In order to be clear about the intent of both the University and other parties with whom the University enters into relationships, written contracts are frequently necessary. Well-executed written contracts clarify and define the agreement between the parties and protect against unnecessary risks to the University’s resources and reputation. This policy provides guidance for the development and use of written contracts, describes situations for which they are required, and identifies exceptions to those requirements.
Jump to Policy Sections:
Contract Definition Contracts Requiring Additional Review
When Contacts are Required Legal Counsel Review
Purchase of Goods Contract Clauses not Permitted
Purchase of Services Arm’s Length Transaction Requirement
Contract Approval/Signatory Authority
Under this policy, a contract is an agreement between Rivier University and another party that is intended to have a binding obligation and/or legal effect. Contracts contain the terms and conditions under which goods, services, or other considerations of value are furnished by either party. Effective contracts provide a common understanding and the essential terms and mutual obligations defined within the agreement that exist between the parties. In addition to formal documents commonly understood to be contracts, documents such as purchase orders, service agreements, leases, and letters or memoranda of agreement, understanding, and intent are contracts if there is a University interest at stake and something of value is exchanged.
Not every arrangement involving the purchase of goods or services by the University will require a written contract, but many do. In general, if the arrangement involves any significant risk or potential liability that needs to be allocated between the parties, or involves a situation where the duties and responsibilities of the parties are not so basic and obvious that they do not need to be spelled out in writing, then a contract should be used. In the following subsections, some common types or categories of commercial or business transactions are described, and situations requiring (or not requiring) a written contract are specified. Keep in mind that contracts may be originated either by the University or by the other party to the agreement. Regardless of where they originate, they are typically modified by the other party, and the revision(s) approved by both parties.
Purchase of Goods: “Off the shelf” (finished) goods that are commonly purchased under $10,000 do not generally need a contract. Finished goods or equipment that are part of construction projects or which require the vendor to deliver, install, and/or service the goods on campus, or purchases where the parties need to be clear about issues such as specifications for the goods, the manner and timing of delivery, limitation of warranties, opportunity to cure defects, or payment terms, usually require a contract.
Purchase of Services: In general, services (including student activities) which the University is procuring and which will be provided on campus for hire should have written contracts. This includes arrangements with independent contractors for facilities or grounds work, managed services, food service vendors, speakers, consultants, and others. As stated above, contracts should be used whenever the arrangement involves any significant risk or potential liability that needs to be allocated between the parties, or involves a situation where the duties and responsibilities of the parties are not so basic and obvious that they do not need to be spelled out in writing.
Regardless of the cost of the service provided, where the service is provided, or whether or not a contract is executed, members of the campus community may not pay for services out of their personal accounts and then seek reimbursement from the University for these expenses. Rather, all payments for services must be made directly from the University to the individual(s) providing the services in order for the University to comply with its tax and other federal reporting obligations.
Entertainment: Any arrangement that commits the University to hire entertainers or provide entertainment services requires a written contract. All payments for entertainment services must be paid directly by the University to the individual(s) providing the entertainment in order for the University to comply with its tax and other federal reporting obligations.
Miscellaneous: Any agreement with a third party that could create a condition that could result in more than a minor liability to the University (whether in favor of the contractor, its employees, or others) or that could feasibly result in a dispute if the understandings and obligations of the parties are not clearly specified in advance, should normally be the subject of a written agreement. These arrangements should also be reviewed against these guidelines to help you determine if a contract is appropriate or necessary.
This policy applies to all agreements between Rivier University and any other party, with the following general exceptions:
- Employee Letters of Appointment
- Contracts involving financial aid and student loans
- Contracts regarding academic matters that do not involve the receipt or expenditure of funds are not required, but they are encouraged particularly when liability issues could arise through the agreement. If a contract is written for these purposes, it will fall under the provisions of this Policy.
Signatory authority at Rivier University rests with the President and Vice Presidents who may delegate their approval or signatory authority. They must still exercise reasonable oversight and maintain ultimate responsibility for the contracts, and they should limit or revoke the delegated authority whenever appropriate. Spending limits or payment approval for periodic payments specified within a contract can be delegated depending on the nature of the contract.
Contracts must be approved by the Vice Presidents for their respective divisions (the Vice President of Finance and Administration, Vice President for Academic Affairs, Vice President for Student Affairs, Vice President for Advancement, and Vice President for Enrollment Management). Contracts over $25,000 must be reviewed by at least two individuals including an individual from within the Finance and Administration department.
Divisions and departments will be responsible to manage and direct contract approval, signatory authority, and spending authority for their staff in accordance with that Policy and Procedure.
No person who is not an authorized signatory may enter into binding contract negotiations without permission from an authorized signatory who is also their managing Vice President. Those signing without this authority may incur personal liability, and/or may be subject to discipline by the University, including termination.
Proposed contracts that do not contain standard indemnity or insurance language, that have clauses that are not permitted, that provide revenue sharing with the institution, that vary significantly from standard language, or that require work by a department other than the one entering the agreement require additional review.
If a Vice President who believes that the contract language is not in the best interest of the University, s/he will communicate all concerns to the contracting department. The contracting party (department), with the consent of its managing Vice President or the President of the University, has the ultimate responsibility for and authority to enter into the agreement, regardless of differences of opinion from reviewers, subject to this Policy.
If a contract/agreement includes provisions that pose a substantial risk to the University or new, non-standardized clauses with which the University’s department representative is not familiar and/or comfortable, the Vice President of Finance and Administration should be contacted. The Vice President of Finance and Administration will determine whether legal counsel should be consulted to ensure the contract/agreement protects the University and is consistent with all applicable laws. Legal counsel review should only be requested by the Vice President of Finance and Administration or the President or her designee.
Automatic Renewal: The University does not allow contracts to contain an automatic renewal clause unless there is also a clause permitting the University to terminate the contract at will.
Limitation of Liability: The University does not allow a contracting party to limit their potential liability except in rare or specific circumstances. All rights of recovery against others are automatically transferred to Rivier’s Property and Liability insurance carriers. Limiting this recovery could adversely impact the University’s insurance coverage.
No contract may directly benefit the employee forming the contract or the employee who is responsible for managing the contract or such a person’s relative or personal friend, or pose other potential conflicts of interest whether real or perceived.