Product development agreements

Product development agreements address the issues and risks that arise when two companies work together to develop a new product or service.

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Matters that should be addressed in the agreement include:

Scope and objectives of the project and products to be produced
Obligations - including what each partner will contribute in terms of human resources, equipment and material, technology and know-how and any joint obligations
Day-to-day operations – consider forming a product development team to spearhead the project
Costs – including payment for development, responsibility for production, sales and marketing costs and how these will be recovered through the final selling price
Performance objectives
Intellectual property protection
Confidentiality
Exclusivity – either partner may seek undertakings that will protect them from competitors
Term of contract
Dispute resolution