Revenue Share Agreement (Oklahoma): Free template
Revenue Share Agreement (Oklahoma)
A Revenue Share Agreement is a legally binding contract between two or more parties that outlines how revenue generated from a specific business activity, product, or service will be distributed among the parties. In Oklahoma, Revenue Share Agreements are commonly used in industries such as software development, e-commerce, entertainment, real estate, and franchising. These agreements provide clarity on revenue distribution, performance expectations, reporting obligations, and align with Oklahoma’s legal framework.
For example, an Oklahoma City-based tech startup might use a Revenue Share Agreement to formalize its partnership with a Tulsa-based marketing agency to share profits from a co-developed AI-driven advertising platform. A well-drafted Revenue Share Agreement fosters transparency, minimizes disputes, and adheres to Oklahoma’s contract laws and consumer protection statutes.
Tips for drafting and maintaining a Revenue Share Agreement in Oklahoma
- Define the scope of the agreement: Clearly specify the business activity, product, or service generating the revenue to be shared. Ensure the agreement outlines each party’s roles, responsibilities, and contributions.
- Example: “The Parties agree to collaborate on the development and marketing of an AI-driven advertising platform (the ‘Platform’), with revenue generated from Platform subscriptions to be shared as outlined herein.”
- Specify revenue-sharing percentages: Clearly define the percentage or fixed amount of revenue each party will receive. Include details about whether the revenue share is based on gross revenue, net revenue, or another metric.
- Example: “Party A will receive 60% of the net revenue, while Party B will receive 40% of the net revenue. Net revenue is defined as total revenue minus direct costs associated with delivering the Platform.”
- Outline payment terms: Detail how and when payments will be made, including payment schedules, invoicing procedures, late payment penalties, and any additional costs or deductions.
- Example: “Payments will be made monthly within 15 days of the end of each calendar month. Payments will be accompanied by a detailed report outlining revenue calculations and deductions.”
- Establish reporting and auditing requirements: Specify the frequency and format of financial reports, as well as the right of either party to audit the other’s records to confirm accuracy.
- Example: “Party A will provide Party B with a monthly revenue report detailing all transactions, deductions, and revenue calculations. Party B reserves the right to conduct an annual audit of Party A’s financial records related to the Platform.”
- Clarify intellectual property rights: Define ownership of any intellectual property created or used during the collaboration. Specify whether intellectual property rights are shared, retained by one party, or licensed.
- Example: “All intellectual property related to the Platform remains the exclusive property of Party A. Party B is granted a non-exclusive, non-transferable license to use the Platform during the term of this agreement.”
- Address confidentiality and data security: Protect sensitive information shared between the parties by including confidentiality clauses that align with Oklahoma’s trade secret and privacy laws. Address data security measures to safeguard financial and operational data.
- Example: “Both parties agree to maintain the confidentiality of all proprietary information disclosed during the term of this agreement and for a period of five years thereafter. Each party will implement industry-standard encryption and access controls to protect shared data.”
- 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 Oklahoma County, Oklahoma, and the decision will be final and binding.”
- Align with Oklahoma-specific laws: Ensure the agreement adheres to Oklahoma’s contract laws, including the Oklahoma 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 Oklahoma. Both parties agree to adhere to all applicable state and federal laws, including consumer protection and tax 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 the Platform will perform substantially in accordance with the documentation provided. However, Party A disclaims any liability for damages caused by third-party integrations, hardware failures, or acts of nature.”
Frequently asked questions (FAQs)
Q: Can a Revenue Share Agreement be enforced in Oklahoma courts?
A: Yes, a Revenue Share Agreement is enforceable in Oklahoma courts as long as it complies with Oklahoma’s contract laws, is clear and unambiguous, and includes mutual consent from all parties. Properly documenting the agreement strengthens its enforceability.
Q: What happens if one party fails to meet performance expectations in a Revenue Share Agreement?
A: If one party fails to meet performance expectations, the other party may pursue remedies such as renegotiating terms, demanding compensation for losses, or terminating the agreement. Including performance benchmarks and consequences for non-performance can help prevent disputes.
Q: Are there tax implications for Revenue Share Agreements in Oklahoma?
A: Revenue generated from Revenue Share Agreements may be subject to Oklahoma’s state income tax and sales tax, depending on the nature of the transaction. Parties should consult a tax professional to ensure compliance with all tax obligations.
Q: Can a Revenue Share Agreement include clauses for adjusting revenue shares over time?
A: Yes, Revenue Share Agreements can include clauses for adjusting revenue shares based on milestones, performance metrics, or other factors. For example, revenue shares could increase after reaching a certain revenue threshold or achieving specific goals.
Q: How are audits conducted under a Revenue Share Agreement in Oklahoma?
A: Audits are typically conducted by the party entitled to review financial records, as specified in the agreement. The auditing party may request access to relevant documents and records, and the audited party must cooperate fully. Audit results are often used to verify compliance with payment terms.
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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.