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As your company continues to grow, you’ll need to employ more funds. These funds need not just be for long-term capital needs. They could be for working capital needs as well. But, there is a cost to using these funds. The ROI not only depends on the revenue generated through those funds but the terms on which the funds have been borrowed.
The moment you initiate conversations for borrowings, you need arrangements that protect all your interests. Since we are dealing with significant outflows over a super-long term, your expectations from the contract must be higher than the obligations of the agreement. You can’t leave drafting an agreement to vicissitudes. Ubiquity is necessary to understand what the other parties aim to get out of it.
Why Are Financial and Fund-related Agreements Important?
A Principle Business Cooperation Agreement refers to a formal business document that describes the basic terms and conditions of the arrangement between the parties, whether it may be group, entity, or individuals signed either as an exclusive business cooperation agreement or cooperation between multiple entities for the same project through sub-liaising.
Who Takes a Principles Business Co-operation Agreement?
Principles Business Cooperation Agreement is done between two parties who want to work towards a common business goal. In a business cooperation agreement between two companies, the parties involved may be individuals or groups.
The main purpose of this business agreements is to outline the understanding between the people involved in the agreement and also shows the desire and willingness of the parties to work towards the agreed goal in a co-operative manner.
Contents of the Agreement
The contents of a Principles Business Cooperation are;
- The names and address of the parties involved
- Date and duration of the agreement
- The goals, purpose, and objectives of the agreement
- The initial terms and conditions of the agreement
- Details of the responsibilities that have to be fulfilled by both the parties
- Details of promises and warranties
- The duration that the parties have to maintain the terms to correct any dispute
- Details of the ownership of the intellectual property created by each party
- Details of if any of the party can be excluded from their obligation which is beyond their control
- Details of clauses including assignment, non-disclosure, and arbitration
- Details on the undertakings by Party A and Party C which including details on the performance obligations, support, and supervision of Party ‘A’s performance.
- Confidentiality details wherein all confidential information shall not be disclosed by any party, in any manner to any third party. For this purpose, all parties shall adopt measures to confine any circulations of confidential information.
- Liability for Default which states that any breaching party shall pay compensation for any loss incurred toward the non-defaulting party, in writing.
- Force Majeure that elaborates on natural occurrences like fire, earthquake, and other acts of God. In case any of the party fails to perform any of its obligations under the influence of force majeure, no party will bear the liabilities.
- Applicable Laws and Settlement of Disputes, i.e in case of any disputes, either of the parties has the right to sue at a PRC court with competent jurisdiction thereover against the other party.
Benefits of the Agreement:
This arrangement is to describes the understanding between the parties involved in the agreement and helps to resolve the dispute, if any, that arises, in an amicable manner. Thus, this agreement is also known as Memorandum of Understanding and called a Cooperation Contract.
What Happens in Case of Violation?
In case of breach of the agreement, both the parties have the rights to sue each other in the court of law for the loss or damage suffered to them or business, and also, they can claim for the compensation of the losses suffered.