Purpose
This article includes detailed descriptions and key elements for each of the contract types with downloadable templates in the LegalOn Template Library.
Included Contract Types
Consulting Services Agreement
Copyright Licensing Agreement
Distribution Agreement
Joint Research and Development Agreement
Manufacturing and Supply Agreement
Master Sale of Goods Agreement
Master Sales and Service Agreement
Master Services Agreement
Memorandum of Understanding
Non-Disclosure Agreement
Patent and Know-How Licensing Agreement
Patent Licensing Agreement
SaaS Terms of Service Agreement
Shareholders Agreement
Software Development Agreement
Software Licensing Agreement
Software Support Services Agreement
Stock Purchase Agreement
Trademark Licensing Agreement
Consulting Services Agreement
The Consulting Services Agreement is used when a business or individual hires a consultant (or contractor) to provide certain services. Key elements in this agreement include:
The reference to "Consultant" and "Customer" suggests that this is an agreement between a service provider and a client, which is typical in consulting services agreements.
The clause about "Services" denotes what the consultant will be providing to the customer, in this case, referenced in "Exhibit A." It is common in these types of agreements to clearly delineate the scope of work that the consultant will be performing.
The statements about the consultant determining the methods and details of work, and possibly engaging subcontractors, underscore the independence of the consultant, which is a fundamental aspect of consulting services agreements.
The clause about confidentiality and intellectual property indicates that any employees or subcontractors retained by the consultant should also be subject to these provisions, which are important in protecting the client's confidential information and intellectual property rights.
Lastly, the phrase about the consultant and the customer both being able to provide or seek the same or similar services elsewhere implies that this is a non-exclusive arrangement, another typical element in consulting services agreements.
Copyright Licensing Agreement
This type of agreement is utilized when a copyright holder, or "Licensor," grants another party, or "Licensee," the right to use their copyrighted works under specific terms and conditions. The "non-exclusive, royalty-bearing" aspects denote that the licensor is allowed to grant the same or similar rights to others, and the licensee is required to pay royalties for the use of the copyrighted works.
Distribution Agreement
This type of contract is used when a manufacturer or supplier of products (the "Supplier") wishes to engage a distributor (the "Distributor") to sell or distribute those products within a certain area (the "Territory").
The agreement details the rights and obligations of both the supplier and distributor, often including terms related to marketing, sale quotas, intellectual property, territory, duration, and termination.
In the case of the contract language provided here, the "non-exclusive" aspect suggests that the supplier may appoint other distributors in the same territory.
Joint Research and Development Agreement
This type of contract is used when two or more parties agree to collaborate for the purpose of conducting research and development in a particular field or for a specific project. These agreements define the roles and responsibilities of each party, how intellectual property rights will be handled, how the costs and benefits of the research will be shared, and how any resulting technology or products will be commercialized. The agreement will often address other legal considerations such as confidentiality, dispute resolution, termination, and governing law.
Manufacturing and Supply Agreement
This kind of contract is used when a business (the "Buyer") wishes to have certain products manufactured by another entity (the "Supplier"). Key elements in this contract include:
The "Purchase and Sale of Products" clause stipulates that the supplier will manufacture and supply certain products to the buyer, which is characteristic of a Manufacturing and Supply Agreement.
The "Supplier’s Duties" clause sets out certain obligations and restrictions for the supplier. The supplier agrees not to manufacture or supply the specified products to anyone other than the buyer or its subcontractors. The clause also prevents the supplier from manufacturing, selling, or marketing goods or products that compete with those being made for the buyer. This exclusivity is a common element in Manufacturing and Supply Agreements, although it is not present in every such agreement.
Master Sale of Goods Agreement
The Master Sale of Goods Agreement is used when a business or individual (the "Purchaser") wishes to buy certain products from another entity (the "Seller"). Key elements in this contract include:
The recitals provide background information about each party and their business activities, which helps to explain the purpose and context of the agreement.
The final recital signifies the basic intention of both parties, which is to engage in a transaction for the sale and purchase of goods.
This kind of agreement will often also include terms and conditions related to product specifications, pricing, payment terms, delivery and shipping, risk of loss, warranties, and dispute resolution, among other things.
Master Sales and Service Agreement
The Master Sales and Service Agreement is often used when one party (the "Seller") agrees to provide both products (in this case, hardware and software) and related services (like a software license) to another party (the "Purchaser").
Specifically, this agreement combines elements of a Sale of Goods Agreement (as the Seller agrees to sell hardware to the Purchaser) and a Licensing Agreement (as the Seller also agrees to license software to the Purchaser). Additionally, the agreement includes elements of a Distribution Agreement. This is indicated by the recital which states, "the Purchaser desires to distribute the Purchaser Products that incorporate the Seller Products...". The Purchaser is incorporating the Seller's products into its own for distribution, which would likely require specific permissions and obligations laid out in the contract.
As always, this type of contract will be highly dependent on the specifics of the business relationship and the products and services being exchanged.
Master Services Agreement
The Master Services Agreement (MSA) is used when a company (the "Company") wants to engage the services of another entity (the "Service Provider") for a prolonged period of time or for multiple projects.
An MSA establishes a general legal relationship between two parties and outlines the terms and conditions under which work will be performed. This could include things like payment terms, liability, intellectual property rights, confidentiality, dispute resolution methods, and more.
However, specific details about the services to be provided are typically addressed in separate documents often referred to as Statements of Work (SOWs), which are governed by the terms and conditions of the MSA.
Memorandum of Understanding
The Memorandum of Understanding (MOU) is often used to outline a mutual agreement between two or more parties before a formal contract is negotiated and signed. It often establishes a preliminary framework for potential business dealings or partnerships.
The "Potential Transaction" element suggests the parties are contemplating a particular business transaction or arrangement, the details of which are presumably laid out in the placeholder sections.
The "Exclusive Negotiation" clause suggests an exclusivity period during which the parties agree not to seek similar deals or arrangements with other parties. This is often used in situations where a party wishes to ensure the other's focus and resources are committed to the potential transaction, and it's not uncommon in potential merger or acquisition discussions.
An MOU is not usually legally binding in the way a formal contract would be (although certain elements could potentially be binding, such as confidentiality or exclusivity commitments).
Non-Disclosure Agreement
A Non-Disclosure Agreement (NDA), also known as a Confidentiality Agreement, is used when two or more parties wish to share confidential information with each other, usually for a specific purpose, and want to legally ensure that the information shared will not be disclosed to others or used improperly.
The "Purpose" is a key aspect of this type of agreement, as it specifies the reason for which the parties are sharing confidential information. The NDAs typically cover terms such as:
Definition of what is considered confidential information.
The obligations of the receiving party.
The duration for which the confidentiality obligation is to be maintained.
Exceptions to the confidentiality obligations.
Remedies in case of breach.
Patent and Know-How Licensing Agreement
The Patent and Know-How License Agreement is used when one party (the "Licensor"), who owns patents and know-how (i.e., specialized knowledge, skills, or expertise), wishes to give another party (the "Licensee") the right to use those patents and know-how, often in exchange for some form of compensation.
"Patents" typically refer to the legal rights granted by a government to an inventor to prevent others from making, using, selling, or importing an invention for a certain number of years.
"Know-How" generally refers to confidential or proprietary information or skills that have been developed by a company or individual over time and that provide some kind of business advantage.
This agreement usually includes terms and conditions covering aspects such as scope of the license, territory, exclusivity, duration, royalties, sub-licensing, obligations of the parties, infringement provisions, etc.
Patent Licensing Agreement
The Patent License Agreement is typically used when one party (the "Licensor"), who owns the rights to certain patents, wishes to grant another party (the "Licensee") the right to use, make, sell, or import the invention covered by the patents, often in exchange for royalty payments or other compensation.
In this case, the Licensor has developed technology related to a specific field (indicated by "[TYPE OF TECHNOLOGY]") and owns patents related to this technology. The Licensee is interested in obtaining an exclusive license to use these patents, probably to develop or sell products or services based on the patented technology.
The Patent License Agreement typically outlines the terms of the licensing arrangement, including the scope of the license, the territory in which the Licensee can use the patents, the duration of the agreement, the royalties or fees to be paid by the Licensee, and what happens in case of patent infringement.
SaaS Terms of Service Agreement
The SaaS Terms of Service Agreement is used when a service provider offers software services over the internet, rather than providing the customer with a physical copy of the software to install on their own servers or devices (on-premise).
The SaaS Terms of Service Agreement outlines the terms and conditions under which the customer can use the software, including payment terms, the level of service to be provided (often captured in a Service Level Agreement, or SLA, which may be attached as an exhibit), data privacy and security commitments, intellectual property rights, limitations of liability, termination provisions, etc.
The SaaS model is often used for business applications such as customer relationship management (CRM), human resources management (HRM), enterprise resource planning (ERP), and other software that businesses use in their day-to-day operations.
Shareholders Agreement
The Shareholders Agreement outlines the rights, privileges, protections, and obligations of the shareholders within a company.
Shareholders Agreements are commonly used in privately held corporations to establish rules for the sale and transfer of shares, protect minority shareholders, define how the company is governed, and set out how disputes will be resolved. These agreements often include provisions related to share valuation, restrictions on the sale or transfer of shares, "first right of refusal" provisions, "tag-along" and "drag-along" rights, and other terms that govern the relationship between the shareholders and the company.
Additionally, this specific agreement is for a "close corporation," which is a type of corporation that often has a smaller number of shareholders and more flexible management and governance structure. The agreement is references another document, a Subscription Agreement, that outlines the terms for the sale of the company's shares to the shareholders.
Software Development Agreement
The Software Development Agreement establishes the terms and conditions under which the software developer will design, develop, test, and possibly maintain a specific piece of software for the client. Key terms usually cover the scope of the project, timeline, deliverables, payment structure, intellectual property rights (i.e., who will own the software and related materials once developed), confidentiality, and liability issues, among others.
Software Licensing Agreement
The Software License Agreement is a type of contract entered into between a software developer or software owner/licensor (referred to here as "Licensor") and a user or entity wishing to use the software (referred to here as "Licensee").
It governs the use of the licensed software and stipulates the terms under which the licensor grants the licensee the right to use the software. This includes things such as the scope of the license (e.g., exclusive or non-exclusive, worldwide or limited to a certain territory, etc.), the duration of the agreement, the license fees, terms of use, limitations on use, warranties, indemnities, and other relevant terms.
Software Support Services Agreement
The Software Support Services Agreement is a type of contract usually between a customer and a service provider that offers software support services.
Under this agreement, the service provider is tasked with providing technical support and maintenance services for certain software owned or used by the customer. This typically includes troubleshooting, updates, and other maintenance tasks intended to ensure that the software is operating as expected.
The exact scope and nature of the services, as well as other details like payment terms, service level agreements (SLAs), and what happens in case of service failures or other issues, would typically be spelled out in the rest of the agreement. This kind of agreement is common in IT and software development industries.
Stock Purchase Agreement
The Stock Purchase Agreement is a type of contract used when shares of stock in a company are being bought and sold between a buyer (Purchaser) and a seller (Seller). The Stock Purchase Agreement outlines the terms and conditions of the transaction, including the number of shares being bought/sold, the purchase price, representations and warranties, indemnities, closing conditions, and more.
In this case, all of the issued and outstanding capital stock of the target company are being sold to the Purchaser. This implies that this transaction would result in a complete change in ownership of the target company.
Trademark Licensing Agreement
The Trademark Licensing Agreement is used when a trademark owner (the "Licensor") grants another party (the "Licensee") the right to use the licensor's trademark in accordance with specific terms and conditions.
The terms usually outline the manner in which the trademark may be used, the geographical territory where it can be used, and any royalties or license fees due to the trademark owner. It can also detail what specific products or services the trademark may be used in connection with, and the duration of the agreement.
In this case, the licensee wishes to use the licensor's trademark(s) in connection with certain products within a specific territory.