University and business collaboration agreements: model variation agreements
Published 6 October 2016
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Overview
These are designed to be used when a new party joins the Project but, with amendment, they could be used when a party leaves and the work is re-allocated or when the parties agree to make any other variation to the agreement.
The variation agreements list each clause in the collaboration agreement or the consortium agreement as a prompt to the Parties to consider whether there are consequential changes to be made to each clause. In practice it may not be necessary to change every clause.
The variation agreement will not be binding (with the result that not all the Existing Parties will be able to enforce the agreement against the New Party) unless there is consideration, i.e. that each Party who receives the benefit of a promise or undertaking gives something in return. In many cases the Existing Parties will give promises or undertakings to the New Party in return for the New Party’s promises/undertakings but, to avoid the possibility of there not being consideration, the variation agreements adopt the simple expedient of having each of the Existing Parties paying the New Party £1.
The fact that the £1 is little compared to the value of the New Party’s promise to participate in the Project does not matter; it is the fact that there is consideration (and not its adequacy) which matters.
The alternative to paying £1 is that the variation agreement is executed as a Deed. These forms of variation agreement do not take the form of a deed in order to avoid the delay which that might involve.
In some cases, in order to avoid administrative hassle, one of the Existing Parties may sign a variation agreement on behalf of the other Existing Parties. If that is to happen, it is important to check that proper authority has been given to the party signing on behalf of the other Existing Parties and that the other Existing Parties have the right to give that authority.
The variation agreements may be adapted for use where one Party ceases to be involved in the Project (the Retiring Party) and another party (the New Party) comes in to take its place. In that case the Retiring Party will be concerned that there is a clause releasing it from future obligations. The other Parties (whether an original Party or the New Party) will be concerned to ensure that certain provisions of the research collaboration agreement (such as the Confidentiality clause) continue to be binding on the Retiring Party and that the Retiring Party’s IP may continue to be used by the continuing Parties. Please see clause 10 of the consortium agreements, for an example.
Clause 1.5 and references to the Funding Conditions should be deleted if there is no External Funding for the Project.