External Sales Agreements (Contracts) Presentation January 27 th, 2011 – Walter 101

Don Amundson – Associate General Counsel - OGC Elizabeth Anderson – Paralegal - OGC Keith Jansen – Manager Internal/External Sales Jeff Kurland – Compliance Officer Int/Ext Sales 2 Introductions - Keith

Explain the process used for establishing External Sales Agreements (Contracts) Identify what can be done to improve the process Session Objectives - Keith 3

Introduction Policy and Procedure Contract Requirements Use of Contracts Review process Standard Agreements vs. Unique Agreements Contract Clauses Delegation of Authority Other considerations Questions & Answers anytime during the presentation Agenda - Keith 4

Policy and Procedure - Keith 5 University of Minnesota Administrative Procedure: “Establishing External Sales Agreements” ERNALSALES_PROC04.html University Policy: “Selling Goods and Services to External Customers” ERNALSALES_PROC04.html ERNALSALES_PROC04.html

Obtain written agreement (legal contract) after initial external sales approval is granted on the IESAF University departments are required to have an agreement (contract) in place to govern external sales transactions with non-University entities There is no dollar threshold under which an agreement is not required Contract Requirements - Keith 6

Agreement has multiple purposes: Document in writing the mutual understanding with the customer Reduces misunderstanding; helps with enforcement of agreement, if necessary States University’s obligation to the customer States customer’s obligation to the University Helps mitigate risk to the University by clearly stating or disclaiming things such as warranties, use of University name or logo, indemnification, insurance, etc. Provides contact information for billing, termination notices, etc. 7 Use of Contracts - Don

8 Utilize standard U of M agreements whenever possible, available at OGC website: Standard Agreement If standard agreement is used, OGC does not review unless specifically requested Unique Contracts If non-standard agreement is used, OGC must review, and usually negotiate with customer’s counsel, which will lengthen the approval time A word about using the most current version of the forms… FORM: OGC-SC102 Form Date: Revision Date: Contract Library - Don

9 Standard Contracts Library includes many forms for the following: Service Agreement – OGC-SC102 Lab Use Agreement (Company) – OGC-SC104 Workshop Agreement – OGC-SC251 Bill of Sale – OGC-SC100 Specialized Agreements Other Agreements Contracts - Don

10 Information entered on the Standard Services Agreement: Customer’s legal name and address Customer’s jurisdiction of organization and type of entity Detailed description of services to be performed and any other unique items Compensation and invoicing Term – “Start date” and “Expiration date” Notices – contact information Signature lines Contracts - Don

11 Contracts - Don

12 Standard Agreement process After a discussion with a potential customer Send a copy of the standard agreement to the customer Let the customer know that if the standard agreement can be accepted, the process will take much less time If you let the customer present a contract (unique agreement) it will take more time Contracts - Don

13 Overview of Common Contract Clauses OGC SC102 Services Agreement Clause 4: Termination (with or without cause) Clause 6: Limitation of Liability Clause 7: Use of University Name or Logo Clause 8: Indemnification / Insurance Clause 10.5: Governing Law and Jurisdiction Clause 10.8: Taxes and Similar Fees Clause 10.9: Breach OGC SC106 Confidentiality Addendum Clause 11.1: Definition of Confidential Information Clause 11.2: Exceptions Clause 11.3: Term Contracts - Don

14 UNIVERSITY OF MINNESOTA BOARD OF REGENTS POLICY RESERVATION AND DELEGATION OF AUTHORITY ADOPTED: APRIL 5, 2001 Section III – Delegation of Authority by the President Subd. 1. – Unless otherwise restricted by specific Board policies or directives, the president shall be responsible for delegating general executive management and administrative authority to other executive officers and employees as necessary and prudent, including authority to execute contracts and other legal documents. The president may condition, limit, or revoke any presidential authority so delegated. Delegation of Authority - Elizabeth

15 Subd. 2 – All delegations and revocations under this section shall be in writing, name the individual to whom such authority is delegated, describe the scope and limitations of such authority, and prescribe the extent to which such authority may be further sub-delegated. SECTION VI. CONFORMANCE WITH THIS POLICY Subd. 1 - No executive officer or employee of the University shall have any authority to take any action or make any representation on behalf of the University beyond the scope of, or materially inconsistent with, the authority delegated to such executive officer or employee as provided in this policy. Delegation of Authority - Elizabeth

16 FREQUENTLY ASKED QUESTIONS What is the President's Delegations of Authority Library? The President's Delegations of Authority Library maintains records of the delegations of authority. You can search the library and obtain copies of the Delegation of Authority records. You can also obtain copies of the Chain of Delegation record for each authority, which shows from whom and to whom the authority has been delegated. How do I find out who has the authority to sign a contract for my unit? Click on the Delegations Search button. Enter the X.500 internet ID (the part of the UofM address that comes before the of your department head or dean. You will get a list of every delegation your department head has been delegated. How do I search the President's Delegations of Authority Library? If you do not know who may have the authority, you can search by unit. Begin by clicking on "Unit". Enter the name or part of the name of the unit. The "Unit" blank will self-populate with the unit ID number. Then select "Signature Authority" from the drop-down menu for "Authority Type". Click "Search". You will get a list showing all authorities that have been delegated for that unit. Find the authority in which you are interested and click on the icon to the far right. The delegation and chain of authority will be displayed. The more blanks you fill-in, the quicker the search. Delegation of Authority - Elizabeth

17 Delegation of Authority - Elizabeth

18 Real-Life Practice Pointers Search by unit name – then check to see if person who has delegated authority (the delegatee) has delegated the authority further by typing in their x-500 in the “delegator” field; if not, the authority to sign rests with them External Sales Delegations categories FN02a – Non-Lab Use External Sale FN02b – Lab-Use External Sale Pay close attention to the probable presence of a dollar threshold in the delegations listing, such as the attached example Delegation of Authority - Elizabeth

19 Delegation of Authority - Elizabeth

Internal/External Sales reviews contracts for: Appropriate type of service (matches initial approval) Appropriate rate (pricing) structure Related concerns, such as export controls issues, product liability concerns, currency validation, etc. Classification Risk assessment Sales, Use and UBI tax 20 Contract Review - Jeff

21 Forward the completed (unsigned) contract to for review. Include Rate development detail if not previously sent Only additional information that explains activity Contract Review - Jeff

22 After contract has been reviewed, an will be sent to verify approval and a pdf copy of the contract for your records. Once the approval to use the contract has been received, send the contract to the customer for signature. Refer to the delegation of authority website to determine who has the appropriate signature authority to sign on behalf of the Board of Regents The University prefers that the customer signs the Contract Review - Jeff

23 The University prefers that the customer signs the approved contract first, which will indicate that the terms and conditions of the agreement have been accepted. This will also prevent having to have the agreement re- signed after changes are made. Electronic signatures (scanned PDF version of the signature block) are acceptable to the University, provided that the entire agreement is included along with the electronic signature. Contract Review - Jeff

24 Amendments to Agreements Changing “Description of Work”, Compensation, Term or other sections Dealing with proposed changes to agreements when their term has expired Contract Review - Jeff

25 Units are responsible for maintaining copies of all external sales agreements and managing record retention. Longer term agreements can be made that can cover multiple activities with a single customer. Units are responsible for communication between the University and the customer. Utilize standard U of M agreements whenever possible Other Items - Keith

26 Questions and Answers Contact Information: Keith Jansen Jeff Kurland Don Amundson Elizabeth Anderson Contract Review - All