A well drafted contract accurately represents what both parties expect from the agreement. Your nonprofit organization could end up in court or out of pocket large sums of money if you don’t get it right. It is, therefore, important to have the contract represent all parties’ expectations.
Quite simply, a contract is an agreement between two parties that can be enforced by a court.Â It involves an offer by one party to provide something of value to another party, followed by the other partyâ€™s acceptance of the offer and exchanging money or something else of value in consideration for the services or goods that are to be provided.Â
Force majeure has become the word â€œdu jourâ€; French for â€œsuperior force,â€ it refers to a principle of contract law in which parties to a contract can limit their liability and performance obligations. In the simplest terms, it allows parties to suspend or discontinue the performance of contractual obligations in cases of emergent circumstances beyond the partiesâ€™ control. It may also operate to limit contractual liability. But its practical application is nuanced. Hereâ€™s what you need to know:
Nonprofits tend to view MOUs as a kinder gentler way to document their intentions. Â However, a contract is, at its core, an offer by one party to do something, an acceptance by the other party, and the promise to exchange something of value to seal the deal. Under this definition, the MOUs we see nonprofits create are almost always bare bones legal contracts.