Every year, PTAs enter into a variety of contracts. Whether it is a contract with a fundraising company for a fundraiser, with a bounce house supplier for a fun fair, or a local artist to conduct a workshop at a PTA event, the PTA is entering into a legal agreement and needs to be aware of what obligations it is taking on.

There are a lot of things a PTA should consider or do before signing a contract:

  • Has the membership approved the project or event?
  • Does the president have authorization from the PTA board or executive committee to negotiate a contract? Are there any limits on how far the president may go regarding budget or other contract items during negotiations?
  • Does the PTA have the contract in writing?
  • Does the PTA board or executive committee understand and agree to the terms and conditions of the contract?
  • Do you need the contract reviewed by a lawyer?
  • Is the length of the contract limited to the terms of the current officers (PTA boards are not to encumber or obligate future boards)?
  • Is the contract written with the PTA and not an individual officer?
  • Are there any insurance concerns? Who is legally responsible for injuries? Does the PTA need to contact its insurance provider to get additional coverage for this?
  • Does the PTA need proof of insurance from the company they are contracting with?
  • Will the PTA need to issue an IRS Form 1099 at the end of the year?
  • Are there any concerns or issues regarding the school district that need to be addressed?

If the PTA is ready to agree to a contract, it is the current PTA President who signs the contract on behalf of the PTA (e.g., “Jane Smith, President, on behalf of ABC PTA”). Signing a contract obligates the PTA to meet the terms and conditions of the contract. If a PTA contracts with a band to play at a dance, for example, but ticket sales for the dance are not high enough to pay for the band, the PTA is still obligated to provide full payment to the band. The general membership will need to amend the PTA budget to determine where the additional funds will need to be moved from.