Key Terms in Waste Management Contracts
Waste management contracts can be intimidating for some but in this article, we are here to help! Take your time to review a few of these key terms and you’ll be better off in the long run.
Automatic Renewal – This is usually one of the main reasons people contact Wastemaster. Often times they find themselves stuck in a long term agreement and have missed the very short window of time necessary to notify their hauler of their plans to cancel or modify the exising terms. Wastemaster recommends striking out the automatic renewal language in ALL waste services contracts. This will help avoid the costly mistake of allowing your hauler to continue to raise rates while you wait for the agreement to expire.
Understanding Pricing and Fees
Fixed Price Contracts – This is a myth! It is very rare to see a fixed price agreement in the waste industry. In fact it’s quite the opposite. Some of the big industry players specifically write into their agreements that “this is not a fixed price agreement and you should expect your rate to increase.” However, most people don’t read the fine print and realize after it’s too late that what seemed to be a competitive rate has now turned into something that is not sustainable.
Negotiating Waste Management Contracts
Annual price increase limits – This is very important to negotiate up-front before signing any waste management contracts. If left open-ended, the waste hauler can and will raise the price at a rate much higher than inflation. Don’t be afraid to have this conversation with your waste hauler. Specifically write into your agreement a cap or maximum amount the annual price can increase. Without this, you are setting yourself up for an unpleasant surprise.
Common Pitfalls to Avoid in Contracts
Read the fine print – Waste haulers have recently shortened their contract language and it’s actually become a little easier to identify some of the common pitfalls. Focus on the overall term of the agreement so you don’t get locked into something that works against you. Focus on managing price escalators so you can manage your finances. Finally, NEVER sign the waste hauler “boilerplate” agreement. This is usually written in favor of the hauler and NOT you. Don’t be afraid to make edits.