1. The Law of ContractsThe Law of Contracts
Theory, Processes, ProceduresTheory, Processes, Procedures
By Michael Burr, JD
2. 22
BriefingBriefing
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Some DefinitionsSome Definitions
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Types of Contracts.Types of Contracts.
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Signature AuthoritySignature Authority
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Specific ContractsSpecific Contracts
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Affiliation & Agreements.Affiliation & Agreements.
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Other StandardsOther Standards
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Additional RoutingAdditional Routing
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EmployeesEmployees
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Post-agreementPost-agreement
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DefinitionsDefinitions
CONTRACT is an agreement between twoCONTRACT is an agreement between two
parties that creates an obligation to perform (orparties that creates an obligation to perform (or
not perform) a particular duty. A legallynot perform) a particular duty. A legally
enforceable contract requires:enforceable contract requires:
1.1.OfferOffer
2.2.AcceptanceAcceptance
3.3. ConsiderationConsideration
44. Detriment. Detriment
4. 44
Offer and AcceptanceOffer and Acceptance
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A legally recognized offer and an acceptanceA legally recognized offer and an acceptance
creates a “meeting of the minds’, or mutualcreates a “meeting of the minds’, or mutual
assent, between the parties.assent, between the parties.
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Mutual Assent requires the presence of theMutual Assent requires the presence of the
following factors:following factors:
1.1. Both parties must show a “contractual intent”Both parties must show a “contractual intent”
2.2. The terms of the offer must be clear and definite;The terms of the offer must be clear and definite;
3.3. The acceptance must be clearly communicated.The acceptance must be clearly communicated.
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RequirementRequirement
Clarity:Clarity: For terms to be legally valid, aFor terms to be legally valid, a
reasonable person must be capable of readilyreasonable person must be capable of readily
understanding them.understanding them.
Four primary areas in determining definiteFour primary areas in determining definite
terms:terms:
1.1.The parties;The parties;
2.2. Time for performance (term or serviceTime for performance (term or service
schedule);schedule);
3.3. The price; andThe price; and
4. Subject matter or scope of service.4. Subject matter or scope of service.
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Consideration:Consideration:
TThe “Bargained Exchange.”he “Bargained Exchange.”
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Consideration must be mutual. Both partiesConsideration must be mutual. Both parties
mustmust receive something of value.receive something of value.
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Involvement of money is not required.Involvement of money is not required.
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Contracts vs. GiftsContracts vs. Gifts
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Types of Academic ContractsTypes of Academic Contracts
Affiliation andAffiliation and
International ProgramInternational Program
AgreementsAgreements
Athletic-Specific, orAthletic-Specific, or
Student-SpecificStudent-Specific
Contracts (non-Contracts (non-
procurement in nature).procurement in nature).
Entertainer/ArtistEntertainer/Artist
AgreementAgreement
Interagency CooperationInteragency Cooperation
Agreements (IAC) &Agreements (IAC) &
Inter-local AgreementsInter-local Agreements
Museum and ExhibitMuseum and Exhibit
AgreementsAgreements
Participant/SpeakerParticipant/Speaker
AgreementAgreement
Procurement Contracts;Procurement Contracts;
Vendor ServicesVendor Services
Service Agreements (forService Agreements (for
individuals not organized asindividuals not organized as
a business)a business)
Sponsored ResearchSponsored Research
Contracts and SponsoredContracts and Sponsored
ProjectsProjects
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Signature AuthoritySignature Authority
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President-Delegated AuthorityPresident-Delegated Authority::
1.1. V.P. for Business AffairsV.P. for Business Affairs
2.2. Associate V.P. for AdministrationAssociate V.P. for Administration
3.3. Associate V.P. Financial AffairsAssociate V.P. Financial Affairs
4.4. V.P. for Research.V.P. for Research.
All financial and non-financial Sponsored Project andAll financial and non-financial Sponsored Project and
Research contracts are negotiated/signed by the OfficeResearch contracts are negotiated/signed by the Office
of Contracts and Industrial Agreements (OCIA) .of Contracts and Industrial Agreements (OCIA) .
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Service AgreementService Agreement
Used for services from individuals or otherUsed for services from individuals or other
entities not formally organized as a business.entities not formally organized as a business.
Small dollarSmall dollar
After the Fact PurchasesAfter the Fact Purchases
Details of Service AgreementDetails of Service Agreement
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Participant/Speaker AgreementsParticipant/Speaker Agreements
Used for speakers, lecturers, or to provideUsed for speakers, lecturers, or to provide
compensation to individuals participating incompensation to individuals participating in
formal events.formal events.
Used to contract with individuals or otherUsed to contract with individuals or other
entities not formally organized as a business.entities not formally organized as a business.
Small dollar (usually below USD 5,000)Small dollar (usually below USD 5,000)
Details of Participant/Speaker AgreementDetails of Participant/Speaker Agreement
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Interagency & InterstateInteragency & Interstate
AgreementsAgreements
Interagency: Contracts with other stateInteragency: Contracts with other state
agenciesagencies
Interlocal: Contracts with municipal, county,Interlocal: Contracts with municipal, county,
and local government entities (also includesand local government entities (also includes
political subdivisions of the state, such aspolitical subdivisions of the state, such as
school districts).school districts).
Exempt from Competitive Procurement: ValueExempt from Competitive Procurement: Value
can exceed $5000 (with certain exceptions).can exceed $5000 (with certain exceptions).
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Routing of AffiliationRouting of Affiliation
Standard Routing FormStandard Routing Form
Non-Standard AgreementsNon-Standard Agreements
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Routing of Misc BusinessesRouting of Misc Businesses
Service, Participant, Entertainer, & InteragencyService, Participant, Entertainer, & Interagency
AgreementsAgreements
Standard Routing FormsStandard Routing Forms
Academic & Non-AcademicAcademic & Non-Academic
VPSA RoutingVPSA Routing
U.S. Entity vs. Non-U.S. EntityU.S. Entity vs. Non-U.S. Entity
Modifications to Standard AgreementsModifications to Standard Agreements
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After-the-Fact on a POAfter-the-Fact on a PO
(1)(1) Disbursements willDisbursements will notnot pay After-the-Facts onpay After-the-Facts on
a PO.a PO.
(2)(2) Services or Goods Secured Prior to ExecutedServices or Goods Secured Prior to Executed
Contract.Contract.
(3)(3) Audit ExceptionAudit Exception
(4)(4) Requires Service Agreement (Routed asRequires Service Agreement (Routed as
Described Above).Described Above).