understanding and negotiating contracts for nonprofits
DESCRIPTION
Nonprofit staff negotiate a lot of contracts, from annual meeting spaces to copier leases and software licenses. This presentation lays out the basics of contracts so they can be smarter negotiators.TRANSCRIPT
Eileen Morgan JohnsonPartnerWhiteford, Taylor & Preston, L.L.P.3190 Fairview Park Drive, Suite 300Falls Church, Virginia 22042Tel: (703) 280-9271E-Mail: [email protected]
Before we begin - what is a Contract?
It’s not what you call it that
counts
Elements of a Contract
Name the parties to the contract
The subject matter of the contract
Components of a Contract
Remember . . .
Who . . .
What . . .
When . . .
Components (continued)
Where . . .
How . . .
Why . . .
Only include if it matters
• Leases• Hotel and convention contacts
• Special skills or equipment
• The amount of money to be paid
• Each party’s motivation
Basic Terms
TIP: Use checklists when you are reviewing contracts to make sure that essential terms are not omitted.
Identification of Parties Product or Service Price Delivery dates
Breach Termination Notice Warranties
Opportunity . . .
Document . . .
Requirements . . .
to change some of the terms of the contract
agreement of both parties
in writing signed by both parties
Contract Amendments
TIP: Develop and use a template for contract amendments
Renewals and Extensions
BEWARE . . .
EXTENSIONS . . . are really just contract amendments Date for delivery is often only change automatic renewal provisions
Usually only benefit the party being paid
Often require lots of notice to cancel
Easy to forget they’re there
TIP: When presented with a contract that contains an automatic renewal provision, STOP and ask yourself if the auto renewal helps or hurts your organization
Boilerplate
How to change boilerplate
Independent Contractors
Waiver . . . a promise not to sue over any claims that might arise out of the contract
Valid waiver requires knowledge of the rights being waived
• State law may limit ability to waive claims that have not yet occurred
Waivers and Indemnification
Indemnification . . .
Waivers and Indemnification
one party agrees to pay expenses of other party in defending claims filed against them because of the contract
TIP: Indemnification agreements are only as good as the party’s financial condition or insurance coverage
Events . . .
Excuses . . .
are out of the control of either party
the party from performing their part of the contract
Force Majeure
Traditionally “acts of God” – severe weather such as floods, hurricanes or tornados or earthquakes
Modern version . . .
Force Majeure
wars, insurrections, strikes, utility failures, terrorist attacks, transportation shutdown
TIP – get Insurance coverage for force majeure events Event cancellation Business interruption
Use the right contract for the job
TIP: Don’t just download a form contract from the internet without knowing what you’re doing.
Eileen Morgan JohnsonPartner
Whiteford, Taylor & Preston L.L.P.
Phone: 703-280-9271
Email: [email protected] www.wtplaw.com
Contact Information