1. The Good, The Bad and The Ugly
Contracts:
The Good, The Bad and The Ugly
Part 1 & 2
CASBO Annual Conference
April 4, 2013
Presented by: Devon Lincoln & Megan Macy

2. Elements of a Contract Offer/counter offer Acceptance/rejection
Consideration

3. Contract: A Bridge of Understanding

4. Contract: A Bridge of Understanding

5. Contract: A Bridge of Understanding
When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean - neither more nor less."
From the California Supreme Court: The English language is imprecise - “a rule that would limit the determination of the meaning of a written instrument to its four-corners merely because it seems to the court to be clear and unambiguous, would either deny the relevance of the intention of the parties or presuppose a degree of verbal precision and stability our language has not attained”

6. Delegation of Authority to CBOs
Ed Code Board may delegate by majority vote to District Superintendent (or to “any persons that he or she may designate”). However, no contract made pursuant to this delegation is valid unless “the same shall have been approved or ratified” by the Board by a motion duly passed and adopted.

7. Delegation of Authority to CBOs (cont.)
Ed Code delegation for supplies, equipment and services – governing board may delegate authority to purchase supplies, material and services not in excess of amounts under section of Public Contract Code ($15,000 public works projects; currently $83,400 for equipment, materials, supplies and services 20111(d))

8. Void Contracts No Board Approval Super Majority Approval
Conflict of Interest
Gov Code 1090
Political Reform Act (FPPC)
Common Law

9. Void Contracts (cont.) Ultra Vires
Contrary to law – Round Valley case and CBA agreements
Administrator contracts in excess of statutory year maximum or buy out maximum
Improper bid award

10. Public Policy/ Constitutional Issues
Contract cannot bind future Board’s legislative decision-making
Contract cannot bind future budgets (exceptions)
Duration for work, services or equipment not to exceed 5 years; for materials or supplies not to exceed 3 years (Ed Code 17596)

11. Reviewing Contracts

12. Reviewing Contracts

13. Reviewing Contracts
Read the whole contract

14. Reviewing Contracts Understanding the contract Read the fine print
Scope of agreement
Clarity of issues
Clarity of definitions
Is this the agreement as you understood it?

15. Adhesion Contracts

16. A Word on Piggybacking Pub. Contract Code § 20118
For purchase of materials, not services
Contract terms must be the same
Review the contract!

17. Negotiating a Contract
Bargaining Power

18. Negotiating a Contract

19. Standard Contract Clauses

20. Standard Contract Clauses

21. Standard Contract Clauses
Remedies for Default/Breach
Time to cure
Termination for non-performance
Specific performance
Proof of breach
Selection of forum

22. Standard Contract Clauses (cont.)
Indemnity/Hold harmless/Defense
Integration clause
Binding effect – successors and assignees
Written modification

23. Standard Contract Clauses (cont.)
Non-delegation of rights, duties, and obligations
Attorneys fee clauses – to use or not to use
Governing Law/Venue
Alternative Dispute Resolution (ADR)
Interpretation

24. Standard Contract Clauses (cont.)
Execution by Facsimile or Counterpart
Severability
Authority to Sign
Board Approval/Ratification

25. Contract Arrangements Binding and Not Binding
Letter of Intent
Memorandum of Understanding
Purchase Order
Settlement Agreement
Scope of release – Civil Code 1542
ADEA – over 40 = right of rescission

26. Avoiding Litigation STP commercial: “Pay me now or pay me later.”
Simplify when possible
Plain English is allowed!
Eliminate limit ambiguity
Review contract – trust but verify
Vendor’s contract will favor vendor

27. Avoiding Litigation (cont.)
Don’t assume attorney got it right
The business decision is yours.

28. Monitor the Contract!
Follow through on terms
Calendar deadlines

29. At the end of the day…

30. Disclaimer:
These materials and all discussions of these materials are for instructional purposes only and do not constitute legal advice. If you need legal advice, you should contact your local school counsel or an attorney at Lozano Smith. If you are interested in having other in-service programs on school law presented in your school district, please contact or call (559)

31. Copyright © 2013 Lozano Smith
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