When two businesses come together to form a partnership, they typically draft a business agreement to outline the terms of their collaboration. This agreement is a vital document that outlines the expectations, obligations, and responsibilities of both parties.
If you`re new to drafting a business agreement between two companies, it`s normal to feel overwhelmed by the idea. Luckily, there are plenty of samples and templates available online that can help guide you through the process.
In this article, we`ll take a closer look at what you should consider when drafting a business agreement between two companies, as well as provide a sample template to get you started.
Key Elements of a Business Agreement
Before diving into a sample business agreement template, let`s review the key elements that every business agreement should include:
1. Purpose: The purpose of the agreement should be clearly defined, outlining what both parties hope to achieve through their collaboration.
2. Scope: This section should detail the specific activities that the partnership will engage in, as well as any exclusions or limitations.
3. Term: The term of the agreement outlines the duration of the partnership and any provisions for renewal or termination.
4. Roles and Responsibilities: This section outlines the obligations and responsibilities of each party involved.
5. Confidentiality and Intellectual Property: This section details how confidential information and intellectual property will be handled throughout the partnership.
6. Payment Terms: The payment terms should detail how payment will be handled between the two companies.
7. Termination Clause: A termination clause should be included, detailing the circumstances under which the partnership may be terminated.
8. Governing Law: This section outlines the governing law that will be used to interpret and enforce the agreement.
Sample Business Agreement Template
Here`s a sample business agreement template to help get you started:
[Company A] and [Company B] agree to enter into a partnership for the purpose of [purpose]. The partnership will be governed by the following terms and conditions:
1. Scope: This agreement covers the following activities: [list activities]. Exclusions include [list exclusions].
2. Term: The initial term of this agreement will be [term], with provisions for renewal [list any renewal provisions]. Either party may terminate the agreement with [notice] written notice to the other party.
3. Roles and Responsibilities: [Company A] will be responsible for [list responsibilities], while [Company B] will be responsible for [list responsibilities]. Both parties will work collaboratively to [list joint responsibilities].
4. Confidentiality and Intellectual Property: Both parties agree to keep confidential information shared during the partnership confidential. Any intellectual property created during the partnership will be jointly owned by both companies.
5. Payment Terms: [Payment terms, including any specific milestones or payment schedules].
6. Termination Clause: This agreement may be terminated by either party under the following circumstances: [list termination circumstances].
7. Governing Law: This agreement shall be governed by the laws of [governing jurisdiction].
Conclusion
Drafting a business agreement between two companies may feel daunting, but with a little bit of guidance, it can be a straightforward process. Use this sample template to build your own agreement and ensure that your partnership is legally sound and beneficial for all parties involved.