What to Look for in a Contract: Helping Yourself and the University

For practical reasons, if you are the originator of the contract or if you will be working under the contract once it is finalized, it is important that you thoroughly review it and understand its terms prior to submission to the General Counsel's office for legal review or to the authorized contracting officer for signature. Because of your knowledge of the transaction, expectations, obligations, services to be provided, and other pertinent information, you are in the best position to assure that the University is "getting what it paid for" under the contract.

Before sending a contract on to the General Counsel's office or on for execution, ask yourself the following questions:

  • Does the contract contain all of the elements of the "deal"? Have you reviewed all of the negotiations and the exchange of documents between the parties (Request for Proposal, responses, marketing materials) to determine that the contract includes all of the terms and conditions? Consider:
    • What each party is to do and receive;
    • Rights and duties of each party;
    • Assurances;
    • Performance (details and conditions);
    • Consequences of nonperformance;
    • Duration;
    • Changes (parties, obligations);
    • Resolving disputes;
    • Goals of a project (schedule/time, budget/cost).
  • Does the language and scope of the contract reflect what you negotiated?
  • Does the contract represent a good deal for your department and/or the University?
  • Is the contract consistent with Board of Trustees and University policies and procedures?
  • Can your department ensure your department's compliance with the contract?
  • Can other departments ensure their compliance with the contract? For example:
    • Accounting for reimbursement, billing or payment;
    • Risk Management for insurance requirements or indemnification and risk allocation;
    • Human Resources if there are unusual employment requirements (independent contractors versus employee).
    (If other departments are involved, you should coordinate your efforts with them to ensure compliance.)
  • Does the contract contemplate what would happen if one or the other party breaches the contract or defaults on a term or condition?
  • Does the University have the right to terminate the contract before the normal end date of the contract?
  • Have you considered how the contract will end or terminate?
  • Contracts are not "just for the lawyers". It is your agreement. In reviewing the agreement, emphasize the reasons and risks not necessarily the language.
    • Standard terms can be a good idea when used by the University. "Standard terms" are usually someone else's standard terms.
    • Anticipate that the other party will often claim that it has no authority to negotiate-parties will change things or negotiate terms if you are reasonable and know and explain why.
  • Remember that good contract drafting practices parallel good business decision-making practices.
    • Contracts define the problem, question and goal.
    • Contracts document the implementation, the plan for action, and the plan for deviations.
    • Contracts identify what should happen (and what to do if it does not).
  • Recognize the time pressure for contract review.
  • Above all, reviewing and identifying concerns about the agreement before sending it on for review in the General Counsel's office or to the contracting officer for execution ensures that the contract reflects the bargain that was struck between the University and the other party.