Many partnership discussions start with the signing of a non-disclosure agreement. These NDAs protect the confidentiality and intellectual property of all parties involved, as well as to legally cover the risks of exchanging information. It is rather heavy paperwork, full of caveats and clauses. In other words, not exactly something to instill trust at the very beginning of a partnership. However, if you look at this NDA as just a safety precaution and good business practice, it shouldn’t be a showstopper.
NDAs are meant to streamline cooperation. In the real world, they often cause complications even before the partnership has done so much as plan a first meeting. Legal departments of all partners are involved in drafting the NDA, which takes up a lot of time. In the best case you’re done in a few days, sometimes it takes a few weeks. This back-and-forth between lawyers stalls the process, killing the momentum. Moreover, the content itself is of ten cause for debate. Sometimes the formulation becomes an arm-wrestling contest between legal departments. As a result, more time is lost and partners find themselves clambering over their first hurdle before they’ve even chatted with, let alone dated their potential partner.
Actually, the problem starts with the name: ‘non-disclosure’. Most of the articles in such a contract focus on secrecy, what partners cannot do and what the consequences will be in case of a breach. We’d like to shift the focus to what partners can and want to do together. Most NDAs are long and contain a lot of legalese. That’s okay for lawyers talking to one another, but if you’re a small company or startup, you might not fully understand the wording and all the consequences that come with signing the paper.
In order to overcome these difficulties, we have tried to come up with an alternative to the classic NDA. It’s called a Trustful Partnership Agreement (TPA) and consists of a one-page document that tries to articulate the essential elements of a future collaboration in a clear and direct way. We’ve developed this conceptual TPA with Nicolas Decuypere and Christophe Janssens, two innovative law students and co-founders of Brussels Law School Consultancy vzw, a startup aiming to make law more accessible and useful to all.
We believe this TPA could help win speed, show your good intentions and act as a catalyst for a prosperous and trustful collaboration. Despite all these advantages, there is still an obstacle that could (unconsciously) withhold you from using a TPA in the future, namely the widely held belief that page-long contracts with rigid provisions and high indemnity clauses guarantee a better legal protection. Although such contracts can certainly be considered in situations involving many sensitive issues, they seem far less appropriate in a context of dynamic collaboration. One size does not fit all.
We believe in a lot of cases, a TPA similar to our concept below, will do the job to both protect your interest and kick-off a trustful relationship. As one size does not fit all, make sure to check with your lawyer whether the TPA you have prepared corresponds to your specific situation.
A word of warning, though: it is not advisable to use the TPA in the interaction with parties from common law countries. In most Western-European countries, the exchange of information and intellectual property is covered by the laws and used as a basis in court. In the US, everything that is not explicitly agreed, is allowed. However, in most cases, a TPA similar to the draft below will do the job to protect your interests and kick off a trustful relationship. Just make sure to check with your lawyer first.
TRUSTFUL PARTNERSHIP AGREEMENT (TPA)
BETWEEN
[Partner A], with address [address], and legally represented by [name]
AND
[Partner B], with address [address], and legally represented by [name]
Hereinafter referred to as “Partner” or as “Partners”.
IT IS NOW AGREED THAT
1. Creation of a trustful partnership
The Partners agree to the creation of a trustful partnership in which the Partners use their best endeavors and work together in a spirit of trust for the purpose of [contemplated activities].
2. Exchange of information
The Partners agree to keep all disclosed information strictly confidential and use this information for the sole purpose of the activities mentioned above. These obligations shall remain in effect for [period of time] from the termination of this agreement. The Partners agree to, immediately and at own cost and expense, return, destroy or delete any disclosed information upon the first request of a Partner, with the exception of documents necessary to comply with requirements imposed by law, regulation, court order or governmental order, or to support a claim or defense in litigation between the Partners.
The Partners agree that nothing in this agreement shall be construed as giving a Partner any license or any other right in, or with respect to, any disclosed information. Any intellectual property shall remain owned by the disclosing Partner.
3. Governing law and dispute resolution
This agreement and all non-contractual obligations that arise out of or in relation thereto shall be governed by Belgian law, to the exception of the conflict of law provisions thereof.
In case of failure to comply with the provisions in this agreement the Partners agree to inform each other as soon as the Partner becomes aware thereof. The Partners agree to immediately enter into negotiations with each other after this notice, in order to seek appropriate compensation for the damage suffered.
Any dispute regarding this agreement, including disputes relating to non-contractual obligations that arise out of or in relation thereto, shall be handled through mediation and any other alternative dispute resolution mechanism considered appropriate by the Partners. Only in the event that the aforementioned mechanisms do not provide sufficient remedy the Partners hereby irrevocably submit to the exclusive jurisdiction of the competent court in [location] to settle any such dispute arising hereunder.
This agreement is executed in [number] original copies. Each Partner declares to have received an original copy.
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Date: [date] |
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[signature] |
[signature] |
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[Partner A] |
[Partner B] |
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Represented by [name] |
Represented by [name] |