. Work out your objectives, tailor your agreement to your needs, take the time to work out the details, and be realistic but most of all, ensure you agree on who owns what at the conclusion of your project. Ask for professional guidance; we here at Farringford Legal have both the professionals and the experience to help you get the best out of your collaboration.
Written by Belinda Sullivan
