Revenue Share Agreement (Georgia): Free template
Revenue Share Agreement (Georgia)
A Revenue Share Agreement is a legally binding contract between two or more parties that outlines how revenue generated from a specific project, product, or service will be distributed among the parties involved. In Georgia, these agreements are commonly used in industries such as technology, entertainment, real estate, and e-commerce to ensure clarity on revenue allocation, payment terms, performance metrics, and other critical aspects.
For instance, an Atlanta-based tech startup might use a Revenue Share Agreement to formalize its collaboration with a Savannah-based marketing firm to promote a new app, with profits split based on predefined percentages. A well-drafted agreement minimizes risks, ensures accountability, and aligns with Georgia’s legal framework.
Tips for drafting and maintaining a Revenue Share Agreement in Georgia
- Define revenue sources: Clearly outline the sources of revenue that will be shared, such as sales, subscriptions, licensing fees, or advertising income.
- Example: “Revenue subject to sharing under this agreement includes all gross income generated from the sale of the Product, excluding taxes, refunds, and chargebacks.”
- Specify revenue share percentages: Clearly define the percentage of revenue each party will receive. Include any conditions or thresholds that may affect the distribution.
- Example: “Party A will receive 60% of net revenue, while Party B will receive 40%. Net revenue is defined as gross revenue minus operational costs, including marketing and platform fees.”
- Outline payment terms: Detail how and when payments will be made, including payment schedules, invoicing procedures, late payment penalties, and any additional costs.
- Example: “Payments will be made monthly within 15 days of the end of each calendar month. Each party will provide a detailed revenue report to ensure transparency.”
- Address reporting and auditing requirements: Specify the frequency and format of financial reports, as well as the right of the parties to audit each other’s records to verify accuracy.
- Example: “Party A will provide Party B with a monthly revenue report detailing income, expenses, and net revenue. Party B reserves the right to conduct an annual audit of Party A’s financial records related to the agreement.”
- Establish confidentiality and data security: Protect sensitive financial information shared during the partnership by including confidentiality clauses that align with Georgia’s trade secret and privacy laws. Address data security measures to safeguard proprietary data.
- Example: “Both parties agree to maintain the confidentiality of all proprietary financial information disclosed during the term of this agreement and for a period of five years thereafter.”
- Set termination provisions: Define the circumstances under which the agreement can be terminated, such as breach of terms, mutual consent, or expiration of the agreement. Include steps for transitioning responsibilities if the agreement ends.
- Example: “Either party may terminate this agreement with 30 days’ written notice if the other party fails to comply with the terms outlined herein. Upon termination, all outstanding payments will be settled within 30 days.”
- Include dispute resolution mechanisms: Specify how disputes will be resolved, whether through negotiation, mediation, arbitration, or litigation. Include jurisdiction and governing law clauses to streamline the process.
- Example: “Any disputes arising under this agreement shall be resolved through binding arbitration in accordance with the rules of the American Arbitration Association. The arbitration will take place in Fulton County, Georgia, and the decision will be final and binding.”
- Align with Georgia-specific laws: Ensure the agreement adheres to Georgia’s contract laws, including the Georgia Uniform Commercial Code (UCC) for transactions involving goods. Additionally, address alignment with consumer protection statutes and tax regulations.
- Example: “This agreement shall be governed by and construed in accordance with the laws of the State of Georgia. Both parties agree to adhere to all applicable state and federal laws, including tax and consumer protection regulations.”
- Specify warranties and disclaimers: Include any warranties provided by the parties, such as performance guarantees, as well as disclaimers for issues outside their control.
- Example: “Party A warrants that all revenue calculations will be performed accurately. However, Party A disclaims any liability for errors caused by third-party platforms or unforeseen market conditions.”
- Address intellectual property rights: Clarify ownership of any intellectual property created or used during the partnership. Specify whether intellectual property rights are shared, retained by one party, or licensed.
- Example: “All intellectual property developed during the term of this agreement remains the exclusive property of Party A. Party B is granted a non-exclusive, non-transferable license to use the intellectual property solely for purposes related to this agreement.”
Frequently asked questions (FAQs)
Q: Can a Revenue Share Agreement include clauses specific to Georgia’s film or music industries?
A: Yes, Revenue Share Agreements in Georgia can include industry-specific clauses, especially if the revenue relates to local sectors such as film production, music royalties, or streaming platforms. For example, a Macon-based filmmaker might use a Revenue Share Agreement to distribute profits from a movie produced under Georgia’s film tax incentive program.
Q: What happens if one party fails to report revenue accurately in a Revenue Share Agreement?
A: If one party fails to report revenue accurately, the agreement should specify penalties or remedies, such as interest on unpaid amounts, audit rights, or termination of the agreement. Including clear reporting requirements helps avoid disputes.
Q: Are there unique tax considerations for Revenue Share Agreements in Georgia?
A: Revenue generated from Revenue Share Agreements may be subject to Georgia’s state income tax and sales tax, depending on the nature of the transaction. Consulting a tax professional ensures compliance with all applicable tax laws.
Q: Can a Revenue Share Agreement in Georgia include provisions for remote work arrangements?
A: Yes, a Revenue Share Agreement can include remote work provisions, but it should clearly define expectations for communication, deliverables, and deadlines to ensure productivity and accountability.
Q: How can a Revenue Share Agreement address potential delays in revenue distribution caused by external factors?
A: A Revenue Share Agreement can include a clause addressing unforeseen delays, such as platform outages, regulatory changes, or economic downturns. This clause should outline how such delays will be managed, including adjustments to payment schedules or timelines.
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This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.