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Business Partners Agreement (BPA)

A business partnership agreement is a formal contract between two parties that defines each party's responsibilities and sets clear expectations for how they will work together. It serves as a reference point for resolving disputes and establishing the terms of a shared business relationship.

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About this video

A business partnership agreement is a binding contract between two parties—whether individuals or organizations—that defines the terms under which they will conduct business together. It establishes clear expectations for each party's roles and responsibilities, reducing the potential for misunderstandings and creating a framework for resolving disputes if they occur. Any two entities entering a shared business arrangement benefit from having this agreement in place before operations begin. A practical example of this type of agreement in action involves a U.S.-based company that wanted to sell its product in a foreign market but was legally prohibited from doing so directly under that country's laws. To enter the market, the company formed a partnership with a locally established reseller and executed a formal business partnership agreement. The arrangement allowed the U.S. company to access a new market while providing the reseller with a revenue opportunity, demonstrating how these agreements can create mutually beneficial outcomes while navigating regulatory or operational constraints.

What you'll learn

Explain the purpose of a Business Partnership Agreement and how it defines responsibilities and expectations between partnering entities

What's covered

Business Partnership Agreement

What It Is
- Agreement Between Two Parties
- Sets Clear Expectations
- Resolves Future Disputes
Why It Matters
- Clarifies Responsibilities
- Avoids Contention
- Provides Dispute Resolution
Who Should Use It
- Two Organizations
- Two Individuals
- Both Parties Sign
Real-World Example
- US Company, Foreign Market
- Legal Barriers to Selling
- Reseller Partnership Formed
- Mutual Benefit Achieved

Aligned to

CompTIA Security+

5.3 Explain the processes associated with third-party risk assessment and management.

NIST CSF

GV.SC-02 Cybersecurity roles and responsibilities for suppliers, customers, and partners are established, communicated, and coordinated internally and externally.

NIST 800-53

SA-9 External System Services

ISC2 CISSP

1.11 Apply Supply Chain Risk Management (SCRM) concepts

Key terms

Business Partnership Agreement: A formal contract between two parties that defines each party's responsibilities, expectations, and how disputes will be resolved when doing business together.

Topics

Business Partnership Agreement Vendor Management Legal Agreements Governance Risk Compliance Third Party Risk

Transcript

Whenever two people or two businesses decide to do business together and create a partnership, there should be some sort of contract, some sort of agreement, that outlines what each party is responsible for. This makes sure that everything is clear and the expectations are set on both sides. Not to mention, if there is ever any issues down the road, then you know how to clear it up based off of the contract.

That's what a business partnership agreement is: it's an agreement between two parties. A business partner agreement really sets the tone for how two entities are going to do business together. It sets the clear expectation of each party and what they're responsible for, and that avoids having any kind of contention down the road, or if there is contention, hopefully you can clear it up through this contract.

Who should set one up

So who should set up a business partnership agreement? It really is any two organizations who are wanting to do business together, or two people who want to do business together. You would set this up between you two, and then you would sign it.

An example

Let me give you an example of a business partnership agreement. I worked for a company that was based out of the United States. They wanted to sell a product in another country, a product that they were creating in another country, but they weren't allowed to, because certain laws didn't allow this company to sell their product in this other country.

So what they did is they created a partnership. We signed a business partnership agreement with this reseller business that was based out of this country, and now we could resell our product in this other country. We got the benefit of being able to now sell products in this country, and the other company got the benefit of making money off this as well.

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