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Cost Sharing Agreement Template
Clearly define shared expenses, reimbursement rules, and payment responsibilities with this Cost Sharing Agreement Template.
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Cost Sharing Agreement Template
This Cost Sharing Agreement (the “Agreement”) is entered into as of [Effective Date] by and between:
Party A: [Full Legal Name], with an address at [Address] (“Party A”).
Party B: [Full Legal Name], with an address at [Address] (“Party B”).
☐ Additional Parties (attach list): [Party C, Party D, etc.]
Party A, Party B, and any additional parties may be referred to individually as a “Party” and collectively as the “Parties.”
1. Purpose
1.1 Purpose. The Parties agree to share certain costs related to: [Project/Property/Event/Service] (the “Shared Activity”).
1.2 Term. This Agreement begins on the Effective Date and continues until [End Date] unless terminated earlier under Section 10.
2. Shared Costs
2.1 Included Cost Categories. The following costs are shared (“Shared Costs”):
☐ Rent/Lease
☐ Utilities
☐ Maintenance/Repairs
☐ Marketing/Advertising
☐ Software/Subscriptions
☐ Professional services
☐ Event costs
☐ Travel (approved only)
☐ Other: [List]
2.2 Excluded Costs. The following are not Shared Costs:
Personal or unrelated expenses
Costs not approved under Section 4 (if approval is required)
Penalties, fines, and late charges caused by a Party
Costs resulting from negligence or willful misconduct of a Party
3. Cost Allocation Method
3.1 Allocation Method. Shared Costs will be allocated by:
☐ Equal shares
☐ Percentage split: Party A []%, Party B []% (others: [__]%)
☐ Usage-based formula: [Define metric and calculation]
☐ Headcount-based formula: [Define and calculate]
☐ Other: [Define]
3.2 Reallocation (Optional). Allocation will be reviewed: ☐ Monthly ☐ Quarterly ☐ Annually, and adjusted if: [Trigger events].
4. Approval and Spending Limits (Optional)
4.1 Pre-Approval Required. Any Shared Cost over $[] requires written approval from: [Names/Roles].
4.2 Budget Cap (Optional). Total Shared Costs are capped at $[] per: ☐ Month ☐ Quarter ☐ Project.
4.3 Unauthorized Costs. Costs incurred without required approval are the responsibility of the Party who incurred them, unless agreed otherwise in writing.
5. Payment and Reimbursement
5.1 Paying Vendor/Invoice Owner. Shared Costs will be paid by:
☐ Party A pays and invoices Party B (and others)
☐ Party B pays and invoices Party A (and others)
☐ Each Party pays its share directly to vendors (where possible)
☐ Other: [Method]
5.2 Invoice Contents. Reimbursement requests must include: vendor invoice/receipt, cost category, allocation calculation, and payment proof (if applicable).
5.3 Payment Due Date. Reimbursement is due within [] days after receipt of invoice.
5.4 Payment Method. Payments will be made by: ☐ Bank transfer ☐ ACH ☐ Check ☐ Other: [Method].
5.5 Late Payments. Late payments may incur: ☐ Interest of []% per month ☐ Late fee of $[__] ☐ Other: [Rule].
6. Records and Audit
6.1 Recordkeeping. The paying Party will maintain records of Shared Costs (invoices, receipts) for at least [] years.
6.2 Review Rights. Each Party may reasonably review Shared Cost records upon [] days’ notice.
6.3 Disputed Charges. Disputes must be raised within [__] days of invoice receipt; undisputed amounts must still be paid.
7. Taxes
7.1 Taxes. Each Party is responsible for its own taxes unless otherwise stated.
7.2 Tax Documentation. If tax forms are required, the Parties will cooperate in providing reasonable documentation.
8. Dispute Resolution
8.1 Good-Faith Negotiation. The Parties will first attempt to resolve disputes informally.
8.2 Escalation. If unresolved, disputes will be escalated to: [Executive contacts].
8.3 Forum (Optional). Disputes will be resolved by: ☐ Mediation ☐ Arbitration ☐ Court in [County/State].
9. Limitation of Liability
9.1 No Consequential Damages. To the extent permitted by law, no Party is liable for indirect or consequential damages arising from this Agreement.
10. Termination
10.1 Termination for Convenience. Any Party may terminate with [] days’ written notice.
10.2 Termination for Cause. A Party may terminate if another Party materially breaches and fails to cure within [] days after notice.
10.3 Effect of Termination. Termination does not eliminate a Party’s obligation to pay Shared Costs incurred before termination.
11. Miscellaneous
11.1 Entire Agreement. This Agreement is the entire agreement regarding Shared Costs.
11.2 Amendments. Amendments must be in writing and signed by all Parties.
11.3 Assignment. No Party may assign without written consent of the others.
11.4 Governing Law. This Agreement is governed by the laws of [State/Country].
11.5 Notices. Notices must be sent to the addresses listed above or to updated notice contacts provided in writing.
Signatures
By signing below, the Parties agree to this Cost Sharing Agreement as of the Effective Date.
Party A: [Full Legal Name]
Title/Role: [Title]
Date: [Date]
Signature: ___________________________
Party B: [Full Legal Name]
Title/Role: [Title]
Date: [Date]
Signature: ___________________________
Additional Party (Optional): [Full Legal Name]
Title/Role: [Title]
Date: [Date]
Signature: ___________________________
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Easy-to-understand jargon
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Details
Learn more about
Cost Sharing Agreement Template
Click below for detailed info on the template.
For quick answers, scroll below to see the FAQ.
Click below for detailed info on the template.
For quick answers, scroll below to see the FAQ.
COST SHARING AGREEMENT TEMPLATE FAQ
What is a cost sharing agreement?
A Cost Sharing Agreement is a contract where two or more parties agree to split certain expenses. It clarifies what costs are shared, how the split is calculated, who pays vendors, how reimbursements work, and what happens if one party pays late or disputes a charge.
When should you use a cost sharing agreement?
Use it when parties share ongoing or one-time expenses — like rent, utilities, marketing costs, project expenses, software subscriptions, or event costs. Having a written agreement helps prevent misunderstandings and gives everyone a clear process for invoices and reimbursements.
How do you decide how costs are split?
Cost splits are usually based on a percentage, equal shares, usage, headcount, revenue share, or another agreed method. The best approach is the one that is easy to measure and explain. This template includes multiple options and a place to document the chosen formula.
What happens if one party pays more than their share?
The agreement should require reimbursement and specify the timeline and proof needed (receipts, invoices). It can also include late fees or interest if reimbursement is delayed.
What costs should not be shared?
Parties often exclude personal expenses, unrelated overhead, costs caused by one party’s negligence, penalties, and unauthorized purchases. Listing exclusions avoids conflict later.
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