This research and development agreement is between
The Client wishes to sponsor research and development activities under the direction of the Developer.
The Developer wishes to conduct research and development activities, and grant certain rights to the Client as set forth in this agreement.
The parties therefore agree as follows:
1. RESPONSIBILITIES.
- (a) Of the Developer. The Developer shall:
- (i) perform the research and development services set forth in Exhibit A (collectively, the "Services"). If there is a conflict between this agreement and Exhibit A, the terms of this agreement will control;
- (ii) devote as much productive time, energy, and ability to the performance of its duties under this agreement as may be necessary to provide the Services in a timely and productive manner;
- (iii) perform the Services in a safe, good, and workmanlike manner
by fully-trained, skilled, competent, and experienced personnel using at all times adequate equipment in good working order; - (iv) fully disclose any and all circumstances that currently exist or that could arise during the Term that could be (or cause) a conflict of interest between the respective interests of the Client and the Developer;
- (v) communicate with the Client regarding its performance of the Services;
and - (vi) provide services (including the Services) that are satisfactory and acceptable to the Client
; and . (vii) .
- (b) Of the Client. The Client shall:
- (i) engage the Developer as an independent contractor to perform the Services set forth in Exhibit A;
- (ii) provide relevant information and documents to assist the Developer with the performance of the Services;
and - (iii) satisfy all of the Developer's reasonable requests for assistance in its performance of the Services
; and . (iv) .
2. TERM AND TERMINATION.
- (a) Term. This agreement will become effective as described in section
27 26 26 26 25 25 25 24 . Unless it is terminated earlier in accordance with subsection (a), this agreement will continue until the Services have been satisfactorily completed and the Developer has been paid in full for those Services (the "Term").However, this agreement may not remain effective for more than year(s). - (b) Termination. This agreement may be terminated:
- (i) by either party on provision of
days' written notice to the other party; - (ii) by either party for a material breach of any provision of this agreement by the other party, if the other party's material breach is not cured within
days of receipt of written notice of the breach; or - (iii) by the Client at any time and without prior notice, if the Developer is convicted of any crime or offense, fails or refuses to comply with the written policies or reasonable directives of the Client, or is guilty of serious misconduct in connection with performance under this agreement
. ; or (iv) automatically, on the death of the Developer.
- (i) by either party on provision of
- (c) Effect of Termination. After the termination of this agreement for any reason, the Client shall promptly pay the Developer for Services rendered before the effective date of the termination.
3. NATURE OF RELATIONSHIP; INVENTIONS.
- (a) Independent Contractor Status. The relationship of the parties under this agreement is one of independent contractors, and no joint venture, partnership, agency, employer-employee, or similar relationship is created in or by this agreement. Neither party may assume or create obligations on the other party's behalf, and neither party may take any action that creates the appearance of such authority. The Developer has the sole right to control and direct the means, details, manner, and method by which the Services will be performed, and the right to perform the Services at any time, place, or location. The Developer or the Developer's staff shall perform the Services, and the Client is not required to hire, supervise, or pay any assistants to help the Developer perform those Services. The Developer shall provide insurance coverage for itself and its staff.
- (b) Inventions Retained and Licensed. Attached as Exhibit B to this agreement is a list of all intellectual property that the Developer made before its agreement with the Client (the "Prior Inventions") that belong to the Developer, that relate to the Client's proposed business, products, or research and development, and that are not assigned to the Client under this agreement. If no list is attached, the Developer represents that there are no Prior Inventions. If disclosure of a Prior Invention would cause the Developer to violate an existing confidentiality agreement, the Developer may not list the Prior Invention in Exhibit B but shall instead provide the name of the invention, a list of the party or parties to which it belongs, and an explanation of why full disclosure was not given. A space is provided in Exhibit B for this purpose. If in the course providing services to the Client the Developer incorporates into a Client product, process, or machine a Prior Invention owned by the Developer or in which the Developer has an interest, the Client will be granted and have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use, and sell that Prior Invention as part of or in connection with that product, process, or machine.
- (c) Client Inventions. The Developer has no right or interest in any work or product resulting from the Services the Developer performs for the Client, or any of the documents, reports, or other materials the Developer creates in connection with those Services (collectively, the "Client Inventions"), and has no right to or interest in any copyright to the Client Inventions. The Client Inventions have been specially commissioned or ordered by the Client as "works made-for-hire," as that term is defined in the United States Copyright Act, and the Client is therefore the author and owner of all copyrights in the Client Inventions.
- (d) Disclosure of Client Inventions. The Developer shall promptly disclose in writing to the Client all Client Inventions that the Developer has authored, made, conceived, or first actually reduced to practice, alone or jointly with others.
- (e) Assignment of Client Inventions. If the Client Inventions or any parts of those are deemed not to have been works made-for-hire, the Developer hereby assigns to the Client all interest the Developer may have in the Client Inventions, including all copyrights, publishing rights, rights to use, reproduce, and otherwise exploit the Client Inventions in all formats or media and all channels, whether now known or created in the future.
- (f) Patent and Copyright Registrations. The Developer shall assist the Client or its designee, at the Client's expense, to secure the Client's rights in the Client Inventions and any copyrights, patents, mask work rights, or other intellectual property rights relating to the Client Inventions in all countries, including by disclosing to the Client all pertinent information and data with respect to those, by signing all applications, specifications, oaths, assignments, and other instruments that the Client deems necessary to apply for and obtain such rights and to assign and convey to the Client, its successors, assigns, and nominees the exclusive interest in the Client Inventions, and any copyrights, patents, mask work rights, or other intellectual property rights relating to those. When it is in the Developer's power to do so, the Developer shall sign or cause to be signed these instruments or papers after the termination or expiration of this agreement. If the Developer provides assistance after the termination or expiration of this agreement at the Client's request, the Client shall pay the Developer a reasonable rate for any time spent. If
because of the Developer's mental or physical incapacity or for anyother reason the Client cannot secure a signature to apply for or pursue any application of any United States or foreign patents or copyright registrations covering Client Inventions or original works of authorship assigned to the Client, the Developer hereby irrevocably designates and appoints the Client and its duly authorized officers and agents as the Developer's agents and attorneys in fact, to act for and on behalf of the Developer to sign and file any those applications and to do all other lawfully permitted acts to further the prosecution and issuance of patent or copyright registrations with the same legal force and effect as if they had been signed by the Developer.
4. COMPENSATION.
- (a) Development Fee. In exchange for the Services provided by the Developer under this agreement, the Client shall pay the Developer a development fee of
payable in weekly biweekly monthly installments. The Developer may retain all of the sums paid to it by the Client. - (b) Additional Support. The Client may provide in-kind support to the Developer in support of the Services as needs arise. Title to equipment contributed by the Client as in-kind support will be in the name of the
client developer . - (c) No Payments in Certain Circumstances. No payment will be payable to the Developer under any of the following circumstances:
- (i) if prohibited under applicable government law, regulation, or policy;
- (ii) if the Developer did not directly perform or complete the Services described in Exhibit A;
- (iii) if the Developer did not perform the Services to the reasonable satisfaction of the Client; or
- (iv) if the Services performed occurred after the expiration or termination of the Term, unless otherwise agreed in writing.
(d) Royalties. In addition to the payment mentioned above, the Client shall pay to the Developer royalties in the amount of on each % of all sales or license s of any product or of items containing the product made by or for the Client. - (e) Expenses. Any ordinary and necessary expenses incurred by the Developer or its staff in the performance of this agreement will be the
Client's Developer's responsibility. - (f) Taxes. The Developer is solely responsible for the payment of all income, social security, employment-related, or other taxes incurred as a result of the performance of the Services by the Developer under this agreement, and for all obligations, reports, and timely notifications relating to those taxes. The Client has no obligation to pay or withhold any sums for those taxes.
- (g) Other Benefits. The Developer has no claim against the Client under this agreement or otherwise for vacation pay, sick leave, retirement benefits, social security, worker's compensation, health or disability benefits, unemployment insurance benefits, or employee benefits.
5. NO ASSURANCE OF RESULTS.
The Developer does not guarantee the results of the Services to be performed (including their nature or economic or commercial value or utility) or the quality of any product developed under this agreement. The Developer shall provide the Services and develop products on a best efforts basis. The risks of these Services and the products will be those of the Client. Whether or not the research is successful or accomplishes the results contemplated by this agreement, the Client shall remain obligated to pay to the Developer all sums set forth in this agreement. However, the Client's legal or equitable remedies will not be limited if the Developer does not satisfy its obligations under this agreement.
7. INSURANCE COVERAGE.
Within
- (a) be issued by an insurance company satisfactory to the Client in the reasonable exercise of its discretion;
- (b) name the Client as an additional insured (including as an insured with respect to third-party claims or actions made or brought directly against the Developer or against the parties as co-defendants in connection with the Developer's activities under this agreement);
- (c) contain a provision that the Client, although named an insured, shall nonetheless be entitled to recovery for any loss suffered by the Client as a result of the Developer's negligence;
- (d) be written as a primary policy not contributing with any other coverage that the Client may carry; and
- (e) stipulate that the Client shall receive 30 days' prior written notice of any impending cancellation of the policy.
8. REPORTING.
The Developer shall report to
9. NO CONFLICT OF INTEREST; OTHER ACTIVITIES.
The Developer hereby warrants to the Client that, to the best of its knowledge, it is not currently obliged under any existing contract or other duty that conflicts with or is inconsistent with this agreement. During the Term, the Developer may engage in other development activities. However, the Developer may not accept work, enter into contracts, or accept obligations inconsistent or incompatible with the Developer's obligations or the scope of Services to be rendered for the Client under this agreement.
11. RETURN OF PROPERTY.
Within
13. CONFIDENTIAL INFORMATION.
During the Term and for a period of
14. DEFAULT AND REMEDIES.
If either party terminates this agreement because of the other party's default, in addition to all rights it has under this agreement, the nonbreaching party shall have the right to exercise any and all remedies available at law or in equity. All rights and remedies are cumulative and the election of one remedy shall not preclude another. Any termination shall be without prejudice to accrued rights. Specifically, a termination due to default of delivery or payment for products created under this agreement shall not affect or terminate the rights and obligations of the parties that have accrued prior to the default in delivery or payment. Despite the expiration or termination of this agreement, the obligations intended to survive termination or expiration of this agreement shall continue in full force and effect.
15. LIMITATION OF LIABILITY.
Notwithstanding anything to the contrary in this agreement, in no event will either party be liable for any indirect, punitive, special, incidental, or consequential damages in connection with or related to this agreement (including loss of profits, use, data, or other economic advantage). This section shall not apply if the breach is caused by a party's willful or reckless actions.
16. INDEMNIFICATION.
- (a) Of Client by Developer. The Developer shall indemnify the Client and its officers, members, managers, employees, agents, contractors, sublicensees, affiliates, subsidiaries, successors, and assigns against all damages, liabilities, costs, expenses, claims, or judgments, including reasonable attorneys' fees and disbursements (collectively, the "Claims") that any of them may incur and that arise from
- (i) any gross negligence or willful misconduct of the Developer arising from the Developer's carrying out of its duties under this agreement; or
- (ii) the Developer's breach of any of its obligations under this agreement.
- (b) Of Developer by Client. The Client shall indemnify the Developer against all Claims that it may incur and that arise from
- (i) the Client's operation of its business;
- (ii) the Client's breach or alleged breach of, or its failure or alleged failure to perform under, any agreement to which it is a party; or
- (iii) the Client's breach of any of its obligations under this agreement, if none of these result from the actions or inactions of the Developer.
17. FORCE MAJEURE.
A party will not be considered in breach of or in default because of, and will not be liable to the other party for, any delay or failure to perform its obligations under this agreement by reason of fire, earthquake, flood, explosion, strike, riot, war, terrorism, or similar event beyond that party's reasonable control (each a "Force Majeure Event"). However, if a Force Majeure Event occurs, the affected party shall, as soon as practicable:
- (a) notify the other party of the Force Majeure Event and its impact on performance under this agreement; and
- (b) use reasonable efforts to resolve any issues resulting from the Force Majeure Event and perform its obligations under this agreement.
18. GOVERNING LAW.
- (a) Choice of Law. The laws of the state of
govern this agreement (without giving effect to its conflicts of law principles). - (b) Choice of Forum. Both parties consent to the personal jurisdiction of the state and federal courts in
County, .
19. AMENDMENTS.
No amendment to this agreement will be effective unless it is in writing and signed by both parties.
20. ASSIGNMENT AND DELEGATION.
- (a) No Assignment. Neither party may assign any of its rights under this agreement, except with the prior written consent of the other party. All voluntary assignments of rights are limited by this subsection.
- (b) No Delegation. Neither party may delegate any performance under this agreement, except with the prior written consent of the other party.
- (c) Enforceability of an Assignment or Delegation. If a purported assignment or purported delegation is made in violation of this section, it is void.
21. COUNTERPARTS; ELECTRONIC SIGNATURES.
- (a) Counterparts. The parties may execute this agreement in any number of counterparts, each of which is an original but all of which constitute one and the same instrument.
- (b) Electronic Signatures. This agreement, agreements ancillary to this agreement, and related documents entered into in connection with this agreement are signed when a party's signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated in all respects as having the same force and effect as original signatures.
22. SEVERABILITY.
If any one or more of the provisions contained in this agreement is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this agreement, but this agreement will be construed as if those invalid, illegal, or unenforceable provisions had never been contained in it, unless the deletion of those provisions would result in such a material change so as to cause completion of the transactions contemplated by this agreement to be unreasonable.
23. NOTICES.
- (a) Writing; Permitted Delivery Methods. Each party giving or making any notice, request, demand, or other communication required or permitted by this agreement shall give that notice in writing and use one of the following types of delivery, each of which is a writing for purposes of this agreement: personal delivery, mail (registered or certified mail, postage prepaid, return-receipt requested), nationally recognized overnight courier (fees prepaid), facsimile, or email.
- (b) Addresses. A party shall address notices under this section to a party at the following addresses:If to the Client:
- If to the Client:
, - If to the Developer:
, - (c) Effectiveness. A notice is effective only if the party giving notice complies with subsections (a) and (b) and if the recipient receives the notice.
24. WAIVER.
No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this agreement will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies.
25. ENTIRE AGREEMENT.
This agreement constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties' agreement about the subject matter of this agreement. All prior and contemporaneous communications, negotiations, and agreements between the parties relating to the subject matter of this agreement are expressly merged into and superseded by this agreement. The provisions of this agreement may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this agreement by, and neither party is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this agreement. Except as set forth expressly in this agreement, there are no conditions precedent to this agreement's effectiveness.
26. HEADINGS.
The descriptive headings of the sections and subsections of this agreement are for convenience only, and do not affect this agreement's construction or interpretation.
27. EFFECTIVENESS.
This agreement will become effective when all parties have signed it. The date this agreement is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the date of this agreement.
28. NECESSARY ACTS; FURTHER ASSURANCES.
Each party shall use all reasonable efforts to take, or cause to be taken, all actions necessary or desirable to consummate and make effective the transactions this agreement contemplates or to evidence or carry out the intent and purposes of this agreement.
[SIGNATURE PAGE FOLLOWS]
Each party is signing this agreement on the date stated opposite that party's signature.
| DDDDDDDDDDDDDDDDDDDDDDD | ||
|---|---|---|
| Date: ______________________________ | By: ____________________________________________________________ Name: |
|
| Date: ______________________________ | By: ____________________________________________________________ Name: |
[PAGE BREAK HERE]
EXHIBIT A
STATEMENT OF WORK
(Attach statement of work)
[PAGE BREAK HERE]
EXHIBIT B
LIST OF PRIOR INVENTIONS AND ORIGINAL WORKS OF AUTHORSHIP
- 1. Except as listed in section 2 below, the following is a complete list of all Prior Inventions that were made, conceived, or first reduced to practice by the Developer, alone or jointly with others, before its agreement with the Client:
| add border dddddddddddddddddd |
ddddddd | |
|---|---|---|
| Title | Date | Identifying Number or Brief Description |
| The Developer has no inventions or improvements to list. | ______________ (Initials) |
|||||||
| I have attached _______ additional sheets to this Exhibit B. | ______________ (Initials) |
- 2. Because of an existing confidentiality agreement and the duties of confidentiality that the Developer owes to the parties listed below, the Developer cannot complete the disclosure in section 1 above with respect to the inventions or improvements listed generally below:
| add border ddddddddddddddddddDDDDDDDDDDD |
dddddddDDDDDDDDDDDDD | DDDDDDDDDDDDDDDD |
|---|---|---|
| Invention or Improvement | Party Names | Relationship |
| I have attached _______ additional sheets to this Exhibit B. | ______________ (Initials) |
| Date: ______________________________ | |
| By: ____________________________________________________________ Name: |
How-to guides, articles, and any other content appearing on this page are for informational purposes only, do not constitute legal advice, and are no substitute for the advice of an attorney.
Research and development agreement: How-to guide
Businesses thrive on innovative ideas and their execution into real-life projects. Many companies and individuals develop new product ideas but lack the expertise (technical know-how) or facilities to perform research and develop those products themselves. Businesses may need to partner with a research and development company or specialist to bring their ideas to life and transform them into end products properly.
What are the benefits of partnering with a research and development company or specialist?
Partnering with a research and development specialist can give a company access to technical expertise, facilities, and other resources to bring their product ideas to life. It can also help them save time and money by avoiding building their own R&D capabilities from scratch. Additionally, partnering with experts in the field can provide businesses with valuable insights and guidance, which can help them make informed decisions and increase their chances of success.
What are the essential elements for successful product development?
There are several essential elements for successful product development. These include:
- Market research to identify consumer needs and preferences
- Establishing clear goals and objectives for the product
- Creating a realistic timeline and budget
- Assembling a skilled and diverse team
- Continuously testing and iterating the product
Having these elements can assure you that your money is well spent and your investments yield fruitful results.
What are the different types of research and development agreements?
Organizations can use several research and development (R&D) agreements to formalize their R&D collaborations. Some of the common types of R&D agreements include:
- Clinical Research Agreement (CRA)
- Collaboration Agreement
- Cooperative Agreement
- Cooperative Research and Development Agreement (CRADA)
What are Cooperative Research and Development Agreements?
A Cooperative Research and Development Agreement (CRADA) is an arrangement that enables collaboration between federal laboratories and non-federal entities for research and development (R&D) purposes. Both parties involved in a Cooperative Research and Development Agreement (CRADA) can provide personnel, facilities, equipment, and other resources and materials for the development of scientific and technological knowledge into marketable products.
However, it's important to note that the government doesn't provide funds to non-federal entities under a Cooperative Research and Development Agreement. The federal laboratories can provide personnel, services, facilities, equipment, intellectual property, and other resources. The non-federal parties may manage the funding requirements, personnel, facilities, equipment, intellectual property, or other services and resources necessary to conduct specified research.
Importance of research and development agreements
A well-crafted agreement can allow both sides to benefit from a successful product. However, despite good intentions, things may sometimes go differently than planned in any business relationship. Therefore, having the safeguards and protections of a written agreement is essential.
What are the key aspects to consider for a research and development agreement?
Conducting a risk assessment
Performing a risk assessment is a crucial initial step in product development. Understanding the target market and assessing the feasibility of the final product is indispensable. At every stage of development, it is necessary to review the risks involved and determine whether it is beneficial for your company to continue the work.
Accessing the requirement for royalty payments
Royalties are payments made to developers for future sales or product licenses. These payments may be included in the compensation of a research and development agreement, but they will only be triggered once the product starts selling as anticipated by the company. While not mandatory, royalties can be used as an additional incentive to encourage the developer to provide the best possible services. By doing so, the company can keep its initial investment low. However, any agreement to pay royalties should be drafted cautiously, considering the product's potential successes and the risk of failure.
Establishing a budget and clarifying funding sources
It is crucial to consider the funding for research and development and the sources to cover the expenses. To ensure clarity between the parties, setting up a budget and determining the amount you plan to spend on the project is recommended. All parties involved should make these crucial decisions before signing the agreement to ensure everyone is on the same page.
Creating non-disclosure clauses
Non-disclosure clauses play a crucial role in any research and development agreement. When a developer works with a company, they often need to know certain confidential information about the company’s technology and market requirements. A developer may also reveal their confidential information in their development work. Creating a separate non-disclosure agreement to protect everyone involved is advisable if the data exchanged is particularly sensitive.
Reviewing laws and regulations
Review all federal, state, and local laws or regulations that might affect the research and development process.
Explicitly outlining the terms and expectations
Both parties involved in the deal should thoroughly review it to ensure all critical points are included. Gathering more information is always a great idea, as it can help you make more informed decisions and achieve better results. It is always a good practice to be explicit about the expectations and terms in a document. It helps avoid misunderstandings and ensures all parties are on the same page.
Signing the agreement
It is advisable to sign at least two copies of the agreement, with one copy for you and the other for the other party.
Notarizing agreements to ensure validity
Getting your agreement notarized ensures all parties' signatures are legally binding, preventing potential disputes and providing peace of mind.
Contacting an attorney
If your agreement contains intricate terms or substantial risks, seek the guidance of an attorney to draft a contract that fulfills your specific needs.
Understanding the clauses of the research and development agreement
The following provisions will guide you through each section of the agreement to help you better understand the process.
Introduction of parties
Here, the document is identified as a research and development agreement. It is essential to mention the date on which it becomes effective, usually when it is signed. In this agreement, the client requests the research, and the developer agrees to perform the development tasks.
Recitals
The "whereas" clauses, also referred to as recitals, play a significant role in providing background information about the parties involved in the agreement and defining its context. Within this section of the agreement, the recitals specify that the client has a product they want to develop, and the developer has the necessary skills and interests to assist in its development.
Project development requirements
This confirms that the developer and client have agreed to develop a product. The developer will research and develop the product per the established goals and specifications mentioned in the statement of work. It is essential to list the product requirements clearly to ensure clarity in the development processes. Additionally, a draft budget should be included to provide a clear understanding of the project's financial aspect.
Responsibilities
This section outlines the responsibilities of both parties involved in the agreement like,
- The developer is responsible for providing the agreed-upon services.
- The client is responsible for providing the necessary information and guidance to assist the developer.
Nature of relationship
This section explains that the developer is not an employee or partner of the client. It is essential for legal reasons, including insurance coverage requirements, liability, and taxes. Both parties should adhere to the roles and responsibilities of the independent contractors and employees. Reviewing your state's laws governing independent contractors to ensure the enclosed agreement follows local restrictions is a good idea.
Term
This option allows you to specify the length of the agreement's initial term (first term). It specifies that the contract will renew automatically unless one of the parties takes action to terminate it.
The initial term of a contract can sometimes be renewed for a different period if all parties agree to it. If you need to terminate an agreement, one of the parties must give advance notice and specify the number of days of notice required. It helps ensure a smooth and fair end to the agreement.
Representations and warranties
This section outlines the promises made by each party in the agreement. It specifies the authorized commitments for both parties. The client agrees to pay the amounts they owe to the developer, while the developer promises to provide the services and create the product as agreed upon.
Compensation
This section outlines the developer's reimbursement, including the no-pay clause and royalties. It also establishes the developer's responsibility for internal expenses and taxes.
Payment terms and frequency: This section outlines the payment terms for the developer's services under the agreement. It emphasizes that the payments outlined are the only compensation a developer will get for its services. The fee can be a yearly sum but can be paid in installments based on mutual understanding. The developer may specify the frequency at which they would like to receive the payments (e.g., weekly, bi-weekly).
No payments: This section lists the circumstances under which the client will not make payments.
Royalties: This is an optional subsection that mentions the client will pay the developer a percentage of every sale (i.e., royalties). A client can make the royalties a flat fee or a percentage of sales.
Internal expenses: The developer is responsible for their internal expenses as the client and developer are separate entities, not in an employer-employee relationship. However, if the developer incurs expenses while performing services for the client, the client will reimburse those expenses provided sufficient evidence of the expenses is provided.
Taxes: This defines the tax responsibilities and indicates that the developer is responsible for paying its taxes on the money it receives (i.e., it is not receiving a "salary" as an employee of the client, and the client will not withhold those amounts on its behalf).
No assurance of results
This section outlines that the developer's work is not guaranteed to produce a specific outcome, but they are required to put in their best efforts.
The client must continue paying the developer for their work, even if no helpful product emerges. However, if the developer breaches the agreement, the client can terminate the contract and pursue damages. It clarifies that while a developer agrees to work for a client, they can’t guarantee a specific outcome. However, an optional provision requires developers to put their "best efforts" into their work. The client must continue paying the developer for their work, even if the result could be more helpful. However, if the developer fails to meet their obligations (such as not working towards creating the product), the client is entitled to terminate the agreement and seek damages.
Timing and delays
This optional provision emphasizes the importance of promptly completing work under the agreement and noting the consequences of failing to meet deadlines.
Insurance coverage
The agreement requires the developer to have an insurance policy covering the product's research and development during the contract period. The developer must provide proof of this insurance within a specified number of days after the effective date. Generally, most insurance policies cover personal injury, property damage, product liability, and worker's compensation.
Reporting
This option requires the developer to submit regular reports on their services. The client can assign a contact person who will receive these reports on their behalf. It is advisable to mention the frequency and type of data included in these reports.
Work for hire
In this section, the developer grants the client ownership of all work they create under the agreement, including the completed product and material produced during its creation. In addition, if the developer owns the product or any material, the developer promises to give the client this ownership interest.
No conflict of interest; other activities
The developer promises not to work with other companies or products that compete with the client. This section doesn’t completely restrict the developer's other business activities: the developer can still perform tasks for other companies as long as they don't damage the company or its interests.
Non-competition
The agreement may include a clause restricting the developer from entering any business that competes with the client during the contract term and for a specific period after its termination. However, this clause is subject to state guidelines. It is also important to note that non-competition clauses may not be enforceable for certain professions. The agreement should specify the duration of this non-competition restriction and the geographical area it covers (for example, within 50 miles of the client).
Property return and ownership clause
This section states that the developer must return the property to the client at the end of the agreement. Any documents or property provided to the developer under this deal remain the client's property.
Publications
This section states that either party can only publish any information about the research and development conducted under the agreement if the other party consents.
Confidential information
This section defines confidential information within the context of an agreement. It also outlines how the developer is expected to handle this information and specifies the years during which they must maintain confidentiality.
Termination
This section outlines the circumstances, including written notice and material breach, under which the parties can terminate the agreement before the end of its term. It also clarifies the payment terms and return of intellectual property after the termination.
Notice requirements: It states that either party can end the agreement by providing written notice.
Breach of obligations: The other party can terminate the agreement if one party breaches its obligations and fails to remedy this breach.
Payment of services completed before the termination: This states that the client is liable to pay the developer for services completed before the termination of the agreement.
Returning intellectual property: The developer must return the client's intellectual property to them within a specific timeframe.
Default and remedies
This section outlines the fulfillment of obligations and the consequences if either party fails to perform their duties. If one party fails to fulfill their obligations under this agreement, the other party has the right to take action, such as terminating the agreement or seeking any other appropriate remedy.
Limitation of liability
This clause restricts the damages a party has to pay for the losses incurred by the other party (for example, accidental damage). In simpler words, if one party damages equipment belonging to the other party worth $1,000, that party will be liable to pay only $1,000 to that party.
Indemnification
This section outlines who will be responsible for covering any financial losses that either party may experience. This is a positive step towards ensuring that both parties are protected and can work together confidently. It's crucial to reach a mutual agreement on the amount and timing of indemnity coverage sought.
Successors and assigns
This section stipulates that the parties' rights and obligations will be transferred to successor organizations or organizations to which rights and obligations have been legally assigned.
Modification
This section states that any modifications to the document are valid only if they are in writing and signed by both parties.
Assignment
This section clarifies that both parties must receive written permission from the other party before assigning their obligations and interests.
Force majeure
A "force majeure" clause prevents either party from fulfilling an obligation under an agreement if an unusual event beyond their control prevents them. The parties can specify such events (for example, fires, wars, or strikes) and include them in the clause. If a force majeure event occurs and one party can't fulfill its obligation under the agreement, it must provide written notice to the other party as soon as possible. The party should also notify the other party when the situation is resolved and work swiftly to meet their obligations. This clause can provide valuable protection in unforeseen scenarios.
No implied waiver
This section states that if one party permits the other to overlook an obligation under the agreement, it doesn't waive the other party's future rights to fulfill those or any other obligations.
Arbitration
An optional clause that allows the parties involved to resolve any disputes through arbitration instead of going to court. Before including such clauses, it's recommended to consider any local limitations or restrictions that may apply to your industry and area. This will help you understand the arbitration process better.
Notice
This section specifies the mailing addresses for official or legal correspondence from either party. Provide the mailing address for both the client and the developer.
Governing law
The developer may work in one state and the client in another. The agreement may be subject to the laws of a specific state chosen by the parties, even if they work in different states. A governing law provision allows the parties to choose the state laws used to interpret the agreement.
Counterparts; electronic signatures
This clause stipulates that even if the parties sign the agreement in different locations or transmit signatures using electronic devices such as computers or fax machines, all the separate pieces will be considered a single agreement. This provision is highly advantageous in today's fast-paced world, where signing parties are often situated in different cities. It guarantees efficient business operations without compromising the validity of the agreement.
Severability
This protects the terms of the agreement as a whole, even if one part is later invalidated. For example, if a state law prohibits arbitration clauses, it will not undo the deal. Only the section of the agreement regarding arbitration would be nullified, while the rest remains enforceable.
Entire agreement
This section confirms the parties' agreement that the document they're signing is "the agreement" about the issues involved. This provision won't prevent a party from arguing that other enforceable promises exist but can protect them from these claims.
Affirmation of the parties
This mentions that the parties have voluntarily entered into the agreement without relying on any promises outside the agreement and clearly understand its contents.
Headings
This section clarifies that the section "headings" are for organizing the document and are not operational parts of the research and development agreement.
A comprehensive template for research and development agreement
The template attached to this page is designed to provide you with the guidelines required to customize a comprehensive research and development agreement. It lays the foundation for building a new product without having to draft the agreement from scratch. It covers crucial aspects of a research and development document. Whether working on a new invention, developing a new product or service, or researching a particular field, this template can save you time and effort.
Frequently asked questions
What's a research and development agreement?
To stay competitive in the market, it is imperative to keep developing new product ideas. However, only some have the resources or expertise to do this independently. Therefore, partnering with experts at a research and development company can be a great solution. A research and development agreement ensures that both parties involved are clear on the parameters of the deal.
What information is needed to complete a research and development agreement?
Here's the information to complete the research and development agreement:
- Details of the client: Ensure that you have the name and contact information of the person ready and available
- Details of the developer: All the necessary information about the developer is crucial
- Expected responsibilities: The responsibilities of the client and developer must be precisely clear to them in terms of their duties and tasks
Free Research and Development Agreement Template
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