Are you self-employed? If so, are you perhaps the owner of a small business that provides a service to a non-profit organization? Do you have to sign a contract drawn up by the non-profit’s attorneys? If so, what is the most expedient way to define, create, revise, and finalize the contractual relationship between the non-profit and yourself?
The contract: A legal construct and relationship between two entities
Most services supplied to NPOs are defined and set out within the legal construct known as a contract.
By way of expanding on this statement, let's look at the legal definition of a contract, its elements, and the relationship it defines between all the signatories.
The Legal Information Institute defines a contract as an “agreement between private parties creating mutual obligations enforceable by law.”
For the purposes of this article, let's assume that you own a medical waste disposal company, and you have successfully quoted on removing medical waste from an NPO that opens medical clinics in poor communities with very little access to primary healthcare.
Therefore, this contract will define the relationship between yourself and the NPO concerning the removal and legal disposal of the medical waste from their clinics in the area that you service.
As drawn up and managed by specialized non-profit contract management software, the elements of this contract include “mutual assent, expressed by a valid offer and acceptance; adequate consideration; capacity; and legality.”
The contract must also state the possible remedies for the breach of contract, such as “general damages, consequential damages, and reliance damages.”
In summary, a legal contract is simply the legal expression of one or more promises that the state and federal law will enforce.
The intersection or commonalities between the non-profit and your business
The word “intersection” is defined as the point at which the elements within two groups of information meet to determine its commonalities. While this might be considered a fairly complex mathematics concept, it is also used as a means to describe the relationship between two groups or sets.
Our scenario or case study allows the relationships between the following elements to be defined: The NPO, work to be completed (or services provided), and the company or individual providing the service.
Let’s look at each element in detail:
1. The NPO
As highlighted above, the Non-Profit Organization (NPO), Non-Profit A, raises funds to operate primary healthcare clinics in a low-income area known to us as Region X. The COVID-19 pandemic has not only decimated the global economy, but it has wiped out the collective income of 90% of this region.
As an aside, global forecast statistics estimate that the pandemic could cost the world’s economy between $5.8 trillion and $8.8 trillion (USD). The world has entered the worst recession since the 1930s Great Recession.
The second quarter of 2020’s jobs numbers showed about 30 million US residents collecting unemployment benefits each month between April and June 2020. Finally, it stands to reason that the majority of people living in low-income areas have lost their jobs due to the COVID-19 pandemic.
These numbers and conclusions explain the need for free primary healthcare clinics in the poverty-stricken regions such as Region X. Non-Profit A is perfectly positioned to provide this service. It is registered with the state and federal governments; thus, it can raise monies to fund these clinics. Consequently, it is able to primary healthcare specialists such as doctors and nurses, purchase essential medicines and vaccines, and contract third-party suppliers to remove the clinics’ medical waste.
2. The service required and provided
Medical facilities generate waste that has to be disposed of in a particular manner.
What is medical waste?
Succinctly stated, it is described as any item or material that comes into contact with human body fluids. A typical example of this is a tongue depressor or spatula that a doctor uses to depress the tongue during a physical examination. This tongue depressor is usually wooden and comes into contact with human saliva as it makes contact with the tongue. Once the throat examination is finished, the doctor must throw the spatula into the medical waste container.
Because medical waste contains items that have come into contact with human body fluids, it is considered hazardous material that may be “infectious, chemical, or radioactive.” Therefore, it must be housed and disposed of in a specific manner.
The contractor, or service provider, is obliged to provide Non-Profit A with specially marked containers or bins where staff can safely dispose of this waste. Secondly, it must be collected and disposed of correctly. The contract between both parties must, and will, specify these details.
3. The service provider
The service provider is the individual or company that is providing the service to the non-profit. In this scenario, you are being contracted to provide Non-Profit A's clinics in Region X with the correctly marked disposal containers and remove them from the clinics' premises within a stated number of days after the empty boxes were delivered.
It is essential to note that medical waste is divided up into different categories, including general waste, infectious waste, cytotoxic waste, sharps waste, pathological waste, and pharmaceutical waste. You, as the service provider, must provide different containers for each of these waste types.
This waste can have a negative impact on the environment. Therefore, Non-Profit A is particularly keen to ensure that you dispose of the waste appropriately. Consequently, it is set out in detail in the contract with penalties, including the contract's termination and criminal charges if you are found wanting in this area.
It is evident from this discussion that there are intersections between the non-profit, the contract, and you, the service provider. The contract is the meeting point between both the third-party individual and the NPO. It is reasonable to conclude that the contract is the glue that holds the parties together. Therefore, it is essential to utilize every available resource, including the contract management application software, to ensure that the contract lifecycle is appropriately managed.