1. Faculty Briefing Contract Questions
College of Liberal Arts
August 15, 2011
Bill Woodward
Office of Counsel
X6633

2. How do I know if I am dealing with a contract?
Includes documents entitled: Contract, Agreement, License, some Reservation Forms, some Room Use Forms, some Price Quotations, some Invoices, Leases, Equipment Rental Forms
If the document contains the word “agree,” it is almost certainly a contract

3. What is the Office of Counsel’s Involvement?
Provide legal review and counsel
Officials whose names appear on the BOT Contract Authority Resolution decide whether to sign the contract or not
Reviewed over 517 standard contracts FY 2010
Reviewed over 300 non-standard contract FY 2010
Reviewed over 40 construction contracts FY 2010
Draft agreements

4. What is the Office of Counsel’s Involvement? (continued)
Prepare addendums to deal with “problem clauses”
Negotiate refinement of addendums to meet vendor’s concerns where possible.
If no one tells us the vendor has a problem with an addendum, we have no way of knowing
Problem: Vendor says “take it or leave it”
Could lead to personal liability on the part of signer

5. What are some common contract “problems”?
Indemnification, hold harmless provisions
Choice of governing law other than Alabama
Exclusive venue for dispute resolution in courts of another state
Submission of the University to the jurisdiction of a court
Arbitration requirements
Use of the University’s name/logo in advertising by the other party
Payment in a future fiscal year

6. What are some common contract “problems”? (continued)
Automatic renewals absent written notice so many days prior to end of current term
Reservation of the right to change the terms and conditions at any time
Requirements that the University accept responsibility for damage caused by those attending an event at a hotel
Provisions calling for first class air fare, limo service, 5 star hotels to vendor’s employees

7. What are some common contract “problems”? (continued)
Requirements that the University pay taxes
Confidentiality provisions without an exception that allows release required by Alabama Open Records Act
Bus charters without provisions relating to liability insurance and driver qualifications
Insurance requirements not met by the University’s standing policies

8. How do I start the contracting process?
Prepare a file containing legible copies of the quotation, license agreement, etc.
Complete the blanks
Locate/include in the file legible copies of documents referenced
Indicate if for academic or research purposes
Scan/ the package to
Fax to x6151 if you have no scanning capability
Call x6484 if all else fails
Purchasing will assign responsibility based on “commodity”
Prepare/submit requisition
Start early

9. Do I really need to read the contract?
Most written contracts will have a clause providing that it contains all of the matters agreed to by the parties and supersedes any oral or written understandings reached previously
Be certain that all of the matters important to you have been included in the written agreement

10. Does the Competitive Bid Law (CBL) apply?
CBL threshold is $7,500
Can’t fragment purchases within a fiscal year to avoid CBL application
Exceptions include:
Goods: Sole source
Services: Personal services of individuals possessing a high degree of professional skill where the personality of the individual plays a decisive part
Noncompliance leads to null and void contract
It can be faster to use CBL process than to use sole source

11. What is a sole source item?
Goods/ services offered must be unique.
Uniqueness must be substantially related to the intended purpose, use, and performance of the goods/ services sought. 
Other similar goods/ services cannot meet the desired objectives of the entity seeking the goods/services.
No “gold plating”

12. When can I use a Professional Services Contract?
Using a Professional Services Contract is only appropriate if the individual being hired is an independent contractor, not an employee. Independent contractors pay their own Social Security, make their own quarterly estimated income tax payments, and provide their own insurance and retirement benefits, if any.
Employees work under the control and continuing supervision of the University while independent contractors are given a task and perform on their own.
The Professional Services Contract (with Terms and Conditions is on-line at:

13. What happens if the Professional Services Contract is used inappropriately?
Using the Professional Services Contract form is not determinative
If the University misclassifies an employee as an independent contractor, it is subject to fines and must pay the withholding which was not collected from the employee’s salary.
Consider part-time or on-call employment status

14. Are the documents legible?
Try to get vendors to scan original documents and them to you.
Helps insure legibility
Can make it easier to send information to Purchasing or OOC more quickly and easily
Faxes are discouraged. Second and later generation faxes are almost always either illegible or not comfortably legible. This slows down processing.

15. Does the contract refer to other agreements, documents or websites?
If there are references to other agreements, documents, or websites, they should be found, printed, and made a part of the contract package
Failure to do this will slow processing

16. How can I use a software “education license”?
Education licenses are offered at a price discount or, on occasion, at no cost
The trade-off is that the use of the software is typically restricted to use for education purposes with commercial use specifically prohibited.
If “donated,” vendor may well say “take it or leave it” when an addendum is proposed to deal with sovereign immunity issues

17. What are some of the common restrictions in software licenses?
Education use only
Limit on number of installations, if not a site license (audit rights to enforce)
Limit on number of simultaneous users (audit rights to enforce)
Requirement to have individual users agree in writing to abide by the terms of the University’s license
Requirement to appoint a license administrator in writing