5 Types of Contracts Every Non- profit Should Know About By: Erin McClarty Esq.
Jun 20, 2015
5 Types of Contracts Every Non-profit Should Know About By: Erin McClarty Esq.
Familiarize you with agreements your organization may cross during operations.
Suggest concepts you will want to be thinking about when negotiating
Equip you with resources and direction to make sure your organization is covered
Summary
License Agreements
Agreement that gives one party conditional rights to use intellectual property owned by another party.
LA: Ways You’ll EncounterHiring someone to develop or build something for you
Wanting to use someone else’s I.P. such as a speech or software
Allowing someone to use your I.P. such as your logo
LA: Concepts to Think About
What parameters must your organization operate in?
Will the software or product get fixed if its incorrect? How?
Does anyone else have rights in it?
LA: Covering YourselfUnderstand “use” and restriction clauses
Detail what you expect to receive and how you expect it to work
What falls under warranty? How must it be fixed? By when?
Representations (a promise) that seller/developer has title and rights in what is being sold
Get an “indemnity”
Commercial Leases
An agreement between a business and landlord allowing the business to rent a building or space.
Maintaining flexibility for your organization
What does your organization need the space for?
What are your organizations obligations under the lease? Once the lease terminates?
CL: Concepts to Think About
CL: Covering YourselfAssignment/Subletting clause in case you grow
Language allowing for alterations to the space
Covenants and warranties
“Quiet Enjoyment” and “Warranty of Use”
What do the Maintenance, Default and Restoration clauses say
Non-Disclosure Agreements
Agreement between two parties where confidential or proprietary information is being exchanged and they don’t want that information getting to third parties.
NDA: Ways You’ll Encounter
Selling or buying proprietary rights
ex. patent to a product
Providing goods or services to people
Collaborating with another organization
NDA: Concepts to Think About
When must your organization comply? i.e. when is the agreement triggered?
What does the agreement apply to?
How long does the agreement apply?
NDA: Ways to Cover YourselfDefine what type of information is “confidential information”
Make clear what circumstances or purposes trigger the agreement
Include instances or “exclusions” that don’t fall under
ALWAYS have a time limitation
Master Service Agreements
Agreement between two parties detailing the terms of future services being provided
MSA: Ways You’ll EncounterWhen having services continually provided
Allows you to skip negotiating terms each time
Can give you leverage in pricing
Have a steady source for services
Will often deal with in things like uniforms, coffee and copy machines
MSA: Concepts to Think AboutPrice and payment terms
What services are covered
What happens if the services aren’t as promised
Who is responsible if property is damaged or people are hurt
When will the agreement terminate
MSA: Covering YourselfOutline what specific services are covered by the agreement
Get warranties for the service. Detail how defective services must be remedied
Pay attention to the indemnity and liability provisions
Avoid “evergreen” termination clauses
Purchase Agreement
Agreement between two parties detailing terms for the sale of goods.
PA: Ways You’ll Encounter
Purchasing equipment or goods for use by your organization
Purchasing parts for any products your organization might make
PA: Concepts to Think AboutWhat are the warranties
Who is responsible for delivery and if something happens during delivery
How has intellectual property been addressed
What happens if someone is hurt using the product
PA: Covering Yourself
Spell out warranties as addressed before
Pay particular attention to delivery terms. Are Incoterms being used? When does title and risk transfer?
Who gets rights to the information, data, etc. in the product? Is it to your specifications? Or off the shelf?
The seller should always be responsible for injuries that occur from a defect in their manufacturing. Indemnity provisions important when goods involved
Things to Keep in MindMean what you say and say what you mean
No “here-to-for-therein” phrases
Avoid boilerplate
Sit down and think the whole transaction out
ResourcesLocal state bar or organizations may help with review
In Texas there is TALA, HVLP and Texas-Cbar
Learn basic contract principles
http://www.nolo.com/legal-encyclopedia/contract-basics
Look at contract repositories for ideas
http://smallbusiness.findlaw.com/business-forms-contracts/
Utilize outsourcers
For more information.....
Check out my blog!!! www.notationsonnonprofits.com