What is a separation agreement?
A binding separation agreement is a contract between two parties, a legally enforceable agreement. Applying this definition to the construction industry, a separation agreement is entered into by teams of people or businesses considering working together on an international project. In these circumstances, a construction separation agreement may be a binding contract between the parties who are selecting to work together on a global project or area of activity.
Construction separation agreements
When businesses or teams of people work together in international projects, they may decide to enter into a legally binding agreement, to govern their cooperation. An example is provided in the following scenario; where an international team of architects and engineers, are to work together on building a second centre for a large organisation, in an alternative country, to the one where they built the first centre. The separating agreement would provide for the parties to work together under contractual provisions that bind them to work together in accordance with the terms and conditions of the agreement. Often, companies or governmental bodies will enter into a standard type of agreement, which aids in the establishment of parameters of the working relationship and builds trust between the parties. A clear separation agreement is invaluable when teams of people are selecting to work across countries or continents, whereby cultural and/or legal differences come into play. From a legal perspective, the parties have the protection of a written agreement, with clear identification of their respective roles, rights and responsibilities in collaboration with their international peers or partners. Once again, using the example of an international team of architects and engineers, a separation agreement may include clauses such as; co-location; the nominated direction of their energy and focus; allocation of costs and expenses, intellectual property and confidentiality; structure of participation; committee framework; the nature of their relationship; dispute resolution. To give context to these clauses, if you are working within a defined budget the monthly or quarterly costs need to be agreed at the outset, as well as the expectations in terms of timeframe or milestones. Next, in terms of compliance, there may be relevant incorporation of local laws and regulations, whereby the parties’ activities must adhere to the statutory obligations and requirements of the chosen country in which they will be operating. In other words, if you are working abroad, you would consider that the law(s) of the respective country (or countries) will apply to your joint working venture. As the independent nature of each role or business may be reduced to just one ‘team’ on the project or activity, it is important that the separation agreement contains all laws or regulations that are considered relevant and protective of the parties involved.
International joint ventures and separation agreements
There is a common misconception, particularly in relation to contracts such as separation agreements, that these types of agreements are quick and easy to prepare. As the building and construction industry is directly affected by the level of formality that attach to a parties’ agreement, there is a need to ensure that the necessary needs are met, without compromising that which has been built over a period of time, i.e. the relationship itself. Yet, the framework, line of communication and dispute resolution procedure is an essential part to ensuring that the relationship or project runs smoothly and that any issues are effectively addressed. The work of an architect may require more professionalism and attention to detail, yet your relationship is still vitally important. When preparing separations agreements for construction or architectural joint ventures, there are many layers to the document itself, yet the successful projects or activities are the ones that have anticipated any roadblocks, before they can arise. An important factor when working with a team of people from another country, is how those involved communicate using both spoken and written language. If the separation agreement is written in one language, the individual responsible for interpreting and communicating the agreement’s provisions to the relevant parties in their country, would need to be fluent in both languages. From a commercial standpoint, the use of this style of contract or agreement, enables the parties to combine their knowledge, experience and financial resources to work collectively on a project, which may have been impossible, without a separation agreement. As is the case with any legally binding agreement, breaches or disputes that arise are dealt with in accordance with the provisions that apply, for example, the governing law or rules of arbitration. If you are unsure about whether a construction separation agreement is a separation agreement legally binding then read, Determining whether a separation agreement is legally binding. If you have confidence in the separation agreement and are ready to implement the agreement, or if you have had ongoing collaborative projects with a group of people who you are yet to enter into a separation agreement with, you may wish to share the following tips or advice; When working together, the focus should be on the project or area of the industry where the parties have complementary services and expertise. Building a good working relationship within a collaborative team of people over an extended period of time, not only creates value for the individuals or businesses involved, but within the industry as a whole. When working towards a goal and cooperating with people who operate from different places or jurisdictions, there is a need to be aware that there are varying laws or requirements that must be adhered to, there may be cultural differences, and a need to build a bridge between the two parties or groups of people.
