Printed on: 08/20/2018. Please go to http://policy.umn.edu for the most current version of the Policy or related document.

ADMINISTRATIVE PROCEDURE

Entering Into Contracts

General Overview

  • Using a Contract in the Standard Contracts Library or an OGC pre-approved template
  • Using a Non-standard Contract
  • Contracts for Purchasing, International, and External Sales

I. Using a Contract in the Standard Contracts Library or an OGC-pre-approved Template

  1. Review the contract. Carefully review the business terms of the contract to confirm that it reflects the terms and conditions you expect.
  2. Obtain authorized signer approval of business terms. An individual with expressly delegated authority in the President's Delegations of Authority Library may approve the contract.

II. Using a Non-Standard Contract

Note: Vendors, purchasers, and other contract parties often ask us to sign their standard contract, or to change our standard form. In that case, inform the party that the University is a constitutional function of the State of Minnesota. Therefore, certain laws and regulations apply to our agreements that don’t apply to commercial enterprises. That is, generally, commercial entities can simply decide what terms and conditions they want to accept; we cannot. Our form must be used in all but exceptional circumstances. Using our form, you can simply enter into the contract. If the other party insists on using their form, OGC review and approval will be required.

  1. Procedures for All Types of Contracts. Take each of these steps before sending a contract to the OGC for review. The OGC provides legal advice and counsel regarding contracts; it is your responsibility to make sure the contract is administered properly.
    1. Review the contract. Carefully review the non-standard contract to make sure it sets out the price, warranty coverage and duration, description of the goods and services, delivery date and cost, term, intellectual property ownership and use, and other “business” terms and conditions you expect. Also consider whether the contract presents any unreasonable harm to the University. (See Appendix: Assessing the Risk in the Business Terms of Contract.)
    2. Obtain authorized signer approval of business terms. Individuals with expressly delegated authority in the President’s Delegations of Authority Library should review the non-standard contract to make sure it sets out the price, warranty coverage and duration, description of the goods and services, delivery date and cost, term, intellectual property ownership and use, and other business terms and conditions that are expected.
    3. Other reviews and approvals. If the nonstandard contract has a clause that requires review or pre-approval from a subject matter expert prior to OGC review, send the contract to that subject matter expert or unit responsible for the subject. (See Appendix, Required Review by Subject Matter Experts.)
    4. OGC Review. Email your contract to the OGC attorney responsible for the type of contract being created (see the Legal Services list.) If you have not received acknowledgement of receipt of your contract within two days, please follow up to make sure it has been received. Alternatively, you can email the Contract to the OGC’s general email address, ogcweb@umn.edu. This method will add a day or two to the review process.
    5. Signer. Make sure the person signing the contract is authorized. Only persons with expressly delegated authority may sign contracts. See the President's Delegation of Authority Library. Before sending a contract to the OGC for review, make sure the authorized signer has approved the business terms of the contract.
  2. Additional Procedures for Purchasing Contracts.
    1. University-wide Purchasing Contracts. As a very first step, determine whether there is a University-wide contract with vendors for all campus purchases of equipment and/or services, in which case you may not need a new Contract.
    2. Contracts $50,000 and more. If the total cost of the purchase is $50,000 or more, it must be subject to a Request for Bid or Request for Proposal, or obtain an express exemption from that requirement. See the Department of Purchasing Services website. It has a wealth of information on many purchasing policies, procedures, and topics that can help you enter into purchasing Contracts.
    3. Business Terms. In addition to the General Principles of Business Terms, above, check Purchasing Services' guidelines to help ensure that the University is paying a reasonable price, etc. If you are licensing software or “cloud” services, review the Information Security Questions for Contract Review.
    4. Review the Contract and Make Changes before Sending It to the OGC for Review. The OGC has prepared Guidelines for what contract provisions may or may not be acceptable in purchasing agreements. That document is confidential and privileged attorney-client communication. If you would like a copy for your use on behalf of the University, please contact the OGC. For your planning purposes, an initial review can take up to two weeks to return. If you need a reply more urgently, be sure to let the OGC know. It will also help if you use the name of the other Contract party and your University unit's name in the Subject line. In the text of the email, briefly describe the “deal.” That is, what are you buying, why are you buying it, what does it cost, etc. For software or computer systems, also explain who will be using it, and where.
  3. Procedures for External Sales Contracts.

    All External Sales activities must first be discussed with the  External Sales Office. Standard External Sales Agreement templates are found in the Standard Contracts Library. Always start with the appropriate version of these templates rather than asking the customer for their form of agreement. If the standard template is used, further OGC review is not required.

  4. Procedures for International Contracts.

    All international exchanges and partnerships must utilize an OGC-approved form of agreement. Many of such arrangements are covered in preapproved contract templates for international affiliations found in the Standard Contracts Library. These activities should also involve consultation with the Global Programs/Strategy Alliance office.

  5. Procedures for Information Technology Contracts, Including Hosting, Storage, Log Monitoring, Software-as-a-Service, and Database hosting and storage Contracts.

    Before sending the contract to the OGC, make sure your unit’s IT professional is familiar with the type of data that will be subject to the contract, and you have considered who will be using the software or service, where it will be used, and what the purpose of such use will be. Assess the proposed contract with the Information Security Questions and be sure the proposed contract complies with the Administrative Policy on Information Security and University Information Security or the Technology Review Board has reviewed the contract to make sure the vendor’s security standards are at least as robust as those the University uses.

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