Contract Considerations

Many organisations in the recycling sector continue to rely on informal arrangements for material collection and recycling. Informal arrangements may appear fine if you are not overly concerned about separating and recycling from the waste stream or improving your performance.

Whilst there is no prescribed form for a contract and it can be informal and verbal, a well-written contract can provide better support to protect your interests. Formal contracts have many benefits such as:

• Provision of a secure framework for the supply of goods or services under which all parties are aware of their rights and obligations.
• Allowing organisations to plan ahead with greater certainty.
• Allowing organisations to manage their exposure to shifting markets, e.g. changes in material prices.
• Making parties think about all aspects of their contractual relationship and goals before entering a binding agreement.
• Providing information even when employees change.

You may find it helpful to initially review the details of your current waste disposal contract and note in particular:

1. How often waste is collected
2. How you are charged (e.g. by number of containers, with or without any allowances for levels of fill, or by weight)
3. Whether there is a breakdown between transport and disposal costs
4. Whether there are different charges for different categories of waste so that increased separation could result in lower charges.
5. Whether the contractor is providing information about collection weights / volumes.
6. You may then wish to specify any additional information you would like your contractor to supply to you in future as part of the contract.

Steps to achieving your desired outcome:

Action Points Determine the nature of the contract, eg. product supply contract, service provision contract. Determine who is the client / customer and who is the contractor / supplier and who will draft the contract. Consider any applicable legislation and how this will affect the contract or contract procedure. Decide on specific outcomes e.g. product specifications, tonnages, service levels, duration of contract. Decide how payment for the product or service is likely to be determined, and if this will change during the contract term. Draw up an initial contract (The Waste Resources Action Programme – WRAP has published some model contracts primarily for local authorities but they also contain relevant points for businesses). Determine which elements of the contract are negotiable and which are not. Determine and begin the tender process and treat all applicants equally throughout.

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