Contracts

This document provides a summary of the law in this area and answers questions frequently asked of attorneys in the Office of University Counsel.  However, the information presented here is intended for informational purposes only and nothing in this document should be construed or relied upon as legal advice.  You should refer to official University policy or consult with the Office of University Counsel regarding the specific facts and circumstances associated with any legal matter.

What is a contract?
A contract is any agreement where there is:
· a mutual exchange of promises
· with reasonable, understandable terms and conditions
· that binds the parties to perform the responsibilities described.

A contract should contain certain basic information necessary to understand the intent of the parties, such as:
· the names of the parties,
· the dates or term of the agreement,
· a clear description of the responsibilities and obligations of the parties,
· the terms of payment (if applicable),
· a procedure for termination or renewal of the agreement, and
· a signature line for the authorized individuals executing the agreement.

Is a "memo of understanding" or an "agreement" a contract?
Yes. The word "contract" is not necessary for an agreement to be a contract.  For example, an agreement negotiated by an exchange of letters can be a contract.  A document called "memorandum of understanding" is a contract.  Contracts will vary in their complexity based on the nature of the goods or services at issue or the monetary value of the contract.  If there is any doubt about whether an agreement is a contract, contact the institution's contracts or grants specialist or the Office of University Counsel.

What laws apply to a contract or an agreement?
Contract laws address what constitutes a contract and what remedies are available if a contract is broken or "breached."  Contracts and agreements with any component of Temple University must be interpreted according to the laws of the Commonwealth of Pennsylvania .  If a contract attempts to make the agreement subject to another state's laws, the contract must be changed.

Can a contract be entered into between a third party and an academic or business unit of Temple University?

All contracts in which a Temple University employee, faculty member, or academic or business unit is to undertake or engage another to undertake performance must name Temple University as the contracting party.  If there is a good reason for the contract to include the name of the employee, faculty member, or academic or business unit

Who can sign a contract for an academic or business unit of Temple University?
By University policy, only President or Vice President for Financial Affairs may sign a contract between Temple University or one of its academic or business units and another party, unless either of these individuals specifically designates another person in writing.  If there is any doubt whether you have been specifically designated to sign a contract, you should contact the grants or research office or the Office of Legal Counsel.  Signing without authorization can lead to personal liability and disciplinary action.  

What is the process for getting a contract signed by the appropriate person at Temple University ?

If you are the person who desires to enter into a contract with an outside agency:
· Obtain and complete a current Financial Impact Statement (FIS) from your budget unit head (e.g., Dean or other supervisor)
· Carefully review all terms and conditions to make sure that the contract states your understanding of the proposed arrangement
· Sign the FIS where indicated and attach the proposed contract
· Deliver the signed, completed FIS to your budget unit head (department chair, program director or other supervisor)  

If you are the budget unit head:
· Review the FIS and attached draft contract
· Confer with the individual who submitted the contract about the contract’s terms and conditions until you are satisfied with those terms and conditions
· Once satisfied, sign the FIS where indicated and deliver the FIS and proposed contract (with any changes or modifications) to the responsible Vice President or Provost

 If you are the Vice President or Provost:
· Review the FIS and attached draft contract
· Once satisfied with the terms and conditions, sign the FIS where indicated and deliver the FIS and proposed contract (with any changes or modifications) to the Office of University Counsel

 If you are the Office of University Counsel:
· Review the FIS and attached draft contract
· Negotiate modifications with the outside agency, as necessary
· Once satisfied with the terms and conditions transmit the FIS and proposed contract to the Vice President for Financial Affairs for signature 

If you are the Vice President for Financial Affairs:
· Return the contract to the Office of University Counsel

Upon receiving the executed contract from the Vice President for Financial Affairs, the Office of University Counsel will contact the initiating department for pick-up

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