Contract Basics for Nonprofits Google+ Hangout Outline
I.
What is it? A. Contract is a legally enforceable agreement between two or more parBes. Generally creates an obligaBon to perform or not perform some acBon or purchase/sale some goods.
II.
Why are they important A. Evidences the parBes intent when entering the agreement. B. Sets out and memorializes definiBve terms of the transacBons. C. Gives you something a court can enforce; some teeth.
III. Contract formaBon A. Offer 1. Shows a willingness to enter into a bargain or contract, gives someone else the power to accept. B. Acceptance 1. IndicaBon that a party/parBes agree to be bound by terms of the offer that is given in the method required by the offer (if applicable). C. ConsideraBon 1. The cause, moBve, price or influence which induces a contracBng party into a contract. EssenBally anything of value. D. Present intent to be bound 1. NegoBaBons, a statement IV. Forms of Agreements A. WriVen B. Oral/ParBal C. Formal D. Informal V.
Commonly Used Terms A. Covenant 1. Future promise; ongoing promise not to take certain acBons B. RepresentaBon 1. Statement or act another party is expected to rely upon. 2. A party’s assurance as to a parBcular fact. C. Merchantability D. Non-‐infringement 1. Doesn’t infringe on a third party’s IP rights (copyrights, patents, etc.)
VI. Important Concepts (from the Buyer’s perspecBve) A. ParBes B. DescripBon of the goods or services C. Delivery/Bme and place of performance D. Warranty/Standard of performance
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H.
1. How long should the warranty be, what type of warranty do you want and what do you want the vendor to do if the good is not as promised. Watch out for disclaimers. Payment, price and method of payment 1. How is it determined? Fixed rate, Bme and materials, etc. 2. When is it due? TerminaBon 1. Do you need an iniBal term with renewals? Spot basis? 2. What rights do you have to terminate and a_er terminaBon? 3. What provisions terminate? What survives? Indemnity 1. Intellectual property 2. Bodily injury and property damage 3. Applicable limitaBons Applicable law 1. What law applies to the agreement.
VII. Things to watch out for A. Statute of Frauds B. UCC Gap fillers C. Complicated or ambiguous language-‐there’s always an easier way to write something D. Personally binding yourself E. BaVle of the forms F. AcBons when contracBng 1. Course of Dealing 2. Course of Performance Waiver 3. Trade Usage G. RFP’s H. Contract is of long duraBon 1. TerminaBon for convenience I. Requirement agreements/minimum purchases/exclusivity 1. Be minimums to discounts VIII. Gebng What You Want A. Think through the transacBon. B. What do you want to get out of the transacBon? C. When do you want to get the goods and how? D. What do you want to happen if you don’t get the goods in Bme or as promised? E. Are you comfortable with your obligaBons in the agreement? 1. Don’t let someone just talk you into it or say its “typical”. F. Don’t leave anything out, make sure anything applicable is addressed in the agreement.