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Non-Profit Organization Contract Disputes

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What Goes Into a Non-Profit Organization Contract?

Contracts for a non-profit organization can involve many different subjects and topics.  They are typically formed between a non-profit and a partner organization whenever a specific business goals needs to be accomplished by the parties.  Non-profit organization contracts can be short-term or long-term, and they can be renewable if necessary.

Non-profit organization contracts typically cover terms such as:

  • A detailed description of the project and purpose of the contract
  • Information regarding the parties involved
  • Aims and goals of the parties
  • Tasks and duties of each party
  • A schedule for the project
  • Provisions regarding quality of work standards
  • The duration of the contract agreement
  • Circumstances in which the contract can be terminated
  • How the parties are to resolve disputes that may arise in connection with the project

In general it’s necessary to have a lawyer draft and review the contract to ensure that: 1) the contract adheres to all relevant business laws; 2) the contract is fair for all parties; and 3) there are no errors in the contract. 

What Types of Contract Disputes are Common With Non-Profit Organizations?

Non-Profits are businesses just like any other organizations.  They may face many of the same types of legal issues as a for-profit organization.  Some common ones include:

  • Employment-related Disputes: Harassment, wrongful termination, and wage/hour disputes can often result due to a violation of contract terms.
  • Services/Products/Pricing:  Disputes over the services or products provided by a non-profit organization are common, especially disputes over terms like pricing.
  • Non-litigation Clauses:  In some cases, the contract can include a clause stating that the parties won’t sue each other.  Instead, they agree to handle their disputes through other means such as mediation.  Limitations on resolving disputes can cause additional disputes in the future.
  • Renewal Terms:  Disputes can arise if the parties aren’t clear on whether a contract will renew or not.  For example, one party may still be spending resources on tasks without knowing that the contract has already expired.

Lastly, property disputes can also be common sources of contract disputes for non-profit organizations.  Many non-profit groups don’t actually own the space where they operate, or they may be sharing property with other organizations.  This should be noted, as it can become a significant factor during the course of the business project.

Remedies for a breach of contract typically involve a damages award, which is used to offset the financial costs caused by the breach. 

Do I Need a Lawyer if I Have a Non-Profit Organization Contract Dispute?

Non-profit organizations can be very exciting to work with.  However, they are still subject to many different business, contract, and tax laws.  If you need assistance with a non-profit project or contract, you should contact a lawyer before you begin planning.  Your lawyer can assist you in tasks like drafting contracts and looking up the laws in your area.  Also, your lawyer can help represent you in court in the event that a lawsuit arises over the project.

Photo of page author Kristen Johnson

, LegalMatch Legal Writer

Last Modified: 12-19-2013 11:45 AM PST

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