Traditionally, we think of a contract as the go-to legal document when a dispute arises between collaborators.

Yet, another way to view a contract is as a "process," one that guides collaborators through important conversations that explore shared goals, roles, duties, and even limitations. Think of a contract as a blueprint for the relationship and the legal terms are the subjects to explore together.

Openly talking about these topics will help you:

  • Decide if the collaboration makes sense;

  • Conceptualize the nuts and bolts of the collaboration; and

  • Clarify expectations.

So what exactly should you talk about?

Here are 4 essential contract topics that collaborators should openly discuss and define before joining forces.


It's so common for people to start a new relationship without thinking about what they want out of it! We've all heard the saying, "If I only knew then, what I know now, I'd have never . . ." While hindsight is always the perfect 20/20 vision, defining the collaboration's goal will help to lessen the risk of embarking blindly on this new venture.

What exactly is the collaboration's goal? Are you planning to:

  • Build a new product or service for a fee?

  • Create a course together?

  • Hold a joint event to sell products?

  • Sell one collaborator's products through the other's website or sales channels?

Having this discussion will anchor the collaboration by revealing if you both have the same intended outcome for the relationship. This is deemed mutuality in a contract.

After the goal is identified, go the extra measure and refine it into a SMART goal for further clarity. Voila! You've just defined the purpose, term, and even the overall benefits to be exchanged under the contract.


To accomplish the SMART goal, action needs to occur. You'll need to sit down (we recommend over tea) and discuss how you'll work together:

  • What roles do you each want to play?

  • What role do you each NOT want to play?

  • What expertise will you each provide?

  • What action will you each undertake?

  • When will these roles be played or the action occur?

  • What limitations do you each have in performing the role or taking action?

Mapping out the roles and actions will help you conceptualize the services, duties, and obligations that each collaborator will owe under the contract. You'll want to do take the time to do this for 2 reasons.

First, it will sketch out the actual work involved and how each collaborator will perform or contribute. This knowledge will help to decide if collaborator's expertise, time, resources, and commitment match up, and ultimately if the collaboration should proceed.

Second, this awareness may help to prevent failure. So many collaborations fail because of the lack of understanding about the amount of work required or the perception that one collaborator fails to contribute. The truth of the matter is that 90% of the time, collaborators never set realistic expectations from the beginning. The end result is a failed relationship, disappointment, and there may even be a legal dispute.


Creativity is the best part of collaboration! In fact, most collaborations start with the design stage and before you know it, a new product or service is created. The creation is the intellectual property. The million dollar question is: Who owns it?

Answering this question after the collaboration has split up is so much harder and much more expensive for each collaborator. The smarter practice is to address the question of ownership before the creative process starts!

Ownership can be defined creatively too. Perhaps the creation will be jointly and equally owned. Or perhaps it will be 100% owned by one of the collaborators in exchange for compensation paid to the other. In either case, the owner will have the sole legal right to decide how the creation is used and receive all compensation generated by it.

Hence, it's critical that you decide together:

  • Who owns the creation?

  • How will the creation be used?

  • Who will receive the compensation generated by the creation?

  • Will the creation be used to create other creations (derivative works)?

  • Who will receive the compensation for derivative works of the creation?

Now, you may have ownership rights even if you never have this conversation or if you don't sign a contract at all. We'll save that discussion for another blog post. Our point here is that ownership of intellectual property has significant rights and benefits. So determine ownership of creations before the collaboration starts, rather than at the end!


Money, like ownership, is often another difficult topic for new collaborators to explore. We've heard entrepreneurs say countless of times, "I don't like to talk about money."

This statement perplexes us. If you don't talk about the money (or in-kind services), how will you be compensated for the invaluable time, expenses, and resources you'll provide to the collaboration?

Here's why money should be talked about.

First, compensation can determine the legal relationship of the collaborators, e.g., owner, employee, independent contractor, which may determine ownership of creations. Make sure you openly discuss before services or resources are contributed:

  • Is one collaborator paying another for performing services? If so, how will payment be made, e.g., flat fee, billable rate, in-kind services, etc.?

  • Are collaborators sharing the revenue generated? If so, what is the revenue share percentage?

  • Will collaborators simply split the net equally profit?

  • How will expenses be paid?

  • Who will collect the revenue and where will it be deposited?

  • When will payment of fees, revenue share, or profit be distributed?

Second, and more importantly, discussing money reveals the values and intent of each collaborator. Compensation acknowledges and demonstrates respect for another's services, expertise, time, and resources. It's a HUGE red flag when a partner refuses or evades committing to compensation in clear, unequivocal terms, signaling the potential disrespect and the intent to take advantage of another.

If this happens, don't dwell on the refusal or waste your valuable time trying to get a commitment. Instead, think about whether the behavior signals a disconnect of values or personalities. Remember, knowledge is power! You can use this information to judge if this collaborator is a true brand soulmate that best fits your goals and needs.

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