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.....

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