The Principle Business Co-operation Agreement between two companies works as an official document for the formation of a business. This agreement is required when two parties want to form a business relationship and work towards reaching the common business goal. An exclusive business cooperation agreement contains the principles of the business that are maintained during the tenure of the agreement.
What Is the Principle Business Co-operation Agreement?
A Principle Business Cooperation Agreement refers to a formal business document that outlines the basic terms and conditions of the agreement between the parties, whether it may be group, entity, or individuals signed either as an exclusive business cooperation agreement or cooperation between multiple entities for the same project through sub-liaising
Who Takes a Principles Business Co-operation Agreement?
Principles Business Cooperation Agreement is made between two parties who desire to work towards a common business goal. In a business cooperation agreement between two companies, the parties involved may be individuals or groups.
Purpose of a Principles Business Co-operation Agreement
The primary purpose of this agreement is to outline the understanding between the parties involved in the agreement and also shows the desire and willingness of the parties to work towards the agreed goal in a co-operative manner.
Contents of a Principles Business Co-Operation Agreement
The contents of a Principles Business Cooperation are;
- The names and address of the parties involved
- Date and duration of the agreement
- The goals, purpose, and objectives of the agreement
- The initial terms and conditions of the agreement
- Details of the responsibilities that have to be fulfilled by both the parties
- Details of promises and warranties
- The duration that the parties have to maintain the terms to correct any dispute
- Details of the ownership of the intellectual property created by each party
- Details of if any of the party can be excluded from their obligation which is beyond their control
- Details of clauses including assignment, non-disclosure, and arbitration
- Details on the undertakings by Party A and Party C which including details on the performance obligations, support, and supervision of Party ‘A’s performance.
- Confidentiality details wherein all confidential information shall not be disclosed by any party, in any manner to any third party. For this purpose, all parties shall adopt measures to confine any circulations of confidential information.
- Liability for Default which states that any breaching party shall pay compensation for any loss incurred toward the non-defaulting party, in writing.
- Force Majeure that elaborates on natural occurrences like fire, earthquake, and other acts of God. In case any of the party fails to perform any of its obligations under the influence of force majeure, no party will bear the liabilities.
- Applicable Laws and Settlement of Disputes, i.e in case of any disputes, either of the parties has the right to sue at a PRC court with competent jurisdiction thereover against the other party.
Any standard business cooperation agreement template or a business cooperation agreement pdf will mandatorily have these inclusions. These further can be tailored to meet your specific requirements and concerns in the agreement.
How to Draft a Principles Business Co-operation Agreement?
The following is the process of drafting of a Principles Business Cooperation;
- Mention The names and address of the parties involved in the agreement
- Mention Date and duration of the agreement on which the agreement will be commenced
- Mention the goals, purpose, and objectives of the agreement which the business wants to fulfill in the near future
- Mention the initial terms and conditions of the agreement for the smooth running of the business in an effective manner.
- Mention the responsibilities and duties of the parties to avoid any dispute and confusion in future
- The representations and warranties by both the parties including undertakings by the parties
- Confidentiality clause protecting the information generated during the course of business for the tenure of the agreement
- The liability of default and the remedies for default under the contract including force majeure
- Applicable laws and settlement of disputes
- Mention the details of promises and warranties if any required to be furnished in the agreement
- Mention the details of the ownership of the intellectual property created by each party to avoid dispute for ownership rights in future
There is no such negotiation process involved in this type of agreement as it is related to the principles of the business that has to be followed during the tenure of the business. Thus, both the parties can put forth their point of view of which principles should be followed and best for the business.
Benefits of a Principles Business Co-operation Agreement
This agreement is to outline the understanding between the parties involved in the agreement and helps to resolve the dispute, if any, that arises, in an amicable manner. Thus, this agreement is also known as Memorandum of Understanding and called a Cooperation Contract.
What Happens in Case of Violation?
In case of breach of the agreement, both the parties have the privileges to sue each other in the court of law for the loss or damage suffered to them or business, and also, they can claim for the compensation of the losses suffered. In most cases, the liability of default is included in the contract which would come into force in the event of a default. The parties might also agree on an arbitrator to resolve the dispute. Courts of law might grant specific performance or injunctive relief if sensitive data is involved
This agreement is required when two parties want to form a business relationship and work towards reaching the common business goal. The document mainly specifies the principles of the business that be maintained during the tenure of the agreement.
Sample for Principle Business Co-operation Agreement
A sample of the agreement can be downloaded from below.
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Principle Business Co-peration Agreement - Download this USA Agreement of Limited Partnership for only $9.99
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