A collaboration agreement sets out the arrangements between parties that jointly deliver a project, combine services or work together commercially over a longer period. Without clear arrangements, conflicts arise quickly, not only about money, but also about expectations, responsibilities and what happens if the collaboration takes a different course than anticipated.
A sound agreement therefore does more than describe what the parties want to achieve together. It makes clear in advance who is responsible for what, which risks each party bears and how decisions are taken when interests diverge.
Clarity on role and responsibility
One of the most important elements is the allocation of tasks. General wording such as “parties will work together on the project” is often insufficient. It must be clear who delivers which services, who maintains contact with clients, who may take decisions and which party is responsible when a component is delayed.
Remuneration also deserves more attention than the agreed amount alone. Think of invoicing moments, additional costs, extra work, indexation and what happens if a project stops early.
In long-term collaborations it can moreover be wise to make arrangements for substantially changed circumstances. Since the reform of Book 5, Belgian contract law contains a regime for unforeseeable circumstances that make performance excessively onerous. Parties can make further arrangements on this in their contract. That way you avoid having to work out only during a crisis who bears which risk.
Liability: where does the risk lie?
Liability is also a crucial part of the agreement. Which party is responsible when a fault causes damage? Is there a maximum amount? Are certain types of damage excluded? And must the parties hold specific insurance?
Under Belgian law, contractual freedom is broad, but not unlimited. Rules against unlawful B2B terms also apply between undertakings. Clauses that create a manifest imbalance between the rights and obligations of the parties can therefore be problematic. FPS Economy mentions, for example, far-reaching exclusions of liability and excessively long commitments as possible points of attention.
A liability clause must therefore not only sound favourable for one party; it must also stand up legally when a dispute actually arises.
Duration and termination: also regulate the exit
Many agreements focus strongly on the start of the collaboration, whereas it is often the end that causes the most discussions.
That is why duration and termination must be clearly regulated. Is the collaboration for a fixed or an indefinite term? What notice period applies? When can it be terminated immediately? What happens to ongoing assignments, outstanding invoices and material belonging to the other party?
So-called exit obligations can also be important. Think of returning documents, removing access to systems or the further handling of clients introduced during the collaboration.
A sound collaboration agreement therefore describes not only how the parties start, but also how they can part ways in a professional manner.
Intellectual property: who may continue to use the result?
In projects that give rise to new content, software, designs, methods or know-how, intellectual property must be examined explicitly.
That is especially important when both parties contribute something. Who becomes the owner of the final result? Does the other party receive only a right of use? May a method that has been developed later be reused for other clients?
A useful distinction is that between intellectual property that already existed before the collaboration and new rights created during the project.
Without clear arrangements, a collaboration can be commercially successful and still give rise afterwards to discussion about who may actually exploit the result.
The title of your contract does not always determine what it is legally
A less obvious point of attention is that the name “collaboration agreement” does not determine everything.
The actual performance of the agreement remains decisive. When someone is formally engaged as an independent collaboration partner, but in reality works under the authority of the other party, the relationship may be legally recharacterised. FPS Employment emphasises that the chosen title of the agreement is not in itself a decisive criterion; the factual performance also counts.
That is especially relevant in long-term collaborations with freelancers or independent consultants. The agreement must therefore align with how the parties actually work together, not only with the name at the top of the contract.
Other areas of law can also come into play
Depending on the activity, account may also have to be taken of tax law, environmental law or regulation within the public sector.
In a construction or real-estate project, for example, permits or environmental conditions can be decisive for performance. In collaborations with public authorities, specific rules on public procurement or decision-making may apply. And the chosen remuneration or collaboration structure can have tax consequences.
A legally robust collaboration agreement is therefore not drafted in isolation from the project, but starts from the parties’ concrete activity.
A term sheet can already have legal consequences
In some cases the collaboration is preceded by a term sheet. In it, the parties record the principal starting points of their future collaboration before the definitive agreement is drawn up.
That can be useful to obtain rapid clarity on the main commercial points, but a term sheet is not automatically entirely non-binding.
It is therefore wise to state clearly which parts are binding and which only reflect the parties’ intention. Think, for example, of confidentiality, exclusivity, costs or the way in which negotiations can be terminated. That way you prevent the parties from having different expectations about the legal meaning of the same document.
Sharing sensitive information first? Think of an NDA
When parties exchange confidential information during the preparatory phase, an NDA may be appropriate.
Think of pricing structures, client information, technical know-how or plans for a new project. An NDA can determine which information is confidential and for what purpose it may be used.
An NDA and a collaboration agreement therefore have a different function. The NDA primarily protects the information that is shared, whereas the collaboration agreement structures the full relationship between the parties.
Sound arrangements make collaboration easier
A strong collaboration agreement is not a collection of legal clauses for when things go wrong. It gives the parties a clear framework in which they can work. Anyone who knows which tasks, powers and risks they bear needs to spend less time during the project on discussions about what was originally intended.
