SA1030 - Legal Contract Review and Submission Process Training

What You Need to Know about Contract Law CONTRACTS 101 What You Need to Know about Contract Law

What is a Contract? A contract is an agreement with specific terms between two or more persons or entities in which there is a promise to do something in return for a valuable benefit known as consideration.

What is a Contract? An offer is a specific proposal to enter into an agreement with another party. Acceptance is an agreement to the terms of an offer. Consideration is something promised, given, or done that has the effect of making an agreement a legally enforceable contract.

What is a Contract? Parts of the Contract The Business Terms + The Legal Terms = The Contract

Business Terms The business terms are typically negotiated by Clean Harbors business people (not the Law Department). The business terms are the terms of the agreement that you have with your customer. It is important to review the business terms of the agreement BEFORE you submit a contract to the Law Department, and if something doesn’t look right, let us know.

Business Terms Examples of Business Terms include: Structure of the deal (prime contractor, subcontractor) Scope of work, schedule, budget, applicable rates Prevailing Wages (Service Contract Act/Davis Bacon Act/State Prevailing Wage) Payment terms – provide Credit and Collections approval Manpower and equipment requirements Subcontractors Special customer requirements Liquidated Damages License Requirements

Business Terms Other special issues to watch out for are: Health and Safety Requirements Including Drug Testing Special Insurance Requirements Background/Security Requirements EEOC Requirements

A Note on Payment Terms When reviewing the business terms, it is important to understand who is responsible for payment, and when the obligation to pay is triggered. A “paid when paid” or “paid if paid” contract links our right to payment to our customer being paid by another party. These are enforceable in many jurisdictions and should always be avoided. A contract should always provide that Clean Harbors has a right to get paid within a specified time period after submitting our invoice, regardless of whether our customer has been paid by their customer.

A Note on Prevailing Wages Prevailing wages are wages and benefits that are required to be paid to employees for certain jobs. Prevailing wages are established by the Department of Labor, as well as State Departments of Labor or their equivalents. In order to determine whether prevailing wages apply to a job, we need to understand what type of work is being performed, and who the work is being performed for. When we are doing work for a government customer, directly or through another contractor, always consider whether the work is prevailing wage! Failure to comply with prevailing wages can result in back payments and penalties. It can also delay payment from the customer. If you are unsure whether prevailing wages might apply to a particular job, confirm with your customer!

Legal Terms The Law Department’s review process focuses on the legal terms. In order to properly evaluate the legal terms, the Law Department needs to have a clear understanding of the scope of work that you are performing, and what you have agreed to with the customer. The Law Department strives for a cooperative environment. We make recommendations on contract language, and will provide guidance and explanations. If your customer does not agree with the Law Department’s recommendations, whether or not to move forward with a particular contract is subject to the approval of an officer of Clean Harbors.

Legal Terms Examples of Legal Terms Include: Indemnification/Hold Harmless Consequential Damages Representations and warranties - Force majeure/excuse of performance Choice of Law/Jurisdiction Exclusivity/Requirement to Perform

A Note on Indemnification Indemnification language in a contract establishes how the risks are allocated between the parties. Some contracts contain indemnification language that requires the company to assume liability for all loss or damage that arises out of the work, even if the customer is at fault. In most jurisdictions, this type of language is enforceable, even if it is unfair. The Law Department always recommends indemnification language that is fair and equitable

A Note on Consequential Damages Consequential damages include things like loss of use and lost profits. They are difficult to predict, and can result in very high dollar value claims. For this reason, in most cases, the Law Department will recommend that a contract include a waiver of consequential damages.

Other Contract Issues Most contracts can be verbal or in writing. However, for our purposes, in order to ensure that all parties are on the same page with respect to a transaction, it is important to have a written contract. In order to establish that a contract has been agreed to by both parties, it should always be signed by both parties. Long term contracts should typically include a right to terminate.

THE CONTRACT REVIEW PROCESS

Always provide your Customer with a Standard Clean Harbors Contract Standard Agreements Always provide your Customer with a Standard Clean Harbors Contract Agreements are available on the Employee Portal, in the Marketing Library. Scope of work specific agreements are available, as well as entity specific agreements. If you are unsure as to which standard agreement applies, contact the Law Department for guidance. If a customer signs a Standard Agreement, no further legal review is needed. Please email a pdf of the signed contract to the Legal Contracts Coordinator.

What Needs to be Reviewed? Any Clean Harbors Standard Agreement that has been changed by the customer. Any contract provided by a Customer, Subcontractor, or Vendor

What Needs to be Reviewed? Other Agreements Reviewed by Legal: Bids/Request for Proposal Equipment Rental Agreement Leases Amendments/Change Orders/ Extensions Purchase Order Terms and Conditions Indemnification and Hold Harmless Agreements Confidentiality Agreements Specialized Labor Agreements

How to Initiate Contract Review Once you have made the determination that a contract needs to be reviewed, you will need to submit it to the Law Department The Law Department has a form on the Employee Portal for this purpose – the Contract Review Transmittal Form (CRTF) Located in the “Forms” section of the Portal Once completed, the form is automatically submitted to the Contracts Coordinator, who will assign the agreement for review When submitting a contract, please include any and all relevant information, including a description of the scope of work, and any specific concerns that you may have. It is preferable to work with a Word document that can be edited to show tracked changes. Please request a Word document from your customer in order to expedite the review process.

Your Responsibilities Before submitting contract for review, you should: Review all business and operations terms Submit relevant attachments to applicable departments Submit Credit Application to Credit and Collections Determine if a contract is associated with the customer file in Beacon

What to Expect During the Review Process After you submit a CRTF, the contract will be assigned to an attorney for review. On or before the due date that you have included on the CRTF, you will receive an email with comments, questions, and/or recommended changes to the contract language. If the Law Department’s review includes questions and comments, please review and address. Your response to our comments and questions may result in additional changes to the contract language, so these should be considered before returning our modification to the customer. Once all comments and questions have been addressed, you will need to return the revised contract to the customer.

What to Expect During the Review Process (cont.) The customer will review our changes, and respond back to let us know what they can and cannot agree to. At this time, please forward the customer’s response back to the Law Department for further review. Sometimes a phone call with the customer is necessary to resolve outstanding issues. The reviewing attorney will work with you and your customer to resolve remaining issues, and come to a mutually agreeable document. Approvals are often needed from an officer of Clean Harbors.

Contract Signature Once a contract has been agreed upon by the parties, it needs to be signed. Clean Harbors has a policy regarding signature of contracts. A Clean Harbors Standard Agreement without changes can be signed by the account owner, a general manager, or a branch manager. Please return a pdf of the signed contract to the Contracts Coordinator. A Standard Agreement that has been changed, or an agreement provided by a customer, need to be signed by an authorized Officer of the company. If you sign a contract when you are not authorized to do so, you are signing the contract personally, and not on behalf of the company. Do not sign anything unless you are 100% sure that you are authorized to do so!

Contract Signature The Law Department can assist with having the contract signed by an authorized individual. You will receive an email from the reviewing attorney letting you know that the document is ready for signature from a legal department. This email will ask you to confirm that all other business and operations terms have been reviewed and approved. You will need to respond to this email in order for the contract to be signed. We cannot release a signed contract without your email confirmation. Once the contract has been signed, the Law Department will return to you or your customer at the address that you provide.

CONTRACT DO’S AND DON’TS

Contract Do’s Always perform work pursuant to a signed contract Obtain signed agreement BEFORE work begins Obtain signed daily worksheets Keep customer informed of changes in scope/job cost Obtain signed change orders

Contract Don’ts Don’t work without a contract (a signed quote is not a contract) Don’t assume the customer has authority to sign, ASK Don’t fax or email copy for signature without T&C’s Don’t approve a multi-year contract without authorization from an officer of the appropriate entity Don’t sign a customer contract that has not been reviewed

Additional References If you have questions about contracts, feel free to contact the Contracts Coordinator or the Law Department attorneys. If you can’t find a Standard Agreement that applies to your services, let us know, and we can work with you to create one. Please visit the Employee Portal for additional support documents and Frequently Asked Questions.