Impact on taxation and liability. As a general rule, a contractual alliance does not involve the creation of a separate and profitable transaction in which the parties include profits and costs. If the agreements are contributions to income or profits, it is important to take into account any debts. An alliance could be described, fiscally or legally, as a “partnership” that: Intellectual Property Rights (IPRs). Article 6 provides for a relatively simple exchange of know-how and technical development. The ITC model contract provides a framework for key points. It provides that the specific IPRs developed under the alliance will be jointly owned by the Alliance and that the marketing will require the agreement of both parties. Clarity is important with respect to rights after the end of the Alliance. In many cases, more detailed licensing agreements are appropriate for IP agreements, particularly where the intellectual property of one party is made available to the other party as part of the alliance. Development in common. If the alliance is a common development agreement, Article 4 (“common projects”) is useful: the “organization” instituted in Article 2 has the power to define and supervise joint development work and the parties commit to funding such joint projects. In many cases, it is essential to indicate technical requirements, technical tolerances of results and external licences in a separate “work statement” that will also be attached to the schedule.
Where joint activities involve an exchange of key personnel or personnel, Article 8 provides certain safeguards. One reason for dismissal is particularly common in alliances and close cooperation: resignation for “change of control” of the other party. The reason is the personal nature of cooperation and the mutual trust that is necessary in cooperation. This mutual trust would generally be mitigated when the partner has been taken over by a competitor or when the commitment of the partner`s management is questionable after the replacement of those directly affected. The main idea: the contractual alliance contract is a framework for an alliance or cooperation between two parties that does not create a separate, common, company-specific unit. The alliance is based exclusively on contractual agreements between the parties. Formalized partnership status. If the business is a separate for-profit activity, it usually requires a more formal partnership agreement or the creation of a joint venture. Such a formal partnership agreement may be based on the ITC model`s international joint venture agreement (the terms “shareholder,” “director” and “JVC” should be replaced by the terms “partner,” “managing partner” and “alliance.” Party contributions. In the itc model, Article 3 provides that any party with responsibilities can contribute to the success of the alliance.
In some cases, they are expressed in general – and do not contain a formal legal obligation (see examples of Articles 3.3.1, 3.2.1 and 3.3.2). In other cases, a specific legally binding obligation is appropriate. It is precisely in larger or complex alliances that it is customary to divide agreements: the alliance contract becomes an umbrella for neighbouring agreements (projects). Article 3 would relate to these agreements, which have a timetable. For example: Sewing needed. Each alliance or contractual cooperation is different, so the ITC Model international contract provides for a series or “menu” of possibilities depending on the purpose of the alliance. Of course, provisions that are not relevant to the alliance concerned should be removed. If, within the framework of the proposed cooperation, it is desirable to provide for another regime, that other configuration should be negotiated or adopted.
Finally, contract law facilitates the flexibility and autonomy of the parties to adapt their relationships.