Contract of collaboration

This guide contains a brief description of the contract of collaboration to outsource services regulated by Spanish law. You can sign a contract of professional collaboration if the realization of activities and functions by an independent professional is required. Those will be the freelance, commission and agency contracts. Or you can outsource these services to an external company.

What kind of contracts of collaboration are available?

Contract of agency

The contract of collaboration par excellence is the contract of agency. By means of this contract, a company or company orders another company or independent professional (the commercial agent) to promote, in a permanent and stable way, the sales of certain products in exchange for a remuneration.

This form of collaboration stands out for the following characteristics:

• It is an intermediation contract.
• It is used to attract customers in areas that have not yet been commercially exploited by the company concerned.
• Agent may be hired to do such work for one or more companies.
• Commercial receives the necessary means to carry out its activity.
• The functions of the commercial agent may be agreed upon in the contract (remuneration, duration, negotiating powers…)

The work of the agent is usually:

• Promote and conclude on behalf of the company acts of trade with third parties (direct agency).
• Or simply to promote such trade acts. In this arrangement, they are concluded directly by the company (indirect agency).

Freelance Contract

Another type of collaboration contract is the one that allows an independent professional or “freelance” to undertake to perform specific jobs or services for a certain period time. The freelance contract can cover both services during a particular period or specific agreed job.

The main features of this contract include:

• Flexibility in establishing the object of the contract.
• It should describe in detail what the work and the characteristics of the contract consist of.
• It must include the annexes that delimit the benefits and all the characteristics of the work (place, materials, machinery…)
• The freelance worker is an independent professional
• No employment relationship is established between the two parties.

It is very important to express the contract in writing, in a clear and well-defined way. We must correctly detail all working conditions, in addition to the obligations and responsibilities of both parties.

Comission contract

The commission contract is very similar to the mandate contract. In both cases the contract consists in the hiring of a professional (or agent) to carry out business with a third party. This will affect the profit or loss in the company’s assets. The commission agent receives a remuneration (a commission) in exchange for his services.

It will be a commercial commission contract for a salesperson when:

• The mandate is intended to carry out acts of trade (of any kind).
• And when a trader is one of the two parties (the client)

The company must sing a notarial certificate so that the professional can act on behalf of it. Once the contract has been signed, the hired professional will have an obligation to collaborate:

• Fulfilling the order received.
• Reporting his actions.
• Defending the interests of the company.
• Personally performing the order defined in the terms of the contract.
• Giving account once he has carried out the business

Outsourcing

The outsourcing contract consists in the realization by an external company of jobs and functions that would be normally carried out by the company itself. It is usual to hire companies specialized in certain tasks to improve the management efficiency of certain departments or areas of our business.

We emphasize among the most important characteristics of the outsourcing contract the following:

• It must clearly define the obligations and responsibilities of both parties. It must also contain what are the activities to be done.
• Its duration must be defined.
• It is important to specify the completion of the assignments and how to do it.
• The contract is flexible, so you can adapt it to the circumstances in any time.
• The contract may be as broad as agreed. It is up to the contracting parties.

In general, the activities carried out by the external companies are those that are not strategic for the business. Or those where there are no resources. By doing this, we save on the costs of staff and equipment in which the company would have to incur otherwise. In addition, it avoids having to specialize in a certain activity to achieve better results with lower costs.

Common clauses in the contract of collaboration

1. Parts of the contract. 
2. Territorial scope and object of the contract. 
3. Job assignments.
4. Exclusive and non-compete agreements: any limitation of the activities must be expressly included in the contract, being understood as non-existent if they have not been expressly envisaged therein. 
5. Minimum objectives. 
6. Exchange of information. 
7. Calculation and payment of commissions.
8. Duration of the contract. 
9. It is very convenient to detail what breaches will give the other party the right to settle the contract without prior notice.
10. Court and city where possible controversies will be solved.

Do you have any questions about the collaboration contracts? Do you want more information? Contact our specialist lawyers.