Cooperation agreement: what should it contain?

You and another business or freelancer have decided to work together. Maybe you deliver different services to the same customer, maybe you share a project, or maybe you are developing a product together. It seems simple and straightforward, and it often is, as long as things go well.

The problems arise when something goes wrong: who owns the results? Who bears the liability for errors? What happens if a party pulls out? A cooperation agreement answers these questions before the problems arise.

What is a cooperation agreement?

A cooperation agreement is a written contract between two or more parties that describes the terms of a specific cooperation. It is not the same as establishing a partnership company or a general partnership. A cooperation agreement typically governs a fixed-term or project-based cooperation, without the parties formally establishing a joint company.

The cooperation agreement sets the rules of the game for the cooperation and serves as the legal basis both parties can rely on if a disagreement arises.

When do you need a cooperation agreement?

A cooperation agreement is relevant when:

• Two businesses jointly deliver services to a third party
• You and a freelancer or partner share a project
• You develop a product, software or content together
• You share resources, premises, equipment or customers
• You take part in a consortium or tender with other businesses
• You have a long-term strategic partnership with a supplier or distributor

An oral cooperation agreement is legally binding but in practice almost impossible to prove and enforce. A written agreement is always preferable.

What should a cooperation agreement contain?

1. Identification of the parties

State the full legal names, CVR numbers and addresses of all parties. It is important to identify precisely which legal entities are bound by the agreement, and not just the names of contact persons.

2. The purpose and scope of the agreement

Describe clearly what the cooperation is about: which products or services are delivered, to whom and in what period? The more precisely it is described, the easier it is to determine whether a party has met its obligations.

Example: "The parties cooperate on the delivery of HR consultancy services to the Customer (see appendix 1) in the period 1 June 2026 to 31 May 2027. Party A delivers recruitment services, and Party B delivers payroll administration."

3. Allocation of responsibility and division of tasks

State precisely who is responsible for what. Unclear allocations of responsibility are the most frequent cause of conflicts in cooperation.

• Who is responsible for project management and coordination?
• Who communicates with the customer?
• Who invoices, and who receives payment?
• Who is responsible for errors in the delivery?

4. Finances and allocation

Describe how revenue and costs are allocated:

• Percentage allocation of the fee or revenue
• Who bears joint costs, and on what basis?
• Invoicing model: one invoice from a party who passes it on, or separate invoices?
• Payment terms internally in the cooperation

5. Confidentiality

Cooperation typically means you share confidential information with your cooperation partner. The agreement should contain clear confidentiality rules: what is regarded as confidential, for what period the confidentiality obligation applies, and what happens on a breach?

If you need especially strong confidentiality protection, you should consider a separate confidentiality agreement (NDA) as a supplement.

6. Intellectual property rights

Who owns the results created in the cooperation? This is one of the most important questions, and one that many forget to agree in advance.

Possible models:

• Joint ownership of all results
• The party that created it owns it
• The customer owns it, and the parties have a right to use it
• Results created by one party remain its property, while joint results are jointly owned

7. Duration and termination

State the term of the agreement and the conditions for termination:

• Is the agreement fixed-term or ongoing?
• What is the notice period?
• Under what circumstances can the agreement be cancelled with immediate effect (material breach)?

8. Breach and sanctions

What happens if a party does not deliver as agreed? Describe:

• What constitutes a breach
• The consequences (cancellation, damages, penalty)
• The procedure for making an objection

9. Limitation of liability

Many cooperation agreements contain a clause limiting the maximum liability for damages, typically to the total fee under the agreement or a fixed amount. This protects both parties against unlimited claims.

10. Choice of law and dispute resolution

State that Danish law applies and what happens in the event of disagreement: arbitration, mediation or the ordinary courts?

Cooperation agreement vs. general partnership

A cooperation agreement is not the same as establishing a partnership company or a general partnership. The main differences:

	Cooperation agreement	General partnership (I/S)
Legal entity	No new entity created	A new legal entity
Liability	The parties are liable for their own obligations	The partners are personally, directly and jointly and severally liable
CVR number	Not required as such	Required when business is conducted
Purpose	A defined cooperation	A lasting business structure
Requirements for formation	No formal requirements	Should have articles and may have to be registered with the Business Authority

For a defined, fixed-term cooperation, a cooperation agreement is almost always the right choice. If you are considering a long-term cooperation with shared capital and risk, you should look at a more formal company structure.

Cooperation agreement in consortia and tenders

If you take part in public or private tenders together with other businesses, it typically requires a consortium agreement, a special form of cooperation agreement that defines the allocation of responsibility in the tender and in the contract with the customer.

A consortium agreement should as a minimum set out:

• Who is the lead party towards the customer
• Which part of the delivery each party delivers
• Whether there is joint and several or individual liability
• What happens if a party pulls out of the tender or the contract

The most frequent mistakes in cooperation agreements

1. No agreement on IP rights. The most overlooked element. If it is not agreed, it can be doubtful who owns the results you create together.

2. Unclear allocation of responsibility. "We do it together" is not enough. Specify who leads, who coordinates with the customer, and who bears the liability for errors.

3. Missing termination terms. What happens if one party wants out? Without clear termination terms, you can both be stuck in a dysfunctional cooperation.

4. No confidentiality clause. If you share trade secrets without confidentiality being agreed, there is legally only limited protection against your cooperation partner using your know-how for its own purposes.

Frequently asked questions about cooperation agreements

Does a cooperation agreement require notarisation?

No. A cooperation agreement is a private-law contract and requires neither notarisation nor registration. It is legally binding on both parties' signature.

Can a cooperation agreement be terminated unilaterally?

It depends on the agreement's terms. If the agreement contains a notice period, it can be terminated by observing it. If it does not, the starting point in Danish law is that ongoing agreements can be terminated with reasonable notice. Fixed-term agreements as a rule cannot be terminated unilaterally before expiry, unless there is a material breach.

Does the cooperation agreement have to be registered anywhere?

No, there is no public registration of cooperation agreements. Keep both parties' signed copies and store them securely.

Can we use a cooperation agreement even if we are competitors day to day?

Yes. Cooperation on a specific project is not the same as an agreement to avoid competition. Remember, though, that agreements restricting competition contrary to the competition rules (for example on prices or market sharing) can be void and sanctioned. Cooperation on a specific project or customer is as a rule lawful.

What happens to confidentiality after the end of the cooperation?

The confidentiality obligation should expressly extend beyond the end of the cooperation period. A typical wording is that "confidentiality applies for 3 years after the end of the agreement". Without such a provision, it is unclear whether the obligation ends together with the cooperation.

Conclusion

A cooperation agreement is not bureaucracy but the foundation of a secure and effective cooperation. With clear rules on responsibility, finances, IP and termination, you can focus on delivering results rather than discussing who has the right to what. Spend time on the agreement while the mood is good, so it is in place the day you need it.

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The content of this article is for guidance only and does not constitute legal advice. Consult a commercial lawyer for advice on your specific situation.