Q: What should ministry leaders know about contracts?

A: Ministry leaders should review the rights and responsibilities of the ministry in any contract.

Ministries have a significant opportunity to control risk when they enter into contracts. Taking a proactive approach to managing legal risk when contracting helps ministry leaders to be good stewards of the resources entrusted to them.

Key Contract Components

Ministry leaders should be familiar with the rights and responsibilities of the ministry in any potential contract. They should also be familiar with basic contract terminology. Key contract components that have an impact on a ministry include:

• Performance dates
• Insurance requirements
• Hold Harmless and Indemnity clauses
• Waiver of Subrogation
• Warranties
• Default/termination clause

It’s important that ministry leaders have an attorney review any contract before they sign it. The assistance of a competent insurance agent is also valuable, because contracts often have an impact on insurance coverage.

Recommended Resources

If you found this information helpful, you might be interested in these other resources from Brotherhood Mutual:

• Learn how to Avoid One-Sided Contracts.
• Read our article, How to Examine a Contract.

More Questions?

Do you have a question that wasn’t covered in this article? Submit your question to Brotherhood Mutual’s Legal Assist team.

This information is intended to be helpful. However, it is not legal advice, and reading it does not create an attorney/client relationship. Every circumstance is different, and an organization's rights and obligations vary by jurisdiction. That's why we strongly encourage you to regularly consult with a local attorney as part of your risk management program. 

The information is accurate as of the date of publication; however, changes in law or regulation over time may affect the accuracy of the information presented.