Written agreements between parties working together are essential considering the complexity of relationships, products and services in the waste and recycling industry.

 

A contract or agreement that has been well drafted and is considered fair by both parties will provide the basis for a strong working relationship.

 

An agreement that has vagaries, omissions or clauses that one or both parties believe to be inequitable will create a less productive working relationship, in particular if the clause is tested.

 

The key to a successful contract begins a long time before the signatures are scribed. Preliminary research by the buyer and comprehensive noting of inclusions and exclusions for a final contract document, which may first manifest as a tender specification, is key to a good foundation.

 

Follow this with an opportunity for both parties to have input into the final contract documents and a final check of wording for errors and perhaps also clauses that are ambiguous and could be worded better to the benefit of both parties.

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Ongoing management of the contract should be included in the contract and be followed correctly but flexibly with regards to the overall objectives of the contract. This may include meetings, reviews, reports or provision of other documents. “Set and forget” is no longer a consideration with the rate of change we are experiencing.

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• Build a good foundation for the contract by conducting extensive research on other similar contracts. Which clauses have they included or excluded? What did they seek in tenders? Were they successful in reaching objectives? How were they managed from day to day? Know what your own organisation’s objectives are and get feedback from internal stakeholders also, earlier rather than later. Consult with potential parties to the agreement by asking what they would like to see included or excluded.

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• Procure diligently by providing the proposed contract to bidders or the other party, which may be a list of sections included with tender documents. In the tender submission process, seek specific feedback on clauses of concern so that risks are clearly assigned any future problem can be removed as decided.

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• Negotiate in an informed and practical manner  so that the contract prepared for signing is acceptable to both parties. Of course, a tender process may require that bidders be directed that clauses must remain, but it is best for both parties if changes that are valuable for both parties (or perhaps just the buyer) are made. For this to occur the contract clauses must be reviewed from several angles including legal, risk, internal compliance, operational, administrative and strategic. Unlikely legal scenarios may have to be compromised to allow for a valuable practical outcome, for example. 

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• One final check before signing will allow for both parties to find typos, issues with changes made or clauses that could be clarified. Take the time to get it right for signing. Once the contract is signed it should provide an excellent roadmap for ongoing management of the contract rather than filing it and never using it again.

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• Establish a project management plan based on details in the contract for service timelines, milestones, resources, meetings, documents required and reporting. Contract clauses can be used verbatim to develop software/spreadsheets to monitor the contract.

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• Manage to the benefit of both parties – if one party feels as though they are being treated unfairly with regard to any particular part of the contract, it is likely they will reduce their enthusiasm for the whole contract and service quality may suffer. However, if the parties to the contract focus first on ensuring that both parties are having their core needs met over dwelling on minor contract blemishes, the contract relationship will be more productive for both parties.

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