By Mel Shaw and Pearl Shaw
As you organize your work for the coming year, now is a good time to review the contracts or agreements you have in place or are developing. Do you know what they say? What the payments terms are? What you’re actually purchasing? Too often a deal is made, an agreement is signed, people get to work, and the paper is never looked at again. Does this sound familiar? If yes, don’t worry, we’re all human! But there are a few things to consider to help ensure positive outcomes and healthy working relationships. We are not offering legal advice – but we are suggesting you know what’s in an agreement, especially when it comes to purchasing – or selling – goods and services. Have you heard this phrase: That agreement isn’t worth the paper it’s written on. We take that to mean that no matter what’s on paper, there’s not a chance the agreement will be fulfilled.
Here are a few suggestions to help mitigate against such an outcome. What’s most important is knowing what you are buying or selling, and that the language is as clear as possible with deliverables and responsibilities of all parties clearly described with dates attached. The same is true for payment schedules: these should be tied to deliverables and/or dates. When dealing with government agencies or large corporations you may just have to “sign on the line,” but you may have more leverage when forming agreements with peer organizations, philanthropy, and small businesses. What’s most important is to have an open and honest working relationship with those you are entering into agreements with. Contracts need to include appropriate legal language, and it is equally important to have good communication and deliverables or a scope of work for services clearly defined.
There are so many things that can go wrong during the life of an agreement, making the relationship between the parties critically important. If you’re a nonprofit you don’t want to have to take legal action against anyone, and if you are not a nonprofit, you don’t want to end up in a legal entanglement with a nonprofit. It just doesn’t look good. It’s a big expense. But that may be what has to happen if a nonprofit doesn’t pay for services received, or a business doesn’t deliver agreed upon goods/services.
Here’s a list of things that can go wrong. Constant delays in actually signing the agreement; revised start dates; an unrealistic or loosely defined scope of work; unanticipated leadership turnovers that result in purchase stall or cancellation; slippage of project schedule; missed deliverables; postponed meetings; lack of understanding of method of notification of cancellation of a contract, payment dates and terms; “emergencies” that pop up and require revisions prior to signing and/or amendments after signing; delays in deliverables caused by special events, conferences, or other activities.
These are all part of life, but we recommend keeping your eyes open to help keep relationships in good standing. Here are two important takeaways: Know what the contract says, and continuously build trust and keep open lines of communication.
