Partnership Agreement

This Cover Page, which includes Business Terms and legal Key Terms

The Cover Page contains the business details (Business Terms) and legal details (Key Terms) that you can customize from deal to deal.

Learn about how standard agreements work in our anatomy of a contract blog post.

The Common Paper Partnership Standard Terms Version 1.1 posted at…

The Partnership Agreement incorporates the Standard Terms by reference, with a link to commonpaper.com/standards/partnership-agreement/1.1. Each version of the Standard Terms will remain unchanged and posted our website, and updates will get posted as new versions.

Incorporated by reference

Incorporating the Standard Terms by reference ensures there are no hidden changes in the Standard Terms.

However, if the Cover Page omits or does not define a Variable, the default meaning will be “none” or “not applicable” and the correlating clause, sentence, or section does not apply to this Agreement

Some variables are optional. When optional variables are removed from the Cover Page, the related clauses will not apply to the contract.

A copy of the Standard Terms is attached for convenience only.

This allows including a copy of the text of the Standard Terms for convenience. You can find a version without the standard terms attached on the partnership agreement page.

Obligations

The Partnership Agreement supports 3 main types of relationships:
– Co-marketing where one or both parties engage in various marketing activities.
– Sponsorships where one party pays the other party, sometimes in exchange for specific benefits. For example, paying to be the sponsor of an event.
– Referrals where one or both parties make new customer referrals to the other party, sometimes in exchange for a referral fee.

Because this is not a traditional customer vendor relationship, the parties are referred to as Company and Partner, rather than Provider and Customer. Although Company and Partner can mean either side of a partnership, each term should be used uniformly throughout the agreement to refer to one company, respectively. To avoid confusion, we’ll refer to Company as “your company” and Partner as “your partner” or “the other party”.

Company will

This section is used to outline all of your partnership obligations.

[    ]

Square brackets with blank space indicate choices that are optional. You can pick none, one, or more than one. Indicate selections by checking the box for those you wish to include and/or deleting the unused options.

Engage in the following promotional activities

This option is where your company would outline its promotional activities.

[____]

Square brackets with text or underlined blank space indicate a field you can fill in or customize before sending the agreement.

For this one, list the marketing activities your company is responsible for undertaking. For example, “Promoting The Big Event in 2 emails, 1 blog post, and 5 social media posts.”

Provide the following promotional materials

This option is where your company would outline any promotional materials it is responsible for creating, such as a flyer or brochure.

[____]

The trademark rights in Section 3 of the Standard Terms are tied to the Obligations section. So if your company will need to include your partner’s logos or Brand Elements in collateral, it would be important to outline the anticipated collateral here.

Provide the following sponsored benefits

This would apply where you are providing some benefits to your partner, who is paying a sponsorship fee.

[____]

For example, if your partner is paying to be a platinum sponsor of your company’s annual conference and will receive benefits as a result, you would list the sponsorship level benefits they receive. Common examples include the number of complimentary tickets, inclusion as a platinum level sponsor on banners, full-page color ad in the event brochure, etc.

Make Referrals to Partner.

This option applies when your company will be making referrals to your partner.

[____]

If your company will be making referrals to your partner, define what criteria a prospective customer must meet in order to qualify as a valid referral. The details for this field will likely be provided by your partner. The definition of a “Referral” is used to determine when a referral fee is paid (if there is one).

For example, A “Referral” to Partner is a third party that meets all of the following criteria: does not have and has not had an account with Partner within the last year and commits to at least 1 year of services.

Pay Partner the following amount according to the Payment Schedule

This option sets any payment requirements your company has.

[____]

If your company was paying your partner a flat-fee, such as for marketing activities or as an event sponsor, examples of how you could say that include:
– $100 per marketing email
– $20,000 sponsorship fee
– $1,000 campaign fee

If your company was paying your partner for Referrals, examples of how you could say that include:
– 1% of the total first year contract value per Referral
– $5 per Referral
Note: “Referral” is defined in the other party’s Obligations section, so any qualifying criteria should be included there.

[    ]

If your company is providing any Brand Elements (defined in Section 13.5 of the Standard Terms), your partner will need to receive a license to use your Brand Elements. If that is the case, check this box to make it clear that your company is granting those rights as a licensor.

Partner will:

This section is used to outline all of your partner’s obligations.

Engage in the following promotional activities

This option is where your partner would outline their promotional activities.

[____]

List the marketing activities your partner is responsible for undertaking. For example, “Promoting The Big Event in 2 emails, 1 blog post, and 5 social media posts.”

Provide the following promotional materials

This option is where your partner would outline any promotional materials they are responsible for creating, such as a flyer or brochure.

[____]

The trademark rights in Section 3 of the Standard Terms are tied to the Obligations section. So if your partner will need to include your company’s logos or Brand Elements in collateral, it would be important to outline the anticipated collateral here.

Provide the following sponsored benefits

This would apply where you are paying a sponsorship fee and your partner is providing some sponsorship benefit to you.

[____]

For example, if your company is paying to be a platinum sponsor of your partner’s annual conference and will receive benefits as a result, you would list the sponsorship level benefits you expect to receive. Common examples include the number of complimentary tickets, inclusion as a platinum level sponsor on banners, full-page color ad in the event brochure, etc.

Make Referrals to Company

This option applies when your partner will be making referrals to your company.

[____]

If your partner will be making referrals to your company, define what criteria a prospective customer must meet in order to qualify as a valid referral. The definition of a “Referral” is used to determine when a referral fee is paid (if there is one).

For example, A “Referral” to Company is a third party that meets all of the following criteria: does not have and has not had an account with Company within the last year and commits to at least 1 year of services.

Pay Company the following amount according to the Payment Schedule

This option sets any payment requirements your partner has.

[____]

If your partner was paying your company a flat-fee, such as for marketing activities or as an event sponsor, examples of how you could say that include:
– $100 per marketing email
– $20,000 sponsorship fee
– $1,000 campaign fee

If your partner was paying your company for Referrals, examples of how you could say that include:
– 1% of the total first year contract value per Referral
– $5 per Referral
Note: “Referral” is defined in the other party’s Obligations section, so any qualifying criteria should be included there.

[    ]

If your partner is providing any Brand Elements (defined in Section 13.5 of the Standard Terms), you will need to receive a license to use their Brand Elements. If that is the case, check this box to make it clear that your partner is granting those rights as a licensor.

Territory

Use this field to define the geographic area where the partnership will occur.

Payment Process

This is an optional field, but should be included if either or both parties will be making any sort of payment under the contract. Payment Process defines where invoices or bills should be sent in order to be paid. It could be an email address, physical address, or some other method.

Payment Schedule

This is an optional field, but should be included if either or both parties will be making any sort of payment under the contract.

[ Fill in payment schedule ]

This can be the same for both parties or different, depending on the circumstances. Some examples of a payment schedule include:
– 30 days from receipt of invoice (particularly if there are recurring payments, like for referral fees)
– 60 days before event
– by a specific date
– upon certain milestones, such as accrual of a minimum amount of referral fee

End Date

This field sets when the contract and partnership obligations and rights end.

[ fill in custom end date ]

For an ongoing partnership, you could write “Until terminated by either party.”

Note: There is no termination for convenience in the Standard Terms, but it could be added using the Changes to Standard Terms field below.

Effective Date

The Effective Date is when the contract starts.

Governing Law

Governing Law identifies the set of laws under which the contract will be interpreted.

Chosen Courts

Chosen Courts identifies where a lawsuit related to the contract can be filed in the event of a dispute.

Covered Claims

Including Covered Claims is optional. Use this Variable to set which claims each party will be responsible for under an indemnity obligation.

Section 10 of the Standard Terms includes the full language around indemnities and Covered Claims, including narrowing the obligation to claims brought by entities other than the company, partner, end users, or their affiliates (i.e., third party claims).

If there are no Covered Claims, delete the entire row.

Company’s gross negligence or willful misconduct; or (b) Company’s breach or alleged breach of its representations and warranties in Section 7, including the intellectual property representations or warranties.

This reflects a default for company Covered Claims (i.e., what indemnification obligations your company has) set by the Committee. You can modify it in any way to address your particular situation.

Partner’s gross negligence or willful misconduct; or (b) Partner’s breach or alleged breach of its representations and warranties in Section 7, including the intellectual property representations or warranties.

This reflects a default for Partner Covered Claims (i.e., what indemnification obligations your partner has) set by the Committee. You can modify it in any way to address your particular situation.

General Cap Amount

The General Cap Amount is the maximum dollar amount a party to the contract could be responsible for in the event of a legal dispute over the contract. It applies to all contract claims, except for Increased Claims (below), Unlimited Claims (below), and claims that cannot be limited as a matter of law.

Deleting the General Cap Amount does not set it to $0. Instead, it would mean there is no monetary limitation of liability that applies to the contract, and either party could be responsible for an unlimited amount of monetary damages in the event of a legal dispute over the contract.

[    ]

This option sets a variable liability cap amount that fluctuates with the cost of the contract. It is expressed as a multiple of fees, for example 1x or 2x. This option sets the time period for calculating the fees to the 12 months before the claim.

Paid or payable

Including fees that are “paid or payable” (but potentially unpaid) helps balance the incentives between the two parties. If the liability cap is set to the fees paid but does not include payable but unpaid fees, a party that owes money could pay a fraction of the cost they agreed to and limit their liability to that lower amount.

[    ]

This option sets a fixed liability cap amount. It is expressed as a monetary amount, for example $1,000,000.

In general, a $0 liability cap would be unenforceable.

[    ]

This option sets a hybrid liability cap amount. It combines the two above options.

Greater

This is set to “greater” rather than “lesser” to avoid situations creating a $0 liability cap, for example where there are zero fees due.

Increased Claims

Including Increased Claims is optional. If using this Variable, it will define certain claims that are not subject to the General Cap Amount, but are instead subject to the Increased Cap Amount (below). In addition, Increased Claims are not subject to the damages waiver in Section 9.2.

If there are no Increased Claims, delete the entire row.

Increased Cap Amount

Including an Increased Cap Amount is optional, but it must be set if you are including Increased Claims. If there are no Increased Claims, delete the entire row.

Unlimited Claims

Including Unlimited Claims is optional. If using this Variable, it will define certain claims that are not subject to any monetary liability cap.

Additional Warranties

Including Additional Warranties is optional. Section 7 includes baseline representations and warranties, including ones regarding intellectual property. This field can be used to include more representations and warranties. If there are no Additional Warranties, delete the entire row.

Attachments and Supplements

All sections in the Attachments and Supplements section are optional. Delete any rows that do not apply.

DPA

A Data Processing Agreement is commonly used by companies that need to comply with the GDPR. GDPR is the legal regulation that protects an individual’s personal data in Europe (EU) and the European Economic Area (EEA). It restricts what companies can and cannot do with the personal data of EU/EEA individuals.

DPA

If your company or your partner has brand guidelines that must be followed or that can help in creating collateral for the partnership, include them here.

Changes to Standard Terms

Including Changes to the Standard Terms is optional. Examples of how to use this section can be found in the Language Library.

Obligations

Because partnerships vary from deal to deal, this creates the obligation to perform the partnership without needing to detail exactly what type of partnership is occurring. Instead, the Obligations field in the Cover Page provides that detail.

Trademark License

The license grant in this section is specifically tied to the Obligations listed in the Cover Page.

Some companies would also like to generally identify its partners or partner program members separate from or in addition to those Obligations. If this is something you want to do, you could use the Changes to the Standard Terms section on the Cover Page to grant unilateral logo rights or mutual logo rights.

Licensor

The partnership operates as a bilateral agreement between two parties. Under this construct, either Company or Partner (or both) can act as licensors. For greatest clarity, use the Cover Page to specify which party or parties will be acting as a licensor.

In the Territory

This limits the trademark license to the geographic region defined on the Cover Page. This allows granular control over the extent of the partnership without needing to edit the Standard Terms themselves.

To perform its Obligations, and only in accordance with the terms of the Agreement and any Brand Guidelines provided by Licensor

Many trademark licenses include a general catch all reduction in scope that subjects the license rights to licensor’s prior approval. This is often written as: “subject to Licensor’s prior written approval.”

After much discussion, many Committee members agreed that the Cover Page itself should operate as prior approval. The rationale is that the parties should not be entering into the contract if they are not consenting to the outlined activities, and requiring additional prior approval would only stymie the relationship. Moreover, early stage companies often move at a quicker pace that larger enterprises.

However, the Committee also saw the need to balance the interests of larger companies with more established trademark requirements. Thus, the license grant is still subject to the terms of the Agreement (including the restrictions in Section 3.3 below) and any Brand Guidelines included on the Cover Page.

In addition, each Licensee will promptly cease any use of the Licensor’s Brand Elements upon written notice from Licensor

This sentence provides licensors with the ability to have more granular control over the use of their brand despite not having prior approval rights on marketing collateral.

If the parties have a DPA

You can incorporate your own DPA or use the Common Paper DPA.

Escalation Procedure

Brand partnerships are built on trust and relationships. In order to foster a sense of working together and aligning incentives, rather than allowing the only recourse to be a lawsuit or threatened lawsuit, the Partnership Agreement establishes a lightweight, informal escalation procedure to allow and encourage the parties to resolve any issues they run into while working with one another.

The escalation procedure can be supplemented to match your particular circumstances using the Changes to the Standard Terms field on the Cover Page.

Term

This agreement does not automatically renew.

Termination

There is no termination for convenience in the Standard Terms, but it could be added using the Changes to Standard Terms field on the Cover Page.

It has all necessary rights under its Applicable Laws to collect and share any Personal Data it may collect or share under this Agreement

This representation and warranty is particularly important for partnerships that include account mapping.

The copyright, trademark, right of publicity, or other proprietary rights of any third party

This intellectual property representation and warranty does not cover patent rights due to the three contemplated partnership models for this standard (co-marketing, sponsorships, and referrals).

The liability caps in Section 9.1 do not apply to any Unlimited Claims

Neither the General Cap Amount nor the Increased Cap Amount apply to Unlimited Claims. However, the damages waiver in Section 9.2 still applies to Unlimited Claims. The one exception is if Breach of Section 11 (Confidentiality) is an Unlimited Claim, in which case no cap amount and no damages waiver would apply.

The liability provisions are set this way because the trend in tech companies has been to use an Increased Cap Amount, or supercap, for higher risk concerns such as personal data issues. In addition, having fully uncapped and unlimited claims has come to be seen as a risk that is hard to justify. As a result, companies have more and more relied on the damages waiver to have some measure of risk mitigation when they do remove a liability cap on certain claims.

Made by someone other than Partner or its Affiliates

This excludes claims by the partner or its affiliates so that your company is not responsible for first party claims. In other words, your partner could not sue you and then seek indemnification coverage for the lawsuit they filed.

Made by someone other than Company or its Affiliates

This excludes claims by your company or its affiliates so that your partner is not responsible for first party claims. In other words, your company could not sue your partner and then seek indemnification coverage for the lawsuit you filed.

Exclusive Remedy

It is very common for indemnification obligations to be the sole and exclusive remedy for claims that are subject to indemnity. This is important in situations where there is overlap between other contractual obligations or commitments (such as representations and warranties) and claims that are subject to indemnity.

Governing Law and Chosen Courts

Common Paper standard agreements were created with the laws of the United States in mind by a committee of US-based attorneys.

The parties will bring any legal suit, action, or proceeding about this Agreement in the Chosen Courts and each party irrevocably submits to the exclusive jurisdiction of the Chosen Courts.

Some companies prefer arbitration for speed and confidentiality reasons. You could use the Changes to the Standard Terms section on the Cover Page to add mandatory arbitration.

Neither party may assign any rights or obligations under this Agreement without the prior written consent of the other party.

Alternatively, you could use the Changes to the Standard Terms section on the Cover Page to permit assignment for an acquisition or corporate transaction.

However, if the Cover Page omits or does not define a Variable, the default meaning will be “none” or “not applicable” and the correlating clause, sentence, or section does not apply to the Agreement.

Some Variables are optional. When optional Variables are removed from the Cover Page, the related clauses will not apply to the contract.

Free to use under CC BY 4.0

All Common Paper agreements are released under the Creative Commons CC BY 4.0 license, which enables you to use the agreements in any way, as long as you leave in the attribution.