The Contract Checklist for Effective Contract Management
Office of Legal Affairs website,
under Legal Topics:
http://legal.uncc.edu/legal-
topics/contracts/contract-checklist
•
The Basics
making sure the fundamental
questions are answered
•
Deal Breakers
knowing which provisions
the University
cannot
accept
•
Risky Terms
knowing which provisions
put the University at risk
•
Common Sense
making sure the contract is
fair & meets the unit’s needs
•
Name of party
•
The University of North Carolina at Charlotte
for its
(Department of
Psychology, School of Nursing, etc.)
•
What is being exchanged/performed?
•
e.g.
Is the university permitting the other party
to have access to records/information?
•
e.g.
Is the university receiving equipment or
materials that could be dangerous or
hazardous?
•
contract
•
agreement
•
memorandum of understanding
•
affiliation
•
grant
•
lease
•
etc. – Anytime the university is agreeing to do
something (including making payment) in
exchange for another party’s action or service
•
Clarity and avoidance of doubt
•
Know who is supposed to do what, when, and how
•
Avoidance of liability
•
Protect yourself, your department, and the
University
•
Enforceability
•
Make sure it’s legally binding
•
Scenario:
Your unit contracts with Most Popular
Speaker (MPS) and sells 2,000 tickets to the event
at $25/ticket. Your unit head signs the contract.
MPS cancels at the last minute. You claim
damages, but MPS asserts that the contract was
void because the unit head had no signature
authority.
•
Result:
Your unit can’t collect damages because
the contract was void for lack of authorized
signature. Your unit must refund the tickets and
absorb the $40,000 loss.
•
List on Legal Affairs website
•
University Policy 603.1
•
Authority must be delegated
in writing
•
Chancellor and VCBA have authority for any
contract
•
Everyone else only has authority for specific
types of contracts, so make sure it falls within
delegated authority
•
Substantive law
•
has to be North Carolina! (or silent)
•
Indemnification
•
“indemnify”
•
“hold harmless”
•
“defend”
•
“release”
•
“waive”
•
Attorneys’ fees/court costs
•
Arbitration
•
cannot be binding!
•
Personal liability for signer (“guarantee”)
•
Non-compete clause
•
No-hire clause
•
Shorten statute of limitations
•
e.g.
must bring claim within 6 months
•
Injunctive relief (irreparable harm)
•
Liquidated damages/cancellation fees
•
Limit other party’s liability
•
Scenario:
Your unit contracts with Vendor to
purchase a Do-It-All Machine for $50,000.
Contract limits Vendor’s liability to the cost of the
Machine. Machine indeed “does it all,” but it also
causes $100,000 in damages to the Machine
Room.
•
Result:
Vendor invokes limitation of liability
clause and pays only $50,000; your unit is
responsible for the remaining $50,000 to repair
the damage.
•
Waiver of trial by jury (G.S. § 22B-10)
•
Confidentiality
•
Need to refer to NC Public Records Act (G.S. §
132-1,
et seq.
)
•
Use of University name/logo/trademark
•
Best efforts/warranty
•
For risky terms
•
Notifies decision-maker that:
•
Legal advises against clause
•
Losses will be paid from signing unit’s budget
•
Keep contract advisory on file with contract
(internal; doesn’t go to other party)
•
Personal identifiers
•
G.S.
§ 132-1.10 & § 14-113.20(b)
•
FERPA/HIPAA
•
Accessible for public records requests?
•
Kept secure (physical and/or electronic) ?
•
E-Verify provision (G.S. § 143-48.5)
•
purchasing contracts
•
Equal opportunity clause
•
added veteran and disability language
•
Business Associate Agreements
•
generally, we don’t sign these (few exceptions)
•
Using University templates
can save time
•
Legal Affairs is
always available!
•
t
o review entire contracts
•
to answer specific questions
•
My contact information:
sarah.edwards@uncc.edu
7-5407
Learn how the contract checklist can be your best friend in ensuring clarity, avoiding disputes, and protecting your university's interests. Discover the basics, when to use the checklist, why it's essential, and real-life scenarios to grasp its importance fully.
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Presentation Transcript
The Contract Checklist: It Really Is Your Friend! October 16, 2014 Sarah O. Edwards Assistant General Counsel
Office of Legal Affairs website, under Legal Topics: http://legal.uncc.edu/legal- topics/contracts/contract-checklist
Topics Well Cover The Basics making sure the fundamental questions are answered Deal Breakers knowing which provisions the University cannot accept Risky Terms knowing which provisions put the University at risk Common Sense making sure the contract is fair & meets the unit s needs
The Basics Name of party The University of North Carolina at Charlotte for its Psychology, School of Nursing, etc.) (Department of What is being exchanged/performed? e.g. Is the university permitting the other party to have access to records/information? e.g. Is the university receiving equipment or materials that could be dangerous or hazardous?
When should I use the contract checklist? contract agreement memorandum of understanding affiliation grant lease etc. Anytime the university is agreeing to do something (including making payment) in exchange for another party s action or service
Why should I use the contract checklist? Clarity and avoidance of doubt Know who is supposed to do what, when, and how Avoidance of liability Protect yourself, your department, and the University Enforceability Make sure it s legally binding
Example Scenario: Your unit contracts with Most Popular Speaker (MPS) and sells 2,000 tickets to the event at $25/ticket. Your unit head signs the contract. MPS cancels at the last minute. You claim damages, but MPS asserts that the contract was void because the unit head had no signature authority. Result: Your unit can t collect damages because the contract was void for lack of authorized signature. Your unit must refund the tickets and absorb the $40,000 loss.
Signature authority List on Legal Affairs website University Policy 603.1 Authority must be delegated in writing Chancellor and VCBA have authority for any contract Everyone else only has authority for specific types of contracts, so make sure it falls within delegated authority
Deal breakers Substantive law has to be North Carolina! (or silent) Indemnification indemnify hold harmless defend release waive Attorneys fees/court costs
Deal breakers Arbitration cannot be binding! Personal liability for signer ( guarantee ) Non-compete clause No-hire clause
Risky clauses Shorten statute of limitations e.g. must bring claim within 6 months Injunctive relief (irreparable harm) Liquidated damages/cancellation fees Limit other party s liability
Example Scenario: Your unit contracts with Vendor to purchase a Do-It-All Machine for $50,000. Contract limits Vendor s liability to the cost of the Machine. Machine indeed does it all, but it also causes $100,000 in damages to the Machine Room. Result: Vendor invokes limitation of liability clause and pays only $50,000; your unit is responsible for the remaining $50,000 to repair the damage.
Risky clauses Waiver of trial by jury (G.S. 22B-10) Confidentiality Need to refer to NC Public Records Act (G.S. 132-1, et seq.) Use of University name/logo/trademark Best efforts/warranty
Contract advisory For risky terms Notifies decision-maker that: Legal advises against clause Losses will be paid from signing unit s budget Keep contract advisory on file with contract (internal; doesn t go to other party)
Data/information Personal identifiers G.S. 132-1.10 & 14-113.20(b) FERPA/HIPAA Accessible for public records requests? Kept secure (physical and/or electronic) ?
Recent additions E-Verify provision (G.S. 143-48.5) purchasing contracts Equal opportunity clause added veteran and disability language Business Associate Agreements generally, we don t sign these (few exceptions)
Final thoughts Using University templates can save time Legal Affairs is always available! to review entire contracts to answer specific questions My contact information: sarah.edwards@uncc.edu 7-5407
