Create Your Subcontractor Invoice Template for NPOs Effortlessly

Subcontractor invoice template for NPOs

uh good morning uh my name is John Harbin I'm a partner with King and sping in the Atlanta office I'm going to be presenting for proon partnership this proon Partnership of Atlanta this morning on the does and don'ts of Contracting the mission of prono partnership of Atlanta is to maximize the impact of prono Engagement by connecting a network of attorneys with nonprofits in need of free business legal services this next slide shows uh the requirements to be a client of prob bonal Partnership of Atlanta beginning with being a 501c3 nonprofit and the other requirements are shown you can also visit us on the website at .b p.org we host free monthly webinars on legal topics for nonprofits to view up upcoming webinars or workshops visit the workshops page on our website and you can join our mailing list by using the email shown here rla pbpa t.org um this webinar presents General guidelines for Georgia nonprofit organizations and should not be construed as legal advice you should always consult an attorney to address your particular situation and all to reserve no further use copying dissemination distribution or publication is permitted without the express written permission of proot partnership of Atlanta so as I said we're going to be talking about the basics of Contracting and some basic dues and don'ts beginning with the question what is a contract a contract is simply an agreement between two or more parties it can be many parties to do or not to do something we don't generally think in terms of uh agreements not to do something but an example would be an employee who agrees that he or she will not solicit employees or customers when he or she leaves the current position the requirements of a valid contract the required elements are an offer consideration acceptance and mutuality these are legal terms but they basically mean there must be a specific promise offered there must it must be accepted there must be some value given or received for the promise that's the consideration and there must be mutual obligations one practical Point uh to underscore regarding the consideration of the value given is that in Georgia and Most states the court if if there's a dispute about the contract will not generally second guess the adequacy of the value given or consideration for example if you contract to sell your office equipment for $5,000 and you get more information you realize it it's probably worth 15,000 the court uh is not going to allow you to escape the initial contract based on your unilateral sort of mistake um there's an old Canard but from decades really centuries back that we lawyers he in law school that a single pepper corn suffices as adequate consideration for a contract uh in fact you you still see used to see a lot of contracts that would say for $1 given and received and other unspecified consideration the parties agreed to do a or C another question uh is do contracts have to be in writing and the answer is there a general rule no oral agreements can be enforced there are some exceptions by Statute in Georgia and generally by the way I'm going to be focusing on Georgia law in this talk because the nonprofits that promotal partnership serves are based in Georgia generally for most of the issues we're talking about most ma most large states that you might see in a contract a provision that their law controls for example New Yorker Illinois Law you often see and most of these issues their law will be substantially the same but there again there might be some differences in specific areas anyway in Georgia there are some exceptions the contracts must be in writing to be enforced I've called out the ones that might be relevant to you all here and those are that an agreement regarding the sale of real estate real property or an interest in Real Property generally must be in writing an agreement to sell more than $500 in Goods must be in writing to be enforced promises to make a loan must be in writing and Promises to pay another's Debt Pay a loan for them must be in writing and promises that cannot be performed within one year generally must be in writing now if you've had experience with the legal system in Georgia or the the laws in general you know that there are very few hard and fast rules and there are exceptions to these exceptions uh for example if some if the other side substantially performs the oral agreement even though generally it must be in writing a court may require you to honor that agreement for example if you have a contract that uh you sublet a farm to a tenant and say if they will harvest the crops and maintain the property for 20 years and you'll split the proceeds of selling the crops and at the end of the 20 years they you'll turn over the property to them and at the year 19 you decide U you know you get an offer that's too good to refuse the court may say well you're stuck with that promise even though it was not in writing because the tenant performed for 19 over 20 years that's called a stopper a related issue is uh that uh you don't have to necessarily have a writing that both parties sign a common example for you would be invoices often you'll get invoiced by A supplier of office equipment or copy paper that's can be a valid agreement we'll talk more about that later even though both parties have find and if you do have a written agreement it doesn't have to be multiple Pages an agreement can be one sentence and if it lays out the promise specifically what's going to be done and who the parties are there's an agreement it can't be enforced uh one General topic I wanted to go over is what are the general remedies if the contract is breached if the promise is broken generally there are two two remedies the aggrieved party can seek in court monetary damages for the breach or in some circumstances an order from the court that the promise be fulfilled that the contract be performed that's called in Georgia a request for specific performance of the contract that latter remedy is only generally available if it's a unique contract such as a sale of a particular pie pie of land if the court finds that monetary damage will compensate the agreed party then generally you cannot get the agef party cannot get that order for specific performance monetary damages can take some different forms the most common form is U an award for lost profits what you would have earned if the contract has been performed sometimes you have a hard time proving those sometimes you can only get the cost you incurred in relying on the other side to perform the contract e get a turn yes question of getting attorney fees the only other circumstances generally we're having some technical difficulties so we may pause from time to time but the only other situation generally in which you can get attorneys fees in Georgia the only other scenario as if the other side has acted in bad faith in the transaction maybe they have misrepresented a fact in getting you to either agree to the contract or perform the contract um or once the dispute arose once it went to court um they engaged in contact that the law per cause stubborn litigiousness or putting you to unnecessary burden or expense it's a practical matter what that means is well let me give an example to show what it means maybe the other side has denied throughout the litigation a fact that's obviously true and once you establish that fact the court may find that the other side was stes and allow you to get attorneys fees but in the run-of The Mill run-ofthe-mill contract disputed the prevailing party does not get attorney now what should you do if if you perceive a breach of your contract has been breached the other side is not keeping their promise uh to start at the bottom of this list uh first and foremost you should consult an attorney and again if you cannot afford an attorney talk to prob owner partnership uh we may be able to provide an attorney either to consult or to represent you throughout the dispute save your records and the attorney would talk to you about that but save your records not only the contract but correspondence with the other side internal emails about the contract the matter like records of payment that kind of thing uh be polite of course I'm a firm believer and always being professional U regardless of whether the other side is polite a professional but be firm one of the biggest mistakes I see and we'll talk more about this is when a a party to an agreement is reluctant to you know take the steps to the other side I think you breached the agreement you know people like to avoid unpleasant task but particularly in Contracting a lot of times it may be a A supplier that you've worked with for a decade an employee that you've it's worked with you for a decade that you've become good friends with Etc but you have to assert your rights the Practical problem if you don't is that you may be found by the court to have waved your ability could claim a breach of the agreement or you may be found to have waved certain remedies the related a related Doctrine in Georgia is that you're stopped from asserting a breach of contract depending on whether the other side relied on your inaction your your failure to assert the breach there's a specific related Doctrine in Georgia called the mutual departure Doctrine it's a statutory provision in the code of the contracts CA Georgia and what that generally provides is if you have a contract and both parties depart from the specific terms of the contract and something of value is given money is paid work is done under that departure you have to give reasonable notice to return to the original terms of the agreement and you have to give the other side a reasonable time to to return for example if again you dou at your office space to a subtenant and the agreement says the subtenant will pay rent every month on the fifth day of the month but for two years you've accepted the rent on the 30th day of the month you can't all of a sudden claim the subtenant breach the agreement by not paying on the fifth day if you want to return to that requirement you've got to give the tenant notice and a reasonable time to go back to what the contract originally said uh what to do if you are accused of breaching a contract breaking your promise again first and foremost consultant attorney and retain your relevant records and by the way uh these days and for a long time this has included emails internal emails and other electronic Files about the matter uh not just the contract but the work done related to the contract so you need to keep those contra records once you know there is a dispute pending about you know a dispute in Prospect about the agreement again when you are accused it's very important as a general rule to respond to the allegations again painful as that may be upsetting to a relationship as it may be um silence failure to respond to allegations that you breach the agreement can be deemed an admission acquiescence in the allegations and that's for a couple of reasons or under a couple of principles first in Georgia this is under the evidence code not the contract code but there's a specific provision it says in a business relationship if you receive a letter that a reasonable person would respond to in this case denying the allegations and you've reached an agreement and you do not uh the jury or the judge can find that you they can there's a presumption that they can travel on the judge or the jury that you agree with the allegations you don't deny them and even without that U statutory provision it's a practical matter if this dispute does go to court the judge and then the judge and the jury is going to look back at the history of the relationship and if they see there was a letter months before the lawsuit was filed where the other side asserted uh that you breached the agreement and you did not respond as a practical matter the judge or jury May age well there must have been something to that allegation or you in this case the receiving party would have responded um again be professional polite as it you know the response should be factual as a general rule again I would generally avoid going into chapter and verse and writing a novel but you should lay out the basic facts be sure the facts of course are accurate and supportable but you should as a general rule respond to such charges you know the old proverb a stitch in time saves nine I've seen repeatedly I've probably litigated certainly more than a couple of hundred contract disputes of various kinds and it's very true that taking action early can avoid much bigger problem down the line I want to take a few minutes to talk about some contract issues that I think might be specific to um nonprofits and really any business doing you know for-profit or nonprofit business providing Services uh one relates to employment the various employment issues um as a general rule when you provide benefits salary other benefits it's good to put those benefits in writing so there's no misunderstanding and it's very good as the employer to put the employment the nature of the employment relationship uh in writing uh if you're going to review this if this is an annual contract you should put that in writing if they're an employee Georgia allows atwi employment where the employer subject of course to anti-discrimination ation statutes and those kinds of things can terminate someone's employment without any reason um that flexibility is valued by employer employers and so but you need to put that in writing again you hire you may hire someone you know very well you have a longterm relationship but if things go south if their financial status changes their attitude may change and frankly again from litigating hundreds of such disputes their memory may change um that was one that's one of the surprising things to me in my 30 years of practice is how many times the memory institutional memory of businesses and the memory of individuals changes depending on where they're sitting in a particular dispute um or you know you may have a contract with a business um or an employee the employee may pass away the business may go out of business or be sold you're dealing with a new owner and they may not know what the discussions were years ago and this relationship started they're going to look at the written record and they're going to assert what rights they believe they're entitled to in that regard another specific contract issue that relates to uh profit and nonprofit businesses deals with purchase orders and invoices um law wants to facilitate Business Without as Trying to minimize the paperwork between particularly between two businesses for example again if you're buying office equipment or copy paper or you're getting someone to enter into a contract to service your website or computer system you don't have to have an overall written agreement one thing that can happen is you can send in an order for office equipment the supplier may send you back invoice and says fine we'll provide this equipment we're going to deliver it in 30 days here are the terms and all those terms including the fine print on the back of the invoice that the supplier sent back to you may may govern the relationship under the law even if they differ from the order that you initially sent so you need to look at the small print or or take the risk that you're going to be subject to terms that you didn't realize within another thing we commonly actually advise clients about including nonprofits deal with the ownership of written work product we represent some U trade associations and some nonprofits that buys businesses and trade associations who create for example policy manuals standards industry standards trade standards or standards manuals and for example you know we have clients where they want all the members of the trade Association to be able to use the manuals but they want to control for Quality reasons primarily the contents of the so it's very important to put in writing what rights the trade Association members have uh in regard or don't have in regard to modifying the manuals similarly when you create the manuals it's very important to put in writing who's going to own the work product both with your employer employees although frankly it's a bigger issue if you have a contractor consultant that you hire for that specific project of creating the manual but they're not your employee you should document who you know that you're going to own you own the you're paying for the work product and you own it particularly in the case of a contractor or consultant if you don't do that you may end up with a situation where you own it jointly with uh the contractor where you can use it but also the contractor can use it can license it can modify that's in our experience uh not the situation that nonprofits want when they're trying to promulgate industry or trade standards let me talk about some overall General does and don'ts and Contracting uh not specific to any kind of contract first and foremost well first one is know who you're doing business with it's it's very easy you probably know this how much information you can find out with a simple internet search when you're about to sign a contract with a supplier or particularly with a consultant who's going to maybe develop your website or draft your manual um you can look up any product complaints prior businesses you can look up prior lawsuits I had a personal situation in anecdote relevant to this where we had a we suffered through a house fire and had to rebuild a portion of the house and the insurance adjuster initially gave me a recommendation of the contractor who they had dealt with I looked at the lawsuits and provided the the insurance adjusted with a literally a one-inch thick list of lawsuits the contractor had been involved invol with it must have been every single job contractor had ever done because it was so voluminous and needless to say the insurance adjuster backed off that recommendation um related to that be be sure particularly when you're doing a written agreement you have the proper name of the parties all in the agreement um because once if the if the C gets in the ditch and there's a dispute and it's uncertain or unclear the other side may try to take advantage read the agreement in full uh again try to consult with an attorney if it's a significant contract read the agreement in full be sure you understand all of the terms if you use terms of art or industry terms be sure they're defied again you may think you have the same you and the other side have the same understanding at the onset of the relationship but people's understandings may change they may legitimately forget or again a new owner may come into the business and have a different understanding or once it dispute arises want to Advocate a different understanding and if if the term is not defined in the agreement they may have that legal and use plain English in general and definite terms uh avoid ambiguous terms um you know there's uh litigation in any situation if you're paying an attorney is costly there's a great New Yorker cartoon of an attorney and her wood pandal office that she says to the client you have a great claim now how much Justice can you afford and so it's expensive anyway it's time consuming there's a lot of emotional involvement and emotional cost in litigating a dispute and you certainly don't want your attorney spending time having to debate over a term that you thought was clear or under everybody knew what it meant uh and there's a positive aspect to this as well Georgia in general the legal principle is Georgia enforces contracts and Georgia expects the Contracting parties to exercise due diligence read the contract again make sure what the consideration again as I said at the start courts will not um second guess whether the value given for the agreement is adequate the expect the parties to make that decision and live with it and consistent with that when if a dispute does go to court the first place the judge is going to look in interpreting the contract is the four corners of the agreement if it's in writing and if the contract is the judge finds the contract is clear he or she is not going to allow either party to put in other evidence about well I know it says X in the written agreement but we really intended it to be why that's called the parole evidence rule and again it's consistent with the principle that you need to look at the contract make sure you understand it and once you sign it or agree to it you you live with it if however the judge finds that the contract is ambiguous or clear then after taking some other steps the judge will allow in general evidence about what the prior negotiations were what the correspondence was and again that makes the litigation more time consuming costly and the result less certain so I've seen this that's the biggest practical recommendation I think I can make today other than Consulting an attorney is use planning make sure your terms are clear and defin consider uh thinking of disputes the potential for disputes in the future consider requiring in your agreement a provision that requires notice if the other side deems the contract has been breached and you haven't performed your obligation with a a right to cure typically there's a provision when when when these terms are included but the other side has to give you written notice at a specified address and give you sometime often 30 days to cure the breach before they can go to court and assert that the contract has been breached if that provision is there again as I said they may say you haven't performed but until they give you the right to cure there is no legal breach so they can't legally go to courts and you don't want to have the situation where the minute a dispute arises the other side's unhappy you want to avoid the situation where they're rushing to court immediately and starting the litigation process some parties even include a provision that there will be a negotiation before there's a lawsuit some are often now asserting even uh Provisions for mediation which is basically a negotiation with a third party to come in and facilitate the negotiation and of course some parties assert or include U Provisions that if you can't resolve it by agreement then you'll specify what the resolution will be either or the means for resolving the dispute either in arbitration or sometimes both parties agree we'll go to this court to have conduct a litigation consider if the contract is mean is has any significance should there be limits of liability Georgia will enforce certain limits of liability either types of Damages can be excluded or certain conduct can agreed that there won't be a won't be damages for sometimes simple mlig for examp um consider whether you should require the other side to provide insurance for example if they're if they're renovating your office space if they are you know engaging in a long-term contract to maintain your computers system or your website you may want to consider a requirement that they have insurance and if you do have that requirement if you do include it it is common to also include the requirement that they provide proof to you that they have the required insurance uh finally some general don'ts in regard to contracts some of these are simply the flip side of the general dues beginning with don't agree to ambiguous language U if you don't understand what it means you need to try to clarify it and revise that contract language before you sign it and consistent with that do not accept the other side's interpretation of a term that to you is unclear uh because again you could have uh an email exchange about what a term means and then you sign the contract but unless the judge then if there's a dispute if the judge finds it to him or her that term is not unclear the judge is not going to consider again evidence of what the email exchange was before the contract was signed about the meaning so be sure that you don't accept the other side's interpretation oh this means you everybody knows what this means it won't be a problem don't accept that kind of assurance try to avoid redundant terms or Provisions in the contract I've seen this a surprising number of times where people think that well the contract provision is particularly important so it must help if I put it in the contract more than once under the law the judge is to enforce every term of the agreement and some terms are obviously important and the Practical problem with including a redundant term or provision is primarily I mean there's a couple of things but the primary one I want to mention is that unless you describe it in exactly the same way if the language varies then that gives the other side room to argue that the term or provision means something other than what you thought it meant it's consistent with again avoiding unclear terms you would be surprised how much time and energy and expense goes into litigating the meaning of single terms or even single words in a contract the placement of a comma Etc don't sign agreements this is another significant practical pointer do not sign agreements where with blank terms are missing parts a lot of times in agreements for example I've litigated a lot of software support contracts and software licenses and in those agreements a lot of the meat of the agreement is in an addendum or attachment it's called various things attachment addendum exhibit and sometimes again you've negotiated a contract for a long time you need to get the system in place you trust the other side and they say well if you need it let's just sign this you know what the system's going to be we'll send you the addendum next week you sign it the addendum comes you don't read it you put it in the file lo and behold it says something different than what you intended frankly what you agreed to that has happened for innocent reasons or sometimes you know the denim's never sent and you just continue down this path and then disputer Rises and you don't have the attachment um so be you know if you can insist on that the blank terms be filled in that the addenda be provided the exhibits be provided so again you know what your sign so that concludes my practical pointers about the dos and don'ts and Contracting if you have any questions I'd be glad to answer we have a few questions we think are coming so we'll wait a minute I'll try to address it right proon partnership you can certainly talk to proon partnership uh about that kind of service I think proot partnership provides that on a regular basis and that raises a very good question that it is a very good question and raises a a point it is good to review your contracts particularly as you get to a significant size where maybe you have multiple Supply contracts or multiple employee contracts with employees the law does change Georgia recently changed for example the law about non-c competes to generally make them more easy to enforce than they used to be uh so it's good to review your contracts annually and you know make sure that the provisions that you think are good law are still good law the next and there was a question about whether prono partnership prep prepares memor of understanding for nonprofits and yes pron a partnership on a regular basis does provide or help draft both memoranda of understanding on the actual contracts for the nonprofit cents um the question was when a contract uh is signed do all pages have to be initialed um the answer is no um certainly sufficient if both parties sign and in fact again consistent with what I said at the beginning you can have situations where you have the written agreement and no party signed it but it ends up being an enforcable contract because you started performing it Etc or one party sign then in those cases there may be a dispute about U do the terms of that written contract govern because both parties didn't sign it or were there some other oral termes but to go back to the initial question question to legally enforce it you do not have to have you do not have to have each page initial but a lot of people are now recommending that you have both parties initial every page um because uh in this day when you can change Pages U on the computer fairly easily and sometimes contracts are stored electronically and you are seeing more and more cases it used to be you never hardly ever saw that but you are seeing cases now where the party that's you know as a general trying to escape the obligation and saying that some page was modified um and therefore the contract is not enforceable against them so a lot of people are now recommending that you initial each page a related point is um and I've always done this sometimes you'll have a written agreement and then you will make at the last minute well you either you had some final tweak to the terms or the contract didn't accurately State the terms so you'll make when you get together a handwritten change to the contract uh I would recommend you have both parties initial that handwritten change so again there's no argument that well I signed the hand the typed contract and then they went back and and made that handwritten change um yeah their question was whether a written agreement that is in handwriting on a napkin can be enforced uh yes it can in two different ways first you can sign a handwriting agreement even a napkin or piece of paper uh and that can be an forceable agreement second uh you can have a situation where what the party wrote on the napkin is not and as we talked about at the start absent the certain exceptions that Georg of law has oral agreements can be enforced um and then they can site to that that napkin as evidence some evidence of what the terms were being discussed at the time even if it's not the entire or not standing a case for the band The Black Crows where someone who used to be in management there was in fact a napkin and there was a pie and they there was a division of of the proceeds what they said was what the plaintiff said was a pie chart to divide the proceeds from uh the upcoming album even though my recollection I wasn't involved in this but my recollection was that mat didn't specify that but that went all the way through trial uh that case all right well thank you uh and have a good day