Contracts FAQ


Q: Why have contracts?
A: A properly drafted contract reduces the chance of misunderstandings at a future date and helps protect the rights of the parties to the business transactions. When the parties have expressed their agreement in a complete unambiguous writing, the writing is the best evidence of their intent. The written document also provides an audit trail and authorizes the use of public funds in payment of invoices for business transactions conducted on the campus.

Q: Can a Dean, Department Chair, Director, Professor, or Principal Investigator sign a Contract?
A: No. The Board of Regents has delegated to each Chancellor the authority to execute certain contracts on behalf of the Board. The Director of Materiel Management is the campus official with contracting authority for Business Contracts.

Q: Can work or services be engaged before a contract is executed?
A: No. Work may only commence once the Director of Materiel Management executes the contract. This means that services may not begin if all parties have not sign the contract. Once the contract is signed by both parties it is then fully executed and work can begin.
Working without a fully executed contract is taking a risk that may result in financial losses. Financial losses could result from failure to collect monies owed if work is performed before the contract is signed. In the event the University tries to collect monies owed, there is the risk of damaging future business relations in addition the time lost due to collection attempts.
Insurance companies and the University’s Self-Insurance Program are obligated to cover liability claims in a contract situation only if the contract is properly executed prior to a loss occurring. In the event that the other party does not have sufficient resources to pay a judgment or settlement, our campus may be held responsible for paying all or part of those costs, in addition to whatever costs are incurred by the University in defending the claim.

Q: Can the other party’s contract be signed as is?
A: In many cases contracts include "boiler-plate" language (text that is or can be reused without being changed much from the original) that provides protection only for the party that drafted the agreement, and may also include provisions that don’t apply to a particular business transaction. Contracts are often drafted by private parties that include provisions that are not acceptable when contracting with the University, as a public entity, or when language does not comply with either the Standing Orders of the Regents or University polices.

Q: Why do I have to go to the trouble of getting an agreement signed and exchanging insurance certificates?
A: If there is a claim, the absence of a contract makes determining liability difficult. It is safer to know at the outset of an arrangement what the limits of liability are rather than waiting until there is a claim.

Q: Why do changes to the fully executed contract have to be in Writing?
A: To be binding, changes must be in writing and signed by duly authorized representatives or agents of both parties. This documents the change, provides clarity and will be binding should problems arise.