Contract Review and Approval:
Make the Process Work Well for You
Over the course of an academic year, Samford faculty, administration and student organizations generate hundreds, and likely thousands of contracts. Successfully negotiating, preparing and signing these contracts requires the diligent engagement of many members of the Samford community. The interests of the university are best served when staff and faculty are mindful of the policies governing the approval and execution of contracts. Those policies are in the Policy Handbook as Policy Nos. 4.22, 4.22.1 and 4.22.2 (collectively, the “Policies”). This article provides a guide for successful compliance with the Policies. The Policies apply to all members of the university community and to any agreement or document which obligates Samford or one of its units.
The Approval Process
The Policies are a roadmap for having a contract reviewed, approved and signed. This process involves at least four individuals: the Contract Originator; the Contract Administrator; the General Counsel; and the Contract Signatory.
A. The Contract Originator
The Contract Originator is the most important person in the contracting process. He or she is the subject matter expert who makes the initial determination that Samford should enter a business transaction and what the basic terms of the transaction should be. The role of Contract Originator should not be delegated to an assistant or other colleague who is not the subject matter expert and who has not been significantly involved in the review and approval of the contract document. Before submitting a contract for approval, the Contract Originator should, among other things, read the entire contract, determine that the basic business terms are correct, and confirm that the contract is in the name of Samford University (i.e. the School of the Arts, Samford Athletics, CHS and other university units are not contract entities). If a contract requires special review or approval (e.g. Chief Grants Officer, Technology Department, Business Services, IRB), the Contract Originator should send a copy of the document to that office for a specialized review and comments before commencing the review process provided by the Policies.
As the subject matter expert, the Contract Originator should attempt to negotiate appropriate changes to the document with the other contract party. Every Contract Originator should strive to secure for Samford the best available terms. If the Contract Originator believes that someone else could best handle the negotiations, this should be communicated to the Contract Administrator or General Counsel, along with a description of the changes recommended by the Contract Originator. Once the Contract Originator reviews and is reasonably satisfied with the contract document, a Contract Transmittal Form should be prepared, signed and forwarded by the Contract Originator to the appropriate Contract Administrator with a full copy of the contract document, including any schedules, exhibits or other documents that are referred to in the contract.
B. The Contract Administrator
In academic schools, the Contract Administrator will be the relevant Department Head or Dean. Technology contracts are to be reviewed and approved by the CIO, contracts for the purchase or lease of equipment should be reviewed and approved by the Director of Business Services, and employment contracts must be reviewed and approved by the Director of Human Resources, other than contracts for the employment of full time faculty which are reviewed and approved by the Provost. The Contract Administrator is often the person whose departmental or school budget is impacted by the contract. If the Contract Originator is a Dean, then the Dean should sign the Contract Transmittal Form as Contract Originator and Contract Administrator and then forward the package for legal review. The Contract Administrator should review the contract, confirm that it is necessary and appropriate, and address any other contract-related issues pertaining to the Department’s or School’s budget, personnel and priorities. The Contract Administrator will then note his or her approval on the Contract Transmittal Form and forward it to the General Counsel.
C. Legal Review
Once a document is reviewed and approved by the Contract Originator and Contract Administrator, it should be delivered to the General Counsel for legal review. The General Counsel is often not familiar with the subject matter of the agreement, and usually has not participated in the negotiation of the business terms of the proposed contract. Therefore, when delivering a contract document and Contract Transmittal Form to the General Counsel, be sure to note any provisions that you are uncertain about or that you may want to change or discuss. Also identify any terms that the Contract Originator or Contract Administrator have unsuccessfully attempted to negotiate. The General Counsel may have some questions for the Contract Originator or the Contract Administrator about subject matter, parties or terms of the proposed agreement, and may also propose additional or alternate contract language that serves the best interests of the university. Upon completion of the legal review, the General Counsel will either sign the Contract Transmittal Form and forward the package to the appropriate signatory or return the contract to the Contract Originator for further action.
D. Contract Execution
The President has the authority to sign all contracts on behalf of the university. The President has delegated to the Provost the authority to sign Academic Contracts and to the Vice President for Business & Financial Affairs to sign Business Contracts on behalf of the University. The President, the Provost and the Vice President for Business and Financial Affairs may delegate their respective contract signing authority to other university officials pursuant to a delegationdocument that must be prepared, signed and maintained in accordance with the Policies. Contact the General Counsel if a delegation document is required. The executed contract will be returned to the Contract Originator who will either return a fully-executed document to the other contract party or return it to the other party for signatures and/or approval of changes proposed and approved by Samford.
What if You Sign a Contract that You Are Not Authorized to Sign?
An agreement is not binding on the university or its units unless it is signed by someone with appropriate authority. Except in the case of an emergency, oral agreements are not permitted and will not be recognized or honored by the university. Contracts signed by officers or other employees without proper contracting authority may be deemed void. Individuals in such circumstances may be personally liable for such agreements and any damages caused to the university. It is in the best interests of everyone to have contracts signed only by authorized university officers.
What You Can Do
Since the contract process includes a series of steps and involves multiple people, please:
If you are the Contract Originator, do not delay beginning the process. Promptly begin your review, negotiation, editing, etc. If you need a contract or an addendum to be prepared, contact the General Counsel once you know the terms of the transaction. Complete your review and the Contract Transmittal Form and deliver the documents to the Contract Administrator as promptly as possible.
Read the contract carefully. Make sure that it accurately describes what Samford is getting or giving, confirm the amount and timing of all payments and that the length of the contract, if relevant, is correctly specified.
The Contract Originator and the Contract Administrator should have an open dialogue so that when the document is received by the latter, his or her review can be handled knowledgeably and efficiently.
Every contract is important. And every contract deserves a thorough review, no matter how much money or other consideration is involved. The Office of the General Counsel will begin and complete the legal review of a contract as soon as possible. Be mindful that there are generally many contracts in the queue for legal review at any given time. If there are circumstances that truly require an expedited review, be sure to let the Office of the General Counsel know. We will help you with your contracts as efficiently and effectively as is reasonably possible.