Working with other organisations

Why should we write it down?

These are the benefits of entering into a formal relationship (which is set down in a written document) with another organisation.

1. By discussing the project and the nature of the parties' relationship at an early stage, the expectations of each party should become clearer and differences of opinion will be brought to light and dealt with. Simply by going through the process of formalising the relationship and negotiating various matters, you will gain some idea as to whether collaboration with the other organisation will actually work.  It is better to find this out at the beginning of a relationship as opposed to jumping straight into a project, only to discover that a relationship is unworkable!
2. The formalised relationship (the written document) will act as a reference point for the parties for the duration of the relationship, both generally and in times of disagreement. 

It is incorrect to think that 'if we don’t write it down, we can’t be held responsible'. The courts can and will recognise an oral (verbal) agreement between two organisations as constituting a legally enforceable contract, and will enforce the terms of an oral agreement. One of the benefits to writing the agreement down is that you will have clear evidence of what each party agreed.

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Checklist: Things to consider before signing an agreement with another organisation

This checklist sets out some of the important considerations a Victorian not-for-profit community organisation should consider before entering into any agreement with another organisation.

What kind of agreement should we choose?

This is a difficult question. There are multiple ways in which a relationship between your organisation and others may be formalised and documented. Some of the ‘names’ for agreements that are commonly used in the not-for-profit sector include:

• Auspicing agreement;
• Protocols;
• Memoranda of Understanding;
• Joint Venture Agreements;
• Alliance Contracting; and
• Partnering Arrangements.

These terms are often used loosely and interchangeably which adds to the confusion and makes it even more important to clarify what you mean by recording the arrangement in writing.

Which one will be appropriate for your organisation will be heavily dependent on the circumstances of the agreement, the nature of the project or activities, the parties involved and the intention of the parties to create a legally enforceable contract (or not).

However, it is important to remember it is not what the agreement is called that determines the relationship between the parties, but the terms of the agreement (what is actually written down) and the intention and actions of the parties. Your organisation should get legal advice to ensure it understands any obligations that will arise under an agreement it intends to sign.

Resources

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