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Contracts are part of everyday operations for many not-for-profits. It’s important to know what issues to look out for when signing on the dotted line.
Although your organisation may not have much power to negotiate when signing contracts, especially standard form contracts, there are some key principles to consider. If a contract is too risky, your organisation can always choose not to sign.
If your organisation is not incorporated, an individual will normally be required to sign a contract of behalf of the unincorporated group. This can mean that the individual is personally liable for rights and obligations under the contract. If this has become an issue, your group should consider incorporating. For more information go to our page on The Incorporation Decision.
For more detailed guidance on contracts, see our fact sheet on understanding contracts below. This guide includes information on:
- general principles of contract law
- reviewing a contract and approval processes for contracts, and
- specific types of contracts
The fact sheet below explains consumer guarantees contained in the Australian Consumer Law (ACL) and how they apply to not-for-profits.
Certain community organisations may argue that a term of a standard form contract is 'unfair'. If this can be demonstrated, the organisation may seek for the term to be void, that is, not valid or legally binding. The fact sheet below outlines:
- who is covered by the Unfair Contract Term protections?
- what is an unfair contract term?
- what do you do if you think a term in your contract is unfair?