1

Partnership Agreements

Setting Up and Maintaining the Partnership

A formal and very important part of collaboration is the need to develop a written agreement delineating the details of a partnership. The first thing to think about is whether a formal contract is the correct document to choose, or whether another type of agreement would be sufficient.

A contract is the right document for a major collaborative undertaking such as a merger or a joint venture. It is legally binding and enforceable in a court of law, and protects the interests of all parties. Each partners’ specific obligations are noted, and the document follows the necessary elements of offer (one of the collaborating parties puts forth an offer of terms for the contract), acceptance (the other party agrees to the offered arrangement), and consideration (a bargain in which each party offers something of value, or promises to perform designated duties, according to the terms of the arrangement).

A memorandum of understanding (MOU) serves a similar purpose as a contract, but it is not as strict or formal, and it is not usually legally binding. Much like a contract, the document outlined the goals, expectations, and duties involved in the collaboration, but it tends to be more direct, brief, and lacking the types of complex terms and conditions that are included in a contract. An MOU can be a good option for a more informal partnership, or it can sometimes be used as an early form of agreement before a more official contract is drafted.

Under some circumstances, an MOU can be deemed legally binding — particularly if the language used is comparable to that of a contract, or if the MOU features the elements of an offer, acceptance, and consideration. If you are certain that you do not want your agreement to be legally binding, you should be sure to say so within the document. Be advised, though, that if you proceed with a non-binding agreement, you are missing out on the protections that a contract would provide.

A much less formal letter of agreement is a good approach when the partnership is more of a collaboration, such as help with an event. 

Whether a formal contract or a slightly simpler document like a MOU or letter, the document should cover:

Goal/vision for partnership. Be clear on the specific aim of the collaboration. Why are you partnering with each other and what do you each plan to get out of it? Determine whether you are working together to broaden the reach of your organizations, to tackle a specific issue or project together, for reasons of financial sustainability, or any other type of purpose. Note whether this entails a formal or an informal partnership, and whether it will be short term or long term.

Given the complicated nature of collaborations and the possibility for unexpected challenges to crop up along the way, make sure that each organization has a thorough understanding and agreement on what the collaboration is about before delving in too far. Having this information in writing ensures that everyone is on the same page, and cements the commitment of each group to the pursuit of the common goal.

Division of control/responsibility. Think about each partner’s role in the collaboration, the way the work will be divided, and the level of control each group will have; whether a 50/50 partnership or a partnership with a dominant role, this is important to make very clear in any written agreement to avoid problems later.

In addition, include a list of the responsibilities that each organization will handle, and note any that will be shared by both. A written agreement can prevent confusion or remedy forgetfulness.

Finally, it is useful to designate at least one point person to coordinate the collaboration and act as the official contact for any issues that arise. If possible, assemble a management team to handle the coordination aspect.

Timetable. Whether for a permanent alliance to join forces for a set time to work toward a concrete goal, a written agreement should note the duration of the collaboration, along with designated points for review of the agreement.

This form should be used to report problems or issues with this website. Questions pertaining to a program or service provided by DLG should be addressed to contact information located on the specific program pages.

Was this content helpful?