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A very important aspect of a formal partnership is the legal terms and
conditions governing the respective obligations of the parties.
Sufficient time and energy should be spent determining the nature
and scope of the prospective relationship. The parties should outline,
in detail, all possible business, technical and legal requirements prior
to initiating contract discussions. This will ensure a mutuality of
understanding and should shorten the negotiation period.
While certain
relationships obviate the type/form of agreement required (eg subcontractor
agreement for hired services or development agreement for software manufacturing),
in many cases, the relationship is not well enough established to enable the parties
to utilize a standard form or boilerplate. In such instances, it is recommended that
the parties negotiate an umbrella or master agreement that will establish baseline
operating and legal terms.
Key provisions to be considered are: term, scope,
general description, definition of terms, confidentiality, notices, liability
limitations, references to exhibits/addenda, and general legalees. As the
relationship develops, specific statements of work (SOW's) should be established
to govern the associated activities. Regional or local agreements may also be
established to support localized activities/requirements.
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