Top10 Tips for Negotiating a University Contract

							              Top10 Tips for Negotiating a University Contract

This one may seem obvious but many times university administrators skim the fine print in
1. Read The Contract.

their contracts, assuming that someone else will look into these issues during the routing
process. As the contract administrator, you are responsible for knowing all of the contract
terms, so go ahead and read those indemnification and choice of law provisions. If you’re
not sure what a particular term means, check the General Counsel website or contact the
General Counsel’s Office for assistance. As you get more familiar with contract terms, it will
become easier for you to spot potential issues in advance, which can mean a smoother,
shorter review period for the contract.


The revised Contract Approval, Signatory and Reporting Policy is designed to give ISU
2. Read The ISU Contract Policy.

faculty and staff guidance on how to properly execute an ISU contract. The policy will tell
you who needs to approve the contract and who should sign the contract. It’s important to
be familiar with this policy so that you are always in compliance and can avoid delays in
executing a final contract.


Lawyers (and others) will include references to attachments in a contract. These can be
3. Where Are The Attachments?

called Schedules or Exhibits and are intended to be incorporated as major contract terms.
Watch out, though, because many times schedules, exhibits, attachments will not come with
your contract, and you don’t want to be caught off guard with the addition of terms later.
The contract routing process requires all attachments to be included with the main
contract, so to avoid delays, be sure to include all of your attachments with the routing
form.


Don’t assume that you have an “understanding” with a third party about terms that are not
4. The Contract Is The Thing.

in or contradictory in your contract. Verbal agreements outside of the written contract will
probably not be enforceable, so if it’s important to you, make sure it’s in the contract
correctly.


Because ISU is an Indiana institution of higher education, we have certain statutory
5.       Know Your Limits.

limitations when it comes to binding ISU to contractual terms. In addition, the Contract
Approval, Signatory and Reporting Policy has certain limits on signatory and approval
authority.

     •   No contract should be over 4 years without the approval of the Board of Trustees.



Top 10 Tips for Negotiating a University Contract
ISU Office of the General Counsel
February, 2010
         Certain construction contracts must have approval by the State of Indiana before
         they can be executed.
     •

         ISU has statutory limitations on its ability to indemnify third parties.
         Any non-budgeted contractual expenditures must have the approval of the ISU
     •

         Treasurer before the contract can be signed.
     •



Indemnification is one of those words that makes a non-lawyer’s eyes glaze over, but it’s
6.       Indemnification Can Be Your Friend.

important to be aware of when it is appropriate to ask a third party to indemnify ISU and
when ISU can indemnify a third party. Indemnification refers to a promise to compensate
another party for a loss. ISU can only indemnify a third party when we have an insurable
interest and insurance to cover a loss. ISU should request indemnification when actions by
the third party could result in damage to ISU property or injury to ISU students, faculty or
staff members. If you have questions about whether or not to ask for indemnification in
your contract, please contact the General Counsel’s Office.


Routing the contract properly protects you, it’s as simple as that. Compliance with the ISU
7.       Route The Contract Properly.

contract policy means that you have routed the contract appropriately and that an
authorized ISU administrator has signed the contract. It’s your job as the contract
administrator to ensure that these steps have taken place. As always, if you have questions,
please be sure to contact the General Counsel’s Office.


The routing process always includes a review of the contract by Risk Management. Risk
8.       Insurance, Insurance, Insurance.

Management identifies any insurance issues to make sure that ISU and the third party has
appropriate coverage’s in place. This review is especially important for third parties who
are visiting campus or with ISU students in off-campus or clinical or internship
experiences.


While ISU contracts are always in the name of the University, as the contract administrator,
9.       Take Ownership Of The Contract.

you are responsible for administration of the contract and the business and legal
requirements in it. This means that once a contract is signed, you should continue to
monitor to make sure that both ISU and the third party are in compliance with the terms.


The General Counsel’s website has information about authorized signatories, the routing
10.      If You Don’t Know, Ask!

process and other contract process information. But we understand that may not cover it. If
you have a question or are just not sure what a particular contract term will mean, please
contact the Office of the General Counsel and we’ll be happy to discuss the issue with you.



Top 10 Tips for Negotiating a University Contract
ISU Office of the General Counsel
February, 2010