Transcript Sponsored by: The Office of the General Counsel   Presented By: ◦ Peter Michelson, Esq. ◦ Dawna McIntyre, Esq. ◦ Nathan LaVallee, Esq.

Sponsored by:
The Office of the General Counsel


Presented By:
◦ Peter Michelson, Esq.
◦ Dawna McIntyre, Esq.
◦ Nathan LaVallee, Esq.


All characters, contracts and events
appearing in this work are fictitious. Any
resemblance to real persons, living or dead,
is purely coincidental.
No animals were harmed in the making of
this presentation.
Any agreement
where two (or
sometimes more
than two) parties
make mutual
promises to each
other.
E.g. Microsoft
promises to sell
software;
University
promises to pay
for software.

The name of document does not matter:
 Contract, Agreement, Settlement Agreement,
Affiliation Agreement, Memorandum of
Understanding. If there are mutual binding
promises, it’s a contract.
o We in the General Counsel’s Office often hear: “It’s an
MOU, it’s not a contract.”
• It IS a contract.
o A contract is binding promises. Though many contracts
involve money, not all contracts do.
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Clarity, clarity, clarity. If you write language
that you don’t understand, a judge won’t
understand it either.
Whenever possible, use a form prepared by
the University.
Ambiguity can be a big problem. If one
section of a contract says one thing, and
another says another thing, that is a recipe
for a lawsuit.

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You need to be able to say what the
Contractor is supposed to do, how and/or
how well it is supposed to do it, and when it
is supposed to get it done.
Put another way, you have to be able to
define what a breach of contract is.
UMass hired a company it had used before to perform
services, and University had been satisfied with services
rendered first time. Several years later, University
issued request for bids to do another services project,
and it went with same company. Scope of service was
not very specific.
 In the intervening period, the company with which we
contracted had been acquired by another company.
Service rendered by “new” company was terrible.
However, there was little in the contract to point to in
order to establish a breach of contract by the company
hired to do the services.
Delivery dates?
Payment terms?
Dates of service?
• You would be
shocked how
often those
terms are
inaccurate or
vague.
Are parties
properly
identified?
E.g. Use
“University of
Massachusetts”
or “University of
Massachusetts
Amherst”; do
not use “UMass
Facilities
Department” or
“Department of
Athletics.”

A standard clause in every contract should be
that the parties reserve the right to amend
this contract. People sometimes want to
change terms, correct mistakes, fix things
they did not foresee, or make other changes.
This clause should be non-controversial.

Indemnity clauses.
◦ Under the Massachusetts Constitution, the
University (or any agency of the state) may not
indemnify other parties. If a party is insistent, e.g.
“we have to be indemnified!!”, usually that can be
dealt with through insurance coverage that names
the party that is seeking indemnification as an
insured. If we are paying someone for services, the
usual practice is to insist that the contracting party
indemnify the University.

“Both parties agree to indemnify the other.”
Aside from the issues just discussed, what
does this mean?

This is a provision that matters to lawyers,
but probably does not matter so much to
you, because it seems pretty arcane.
◦ The OGC has a strong preference that the Law of
the Commonwealth of Massachusetts apply. Why?
What do you know about Florida, or Michigan, or
Nebraska law? That’s about as much as we in the
General Counsel’s Office know about Florida, or
Michigan, or Nebraska law. If we end up litigating
and laws of another state apply, the University is
likely to need to retain outside counsel to assist
with the litigation.

Some vendors or parties with whom we
contract like to avoid court and seek to insert
an arbitration clause, on the thinking that
arbitration of disputes costs less than going
to court. The Office of General Counsel’s
feelings about this are mixed. We do not
view the inclusion of an arbitration clause a
“deal-breaker,” but we do not favor this
either. When this issue arises, please consult
the OGC.

In general, renewing a contract for more than
a year or two is disfavored. After a few years,
it’s a good idea to take a fresh look at the
contract. It may be that the University will
want to renew on substantially the same
terms, but it’s equally likely that the
University will want to look at the contract
again, and perhaps negotiate new terms, new
scope of services, and/or new price.

Not that many contracts have confidentiality
or non-disclosure clauses, but at any rate the
University should not agree to them. The
Massachusetts Public Records Law makes
contracts entered into by the University
presumptively public records. If the
contracting party is insistent, then the
University should insist on adding the words,
“To the extent permitted by law….” which will
protect the University in the event it has to
disclose a contract.

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Do not ask for or agree to a request to pay
another party’s legal fees.
This is a big “no-no.” If another party insists
that it has to have this clause, I view this as a
deal breaker.

In what circumstances can the parties get out
of the contract?
◦ This needs to be thought through. There is
termination of a contract on a fixed date; e.g.
“Contract expires on November 20, 2013.”

There is also termination “for cause.”
◦ Be sure you attempt to define what “cause” is, because
this often leads to litigation.

There can also be termination upon completion
of a task or set of tasks.
◦ Make sure both parties understand what “completion”
is.

Performance issues.
◦ Does the contractor do what he said he’d do,
when he said he or she would do it?
◦ Equally important, does the contract define well
what the Contractor was supposed to do?
◦ Most important related problem: failure to
document problems. Write an email; write a
memo to the file. Don’t ignore problems.

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Do the parties understand the due dates?
Do the parties agree on what work is to be
done?

A party simply fails to show up, either at all, or
on a regular basis.
◦ What can you do?
 Again, document everything.
 Draft the contract to provide for
performance payments. By this I don’t
mean, payments over the course of the
contract term, but rather payments based
on various performance benchmarks.
 Set aside a percentage of the contract to be
paid at the end of the contract.
Contracts Part II
What is a contract?
A contract is a legally enforceable promise, which binds the parties.
A contract can be either written or oral.
A contract can come in many forms and be called by many names,
including:
● Agreement,
● Purchase Order,
● MOU, (“Memorandum of Understanding”)
● Letter of Understanding
● Affiliation Agreement
●No Name at All
UNDERSTAND WHAT YOU ARE EXECUTING!
Always READ and UNDERSTAND the terms to a contract BEFORE executing
it.
The body of a contract can be described by breaking it down into specific
sections:
●
●
●
●
●
Introduction
Consideration
Terms and Conditions
Miscellaneous Provisions
Signature
UNDERSTAND WHAT YOU ARE EXECUTING!
The Introduction in the
University’s Form contract for
services:
• Identifies the date the
contract is made, effective
and executed.
• Identifies the legal names of
the parties,
• Identifies the address of the
parties,
This agreement is made, entered into,
and effective on
______[DATE]_________________ by
and between the University of
Massachusetts,
_________________________(Campus),
(hereinafter called “University”), an
agency of the Commonwealth of
Massachusetts and
_______[NAME OF CONTRACTOR]____,
(Contractor’s legal name and address)
(hereinafter called the “Contractor” and
collectively the “Parties”).
UNDERSTAND WHAT YOU ARE EXECUTING!
The Contract is comprised of the
following:
The terms and conditions stated in
the contract for services
Any amendment to the contract for
services
The scope of services and any
attachment to the scope of services
This agreement (the “Contract”) is
comprised of the following
documents, listed in the order of
precedence: (1) this Contract Terms
and Conditions; (2) any Contract
Amendments, as identified in Section
2, below; and (3) any attached Scope
of Services as identified in Section 1,
below, including any addenda
thereto. The Contract Terms and
Conditions and any agreed upon
changes thereto included in any
Contract Amendments shall take
precedence over any additional or
conflicting terms and conditions as
may be included in any other
document attached hereto.
UNDERSTAND WHAT YOU ARE EXECUTING!
The terms of the contract for services—and
any amendment to the terms of the
contract for services executed by the
parties will CONTROL
IF any language in the scope or documents
attached to the scope are in addition to or
conflict with the contract terms and
conditions or an amendment, they will
NOT control.
What is an example of a term that is an
“addition to?”
●The Contractor includes an arbitration
clause.
This agreement (the “Contract”) is comprised
of the following documents, listed in the
order of precedence: (1) this Contract Terms
and Conditions; (2) any Contract
Amendments, as identified in Section 2,
below; and (3) any attached Scope of
Services as identified in Section 1, below,
including any addenda thereto. The Contract
Terms and Conditions and any agreed upon
changes thereto included in any Contract
Amendments shall take precedence over any
additional or conflicting terms and conditions
as may be included in any other document
attached hereto.
UNDERSTANDING WHAT YOU ARE EXECUTING!
IF any language in the scope or documents
attached to the scope conflict with the
contract terms and conditions or an
amendment, they will NOT control.
What is an example of a term that is
“conflicting?”
●The contract for services provides that
the contract is governed by Massachusetts
law. The Contractor includes in its scope of
services that Maryland Law shall govern
the contract.
This agreement (the “Contract”) is comprised
of the following documents, listed in the
order of precedence: (1) this Contract Terms
and Conditions; (2) any Contract
Amendments, as identified in Section 2,
below; and (3) any attached Scope of
Services as identified in Section 1, below,
including any addenda thereto. The Contract
Terms and Conditions and any agreed upon
changes thereto included in any Contract
Amendments shall take precedence over any
additional or conflicting terms and conditions
as may be included in any other document
attached hereto.
WHAT IS A SCOPE OF SERVICES?
What is a “Scope of Services”
A “Scope of Services” is a
document which describes the
tasks or services to be
performed under a contract in
some detail. The work is usually
set out into specific tasks with
deadlines or deliverable dates.
The Scope of Services must be
executed by the Parties.
1. Scope of Services. The
Contractor agrees to perform the
following services:
___________________________
or if applicable, those services
described in the Attachment[s]
attached hereto. Any Attachment
attached hereto is made a part of
this Contract and must be
specifically labeled (e.g.
“Attachment A, Scope of Services,
consisting of ‘n’ pages”). Only the
Scope of Services specifically
referenced in this Contract and
signed by the Parties’ authorized
representatives shall apply.
WHAT IS A SCOPE OF SERVICES?
The Services that are to be provided must
be spelled out clearly defining any
required reports and timelines.
The Scope should include at least the
following elements:
•
•
1.
•
[Insert introductory sentence or two about purpose of contract,
reason for procurement]
•
2.
•
[Insert this paragraph if Contractor has professional qualifications;
e.g., license to practice medicine; license to sale a ship or special
skill; etc., that are required for the Services or Tasks to be rendered
by the Contractor.]
•
3.
•
[Insert list of services in general detail or tasks to be performed by
the Contractor specific to this contract.]
•
4.
•
[This may be combined with the “Services To Be Provided.” Specify
Timeline of Services, milestones, or Tasks to be rendered by
Contractor]
•
5.
•
[Insert brief description of payment terms. If applicable indicate
whether certain payments are associated with certain Services or
Tasks being rendered by Contractor. If a particular person needs to
sign off on the payments indicate that person’s name.]
An introduction
Qualifications of the Contractor
Outline of the Services to be performed
Timelines associated with any Services
Delivered
How the Contractor will be paid.
Signature of the Parties
SCOPE OF SERVICES/WORK
Introduction/Purpose
Qualifications of Vendor
Services To Be Provided By Contractor
Deliverables & Timelines
Compensation
•
[SIGNATURES OF THE PARTIES]
WHAT IS AN AMENDMENT?
If you are executing an
amendment at the same time
you are executing the Contract,
then you would fill in this
section.
Otherwise, if the Contract has
already been executed, you will
need to prepare an
“Amendment” to the Contract to
include language to this section
of the Contract.
The Amendment will need to be
identified as to what “letter”
attachment it is and the number
of pages.
Contract Amendments. The
following amendments to the
Contract have been executed by
duly authorized representatives
of the Parties and are attached
hereto and incorporated herein:
__________________________
__________________________
__________________________
_________________. All
amendments attached hereto
must be specifically labeled (e.g.
“Attachment B, Amendment No.
1, consisting of ‘n’ pages”).
WHAT IS AN AMENDMENT?
An amendment to a contract allows the parties to
make changes to the original contract.
The changes to the original contract may be to
modify the terms or include additional terms, or
clarify terms to the original contract.
An amendment does NOT replace the original
contract. An amendment only changes the part
or parts of the original contract the parties agree
to change.
The original contract is still valid and binding on
the parties.
The changes agreed upon by the parties now
need to be incorporated into the original
contract—through an amendment.
The Contractor shall provide energy rated
windows for the Client. The Client agrees to
pay the Contractor for any and all energy
rated windows provided by Contractor.
Signed: Contractor
Signed: Client
After the contract has been executed, the
parties agree as follows:
The Contractor shall provide purchase and
install energy rated efficient windows for the
Client. The Client agrees to pay the
Contractor for any and all energy rated
efficient windows provided installed by
Contractor.
Signed: Contractor
Signed: Client
WHAT IS AN AMENDMENT?
The Contractor shall provide energy rated
windows for the Client. The Client agrees
to pay the Contractor for any and all energy
rated windows provided by Contractor.
Signed: Contractor
Signed: Client
After the contract has been executed, the
parties agree as follows:
The Contractor shall provide purchase and
install energy rated efficient windows for
the Client. The Client agrees to pay the
Contractor for any and all energy rated
efficient windows provided installed by
Contractor.
Signed: Contractor
Signed: Client
1. The word “provide” in the first sentence of the Contract
shall be deleted and the words “purchase and install”
shall be inserted therein.
2. The word “rated” in the first sentence of the Contract
shall be deleted and the word “efficient” shall be inserted
therein.
3. The word “rated” shall be deleted in the second sentence
of the Contract and the word “efficient” shall be inserted
therein.
4. The word “provided” shall be deleted in the second
sentence of the Contract and the word “installed” shall
be inserted therein.
The original contract now consists of the
contract that was first executed by the
parties and this amendment. Together,
these documents create the original
contract.
WHEN DOES THE CONTRACT START AND END!
The “Start Date” is the date services
are being rendered. The
“Completion Date” is the date the
services end.
3. Dates of Performance:
From: ___________________
(Start Date)
To: ____________________
(Completion Date)
The “Start Date” cannot be dated
BEFORE, the effective date of the
contract provided in the introductory
paragraph.
Why? Because you cannot start
services BEFORE you enter into the
Contract.
EXAMPLE:
This agreement is made, entered into, and effective
on July 1, 2013 by and between. . . .
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Dates of Performance:
From: March 1, 2013
To: December 31, 2013
UNDERSTAND WHAT YOU ARE EXECUTING!
Clarifying Payment terms is
essential. Is the Contractor
being paid hourly?,
Weekly?, Semester?
Is the Payment upon the
submittal of an approved
invoice?
Payment:
A. The University shall compensate the Contractor for the services rendered at the rate of
$___________________ per _____________________(e.g., hour, week, semester,
project, etc.).
B. In no event shall the Contractor be reimbursed for time other than that actually spent
providing the described service(s).
C. Payment will be made upon submittal and approval of the Contractor’s Invoice(s) that is
(are) received Monthly ____, Quarterly ____ , Other ____
(specify)_________________________________________________________.
D.
Reimbursement for Travel and Other Contractor Expenses:
____All travel and meals are part of this Contract. No reimbursement will be made.
Are Travel expenses
included?
Other Expenses?
What is the Total “Not To
Exceed” Amount of this
Contract?
____Contractor will be reimbursed for pre approved travel in an amount not to exceed $
_____________________. Copies of receipts must be submitted. Any expense claimed by the
Contractor for which there is no supporting documentation shall be disallowed.
____Contractor will be reimbursed for OTHER expenses in an amount not to exceed
$_______________________.
OTHER Expenses shall be limited to:
_________________________________________________________.
Copies of receipts must be submitted. Any expense claimed by the
Contractor for which there is no supporting documentation shall be disallowed.
E. The total of all payments made against this Contract shall not exceed
$____________________________________.
TERMINATING THE CONTRACT!
Termination “Without Cause” allows the
University to terminate the Contract without
any liability. The Contractor does not have
the right to sue the University for damages
because the University ended the Contract
before its term. In order to benefit from this
clause, the University must give the
Contractor notice of termination thirty days
before the termination event.
Termination “With Cause.” If the Contractor
breaches a “material” term or condition, the
University can end the Contract—with notice.
What is “material.”
A “material” term in a contract is a term or
provision which concerns significant issues,
such as price, quantity, the type of work to be
done, and terms of payment or performance.
A breach of a material term would not only
include the material terms in the Contract;
but, also include the Contractor not
performing services outlined in the Scope of
Service that are essential to the performance
of the Contract.
Termination
A. Without Cause. This Contract may be terminated
without cause by either party by giving written
notice to the other at least thirty (30) calendar
days prior to the effective date of termination
stated in the notice.
:
B. With Cause. If Contractor breaches any material
term or condition stated herein or fails to perform
or fulfill any material obligation required by this
Contract, the University may terminate this
Contract by giving written notice to the Contractor
stating the circumstances of the breach at least
seven (7) calendar days before the effective date
of termination stated in the notice.
Notwithstanding the foregoing, the notice of
termination provided by the University may state
a period during which the alleged breach may be
cured by the Contractor, which cure shall be
subject to approval by the University. In the event
of a breach by Contractor, Contractor may be
subject to any and all applicable contract rights
and remedies available to the University.
Applicable statutory or regulatory penalties may
also be imposed.
WHAT HAPPENS UPON TERMINATION?
If the Contract is terminated for any
reason, all data and finished products
become the property of the University. If
they were prepared by the Contractor
under this Contract.
If the Contract is terminated Without
Cause, the University is responsible for
paying the Contractor for all services the
Contractor rendered subject to any offsets
of moneys due the University. And only if
the Contractor is NOT in Default. And only
if the Contractor sends in an invoice as to
the amounts due.
12. Obligations in Event of Termination:
A. Upon termination of this Contract, all
finished or unfinished documents, data,
studies, and reports prepared by the
Contractor pursuant to this Contract,
shall become the property of the
University.
B. Upon termination of this Contract
without cause, the University shall
promptly pay the Contractor for all
services performed to the effective date
of termination, subject to offset of sums
due the Contractor against sums owed
by the Contractor to the University, and
provided Contractor is not in default of
this Contract and Contractor submits to
the University a properly completed
invoice, with supporting documentation
covering such services, no later than
thirty (30) calendar days after the
effective date of termination.
KEEP MY INFORMATION CONFIDENTIAL!
Contractor must comply with all state and
federal laws regarding confidentiality and
privacy.
Contractor must comply with G.L. ch.66A, and
G.L. ch.93H
Contractor must implement safeguards to
restrict access to confidential information.
Contractor must ensure security of
confidential information
Contractor must inform its employees and
agents as to the requirements of this section.
16. Confidentiality/Privacy. The Contractor shall
comply with all applicable state and federal laws
and regulations relating to confidentiality and
privacy. In addition, in the performance of this
Contract, the Contractor may acquire or have
access to “personal data” and become a
“holder” of such personal data (as defined in
Mass.Gen.Laws ch. 66A) or personal information
(as defined in Mass.Gen.Laws ch. 93H). Personal
data and personal information shall be deemed
to be “Personal Information.” Contractor shall
implement feasible safeguards to restrict access
and ensure the security, confidentiality and
integrity of all Personal Information owned,
controlled, stored, or maintained by University
and provided to or accessed by Contractor in the
performance of services irrespective of the
medium in which it is held. The Contractor
agrees that it shall inform each of its employees,
servants or agents, having involvement with
Personal Information of the laws and regulations
relating to confidentiality and privacy.
KEEP MY INFORMATION CONFIDENTIAL!
REMEMBER -- THE UNIVERISTY IS SUBJECT TO THE
MASSACHUSETTS PUBLIC RECORDS LAW, WHICH
PROVIDES:
Every record that is made or received by a government
entity or employee is presumed to be a public record
unless a specific statutory exemption permits or
requires it to be withheld in whole or in part. In
addition, the University is not required to notify
anyone of the disclosure, except the individual making
the public records request.
What does this mean?
The University will DISCLOSE ALL information not
exempt by the Public Records law
The University will NOT give the Contractor prior
notice of the disclosure
The University will NOT be liable for disclosing
information in accordance with the Public Records
law.
The University will NOT maintain the confidentiality
of any information subject to the Public Records
Law.
16.
Confidentiality/Privacy. The Contractor
shall comply with all applicable state and
federal laws and regulations relating to
confidentiality and privacy. In addition,
in the performance of this Contract, the
Contractor may acquire or have access to
“personal data” and become a “holder”
of such personal data (as defined in
Mass.Gen.Laws ch. 66A) or personal
information (as defined in
Mass.Gen.Laws ch. 93H). Personal data
and personal information shall be
deemed to be “Personal Information.”
Contractor shall implement feasible
safeguards to restrict access and ensure
the security, confidentiality and integrity
of all Personal Information owned,
controlled, stored, or maintained by
University and provided to or accessed
by Contractor in the performance of
services irrespective of the medium in
which it is held. The Contractor agrees
that it shall inform each of its employees,
servants or agents, having involvement
with Personal Information of the laws
and regulations relating to confidentiality
and privacy.
THIRD PARTY STAY AWAY UNLESS YOU HAVE PERMISSION!
The Contractor CANNOT give its
obligations under the Contract
to a Third Party WITHOUT prior
written consent from the
University.
Example:
Sam contracts with Susan
Company to deliver bottled
water to his home.
Susan Company contracts with
another company to deliver
bottled water to Sam’s home.
Susan Company must have
consent from Sam FIRST.
17. Assignment and Delegation.
The Contractor shall not
assign or in any way transfer
any interest in this Contract
without the prior written
consent of the University,
nor shall the Contractor
subcontract any service
without the prior written
approval of the University.
Any purported assignment of
rights or delegation of
performance in violation of
this Section is VOID.
WHO DECIDES, WHERE IS IT DECIDED?
Contractor must agree to Massachusetts laws.
20.
Choice of Law. This Contract is entered into in
the Commonwealth of Massachusetts, and the
laws of the Commonwealth, without giving
effect to its conflicts of law principles, govern all
matters arising out of or relating to this Contract
and all of the transactions it contemplates,
including, without limitation, its validity,
interpretation, construction, performance and
enforcement.
21.
Forum Selection. The Parties agree to bring any
action arising out of or relating to this Contract
or the relationship between the Parties in the
state courts of the Commonwealth of
Massachusetts which shall have exclusive
jurisdiction thereof. The Contractor expressly
consents to the jurisdiction of the state courts of
the Commonwealth of Massachusetts in any
action brought by the Commonwealth or the
University arising out of or relating to this
Contract or the relationship between the
Parties, waiving any claim or defense that such
forum is not convenient or proper. This
paragraph shall not be construed to limit any
other legal rights of the Parties.
Contractor must bring any suit arising from this
Contract in Massachusetts.
WHY?
The University is familiar with Massachusetts law.
Agreeing to another state’s law means you need to
understand how that law interprets the language in
this Contract. How that law interprets the rights of
the parties in a dispute. How that law determines
damages.
You will need to hire an attorney in that state to
review that state’s laws as it relates to the provisions
of this Contract. This may entail changing some of the
language in the Contract to better protect the
University.
If the dispute arising out of this Contract is held in
another state. You will be responsible for hiring
outside counsel. Providing traveling accommodations
for witnesses as well as expert witnesses.
PROTECT ME!
The indemnification language protects
the University.
The Contractor Must “DEFEND:” The
Contractor MUST hire an attorney to
protect the contractual rights of the
University
The Contractor MUST “INDEMNIFY:”
The Contractor MUST compensate the
University for its loss.
The Contractor MUST HOLD the
University “HARMLESS:” The
Contractor will not hold the University
responsible for any loss, damage, or
legal liability.
.
23.
Indemnification of University. The Contractor shall
defend, indemnify, and hold harmless the
Commonwealth, the University, its Trustees,
Officers, servants, and employees from and against
any and all claims, liability, losses, third party claims,
damages, costs, or expenses (including attorneys’
and experts’ fees) arising out of or resulting from the
performance of the services performed by the
Contractor, its agents, servants, employees, or
subcontractors under this Contract, provided that
any such claims, liability, losses, third party claims,
damages, costs, or expenses are attributable to
bodily injury, personal injury, pecuniary injury,
damage to real or tangible personal property,
resulting therefrom and caused in whole or in part
by any intentional or negligent acts or omissions of
the Contractor, its employees, servants, agents, or
subcontractors. The foregoing express obligation of
indemnification shall not be construed to negate or
abridge any other obligation of indemnification
running to the Commonwealth and/or the University
that would otherwise exist. The University shall give
the Contractor prompt and timely notice of any
claims, threatened or made, or any law suit
instituted against it which could result in a claim for
indemnification hereunder. The extent of this
Contract of indemnification shall not be limited by
any obligation or any term or condition of any
insurance policy. The obligations set forth above
shall survive the expiration or termination of this
Contract.
PROTECT ME!
From what?
Any and all claims, liability, losses, third party claims,
damages, costs, or expenses, including expert and
attorneys’ fees
WHEN? When these claims are related to the
performance of services under this Contract.
IF the claims relate to”
Bodily injury
Personal injury
Pecuniary injury
Damages to real or tangible personal property
AND the claims are
Caused by the intentional or negligent act acts of the
Contractor.
Contractor pays even if damages go beyond the
insurance limits of the Contractor.
23.
Indemnification of University. The Contractor shall
defend, indemnify, and hold harmless the
Commonwealth, the University, its Trustees,
Officers, servants, and employees from and against
any and all claims, liability, losses, third party claims,
damages, costs, or expenses (including attorneys’
and experts’ fees) arising out of or resulting from the
performance of the services performed by the
Contractor, its agents, servants, employees, or
subcontractors under this Contract, provided that
any such claims, liability, losses, third party claims,
damages, costs, or expenses are attributable to
bodily injury, personal injury, pecuniary injury,
damage to real or tangible personal property,
resulting therefrom and caused in whole or in part
by any intentional or negligent acts or omissions of
the Contractor, its employees, servants, agents, or
subcontractors. The foregoing express obligation of
indemnification shall not be construed to negate or
abridge any other obligation of indemnification
running to the Commonwealth and/or the University
that would otherwise exist. The University shall give
the Contractor prompt and timely notice of any
claims, threatened or made, or any law suit
instituted against it which could result in a claim for
indemnification hereunder. The extent of this
Contract of indemnification shall not be limited by
any obligation or any term or condition of any
insurance policy. The obligations set forth above
shall survive the expiration or termination of this
Contract.
SPEAKING OF INSURANCE….
Contractor should provide insurance to the
University. Naming the University as an
additional insured .
WHY?
A Contractor may agree to the
Indemnification language; but, where is the
money coming from? By requiring
Insurance—you know where the money is
coming from to protect the University.
PROVIDE AN AMENDMENT TO THE CONTRACT
INSERTING THE FOLLOWING AS A SEPARATE
PARAGRAPH IN SECTION 23.
See: Sample Amendment and Exhibit
a. required ______
not required ______
Commercial General Liability Insurance including
products and completed operations liability, and
contractual liability coverage specifically covering the
Contract, written on an occurrence form, with
combined limits for bodily injury, personal injury, and
property damage of at least two million dollars
($2,000,000) per occurrence and four million dollars
($4,000,000) per aggregate.
b. required ______
not required ______
Workers’ Compensation Insurance in compliance with
applicable federal and state laws, including Employers
Liability Insurance with limits of at least one million
dollars ($1,000,000) per occurrence.
c. required ______
not required ______
Automobile Liability Insurance covering owned, nonowned, and hired vehicles with combined limits for
bodily injury and property damage of at least one
million dollars ($1,000,000) per accident.
d. required ______
not required ______
Professional Liability Insurance on a claims made basis,
covering claims made during the policy period and
reported within four (4) years of the date of
occurrence. Limits of liability must not be less than
$1,000,000.
CAN I AMEND THIS CONTRACT?
YES, you can.
This section allows the Parties
to “Amend” the Contract when:
The Amendment is executed by
the Parties.
Executed by “authorized”
representatives of the Parties.
In writing
Upon mutual agreement.
27. Amendments. This Contract may
be amended only by written
agreement of the Parties,
executed by the Parties’
authorized representatives and in
compliance with all other
regulations and requirements of
law.
ATTACHMENT ____________
Amendment No. ___________
This amendment (“Amendment No. ____”) made this _____ day of ____________, 20__ by and between the University of Massachusetts _____________
(the “University”) and ___________________________ (the “Contractor”) collectively (the “Parties”) amends the contract for services made and entered
into by the Parties on ___________ (the “Contract”).
[Determine which “Whereas” clause is appropriate]
Whereas, the Parties wish to extend the term of the Contract;
Whereas, the Parties wish to increase the Contract amount by $ _______ to $ _______;
Whereas, the Parties wish to amend the Scope of Services to the Contract;
Whereas, the Parties wish to amend the Contract to include additional terms and conditions; and
Whereas, Section 27 of the Contract entitled “Amendments,” allows for the Parties upon mutual agreement to amend the Contract by executing a written
amendment.
Now Therefore, in consideration of the mutual provisions and covenants contained herein and in the Contract, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:
[Used if not already inserted in Section 3 of the Contract]
1.
The following shall be inserted in section 2 of the Contract entitled “Contract Amendments.”
“Attachment ____, Amendment No. ___, consisting of ___ page(s)”
[Insert your changes]
The Parties here to acknowledge and agree that, except as specifically amended by the terms of this Amendment No. ___, all of the terms, covenants and
provision of the Contract are hereby ratified and confirmed and shall remain in full force and effect throughout the balance of the term of the Contract.
From and after the date hereof, all references in the Contract to "the Contract" or “this contract” shall mean and be the Contract as affected by this
Amendment No. ___.
IN WITNESS WHEREOF, the Parties have caused this Contract to be executed by their respective duly authorized officers as of the date first above written.
[SIGNATURES]
NOTICE? OF WHAT?
The “Notice” section defines
HOW notice is to be made AND
WHERE/TO WHOM notice may
be made.
The Notice section is mainly
used to give “Notice” of a
breach of Contract as provided
under Section 11-“Termination”
The Notice must be in writing
Addressed to a Party listed
At the address listed
29.
Notice. Unless
otherwise specified, any notice
hereunder shall be in writing
addressed to the persons and
addresses indicated below
(Name, postal address, phone,
email address):
To the University:
__________________________
__________________________
To the Contractor:
__________________________
__________________________
WHO IS EXECUTING?
• The person executing the Contract must be “authorized” to
execute contracts on behalf of the University.
• The person executing the Contract for the Contractor, must be
“authorized” to execute contracts on behalf of the Contractor.
• Both must have the authority to BIND the parties to the terms
and conditions of the Contract.
Best Practices
•
•
•
•
•
Yes…
But at what cost?
Additional Review
Editing
Time Consuming
•Looking for the PURCs
•Problematic Terms
•Unacceptable Terms
•Recondite Language
•Conflicting Terms
• Can Cause Confusion
• Incorrect information in the preamble
• Create Potential Issues In Future
• Automatic renewal language
• Lack Clarity
• Language governing how the contract can be
amendment
• Notice provisions
• Language, Condition(s) or Term(s) that require the
University to agree to something that:
• Is prohibited law or regulation
• Against University Policy
• Creates an unreasonable amount of risk
• Examples:
• Language requiring the University to be sued in, or subject to, another state’s
law
• Arbitration clauses
• Confidentially and/or nondisclosure clauses
• Language requiring the University to pay the Vendor’s legal fees or other
enforcement costs
• Terms requiring University to indemnify the Vendor or any other party;
• Limitations of liability
• Use of the University Name and/or Logo
• Contracts or portions thereof that contain language requiring
specialized knowledge; or
• difficult to follow
• Examples:
• Trademarks
• Licensing or subscription agreements
• Insurance requirements
• Conflict: incompatibility or interference, as of one idea,
desire, event, or activity with another
• Example:
• The University requires that its contract be governed by Massachusetts
law
• The Vendor’s Contract includes a term requiring Alaska law to govern
• These terms are incompatible with each other and are therefore….
• Conflicting Terms!!!
• Where to look for Conflicting Terms:
•
•
•
•
•
•
•
Vendor’s Conflicting Terms and Other Unfavorable Conditions
Terms & Conditions
Vendors Payments Terms
Subscription
Sample Invoice
Scope of Service
Miscellaneous*
• Contract
• All exhibits, appendices, addendums, attachments
• Any other o documents referred to by, or incorporated into the
Contract, including:
•
•
•
•
•
response to RPF & RFB
statements of work or services
policies and procedures
insurance requirements
property or equipment descriptions
• Strike all Vendor provisions that relate to a provision in the CFS,
regardless of whether the Vendor’s provision conflicts with a
CFS terms.
• CFS terms should always control
• No reason for duplicate terms
• Examples:
• Acts of God
• Notice
• Entire Agreement
• Request the Vendor remove the state's name and insert Massachusetts as the
governing law and jurisdiction
• Request that the choice of law and/or Jurisdiction section remain silent: that
is, agree not to have a choice of law section and have the Vendor remove
the clause entirely*
• If the Vendor insists on its state law or jurisdiction controlling, you must have
the Vendor include the following language at the end of the clause:
"Notwithstanding anything herein, nothing in this [Contract, Agreement, etc.]
shall operate to waive the sovereign immunity of the Commonwealth of
Massachusetts*
• Never agree to the jurisdiction or the laws of another state if the Contract
contains language requiring the University to indemnify another party;
• Pursuant to the Massachusetts Public Records Law (M.G.L. Ch. 66 §10), the
public has the right to review, inspect and copy University records unless a
specific exemption allow the withholding of a record
• The existence of a service or goods contract itself can never be confidential
• Unless absolutely required, request that any Confidentiality and/or NonDisclosure clause(s) be deleted
• If the Vendor will not accept the deletion of such a Clause, request that the
following language be inserted at the beginning of the clause: “To the extent
permissible under Massachusetts Law…”
• Eliminate provisions requiring the University provide notice prior to disclosure
• Contact the OGC regarding contracts that involve proprietary interests
and/or trade secrets
• Legal Fees and Cost
of Enforcement
• Amendments.
• Always confirm that the
• Request Vendor remove any
Contract contains a provision
language which suggest that a
requiring that amendments be
party is entitled to cost,
in writing and signed by both
expenses or fees incurred in
parties.
the enforcement of the
contract
• If not, request that the Vendor
include the below language as
• Request Vendor remove any
a separate numbered
language which suggests that
paragraph :
the prevailing party shall be
entitled to recover court costs
• Amendments. No amendment to this
and/or attorney fees
Agreement shall be effective unless in
writing and signed by authorized
representatives of both parties and
complies with all other regulations and
requirements of law.
• Request Vendor to remove the automatic renewal language
and replace it with a mechanism that allows the University to
renew the contract at its option e.g.,
• “The University may, by providing written notice no later than 30 days
before expiration of the initial term, renew this [Contract, Agreement, etc.]
for an addition term of [insert time period].”;
• If the Vendor will not accept the above said language, request
the Vendor remove words such “is/shall/will automatically” and
insert “may be.”
• As a public entity the University is prohibited from indemnify
Vendor or other parties to the Contract.
• Vendors requesting additional information:
•
“The University, as an entity of the Commonwealth, is prohibited from pledging the
credit of the Commonwealth without the approval of a two-thirds vote of the
Massachusetts Legislature. See Article 62 of the Massachusetts Constitution, as
amended. The Massachusetts courts have construed statutory authorizations for public
entities to enter into contracts as not authorizing indemnity clauses. Lovering v.
Beaudette, 30 Mass.App.Ct. 665, 669 (1991); Raisman v. Cunningham, Inc., Civil Action
No. 93-5070-G (Super. Ct. 1995).”
• Issues with using the term “to the extent permitted by
Massachusetts law… ”
• Providing notice of prohibition (cover letter)
• If the Vendor refuses to remove the language contact the OGC
• In some instances we might want to agree to limit the Vendor’s
liability to some specified amount.
• If so, we should exempt any indemnification of the University
from the limitation.
• This language should be revised by requesting the Vendor to
insert the following language at the end of the Limitation
section:
“Notwithstanding the foregoing, the limitations of liability under this
section shall not apply to a willful breach of this agreement or to any
indemnification provided by the Vendor to the University under Section
_____ of the [Contract, Agreement, etc.].”
• It is recommended that non-binding arbitration clauses be
deleted.
• Binding arbitration clauses are acceptable so long as:
• (1) the language does not require the arbitration to be conducted outside of
Massachusetts or in accordance with another state or country’s laws and
• (2) the arbitration clause also includes language requiring the parties to
participate in mediation prior to requesting arbitration.
• The proper procedure for correcting arbitration clauses
containing unacceptable requirements is to:
• request the Vendor remove any language requiring arbitration be
conducted outside of Massachusetts
• request the Vendor to remove any language requiring arbitration be
conducted in accordance with another state or country’s laws
• The proper procedure for correcting arbitration clauses
that do not include mediation language is to request the
Vendor add the following language:
• Mandatory Mediation. In the event a dispute shall arise between the parties to this
[Contract, Agreement, etc.], the parties will make a good faith attempt to resolve any and all
claims and disputes by submitting them to mediation before resorting to arbitration. The
mediation will involve no formal court procedures or rules of evidence and the mediator shall
not have the power to render a binding decision or force an agreement on the parties. The
mediation of any claim or dispute must be conducted by a mediator who has had both training
and experience as a mediator of commercial matters. Within 30 days after the selection of the
mediator, the parties will meet with the mediator for one mediation session of at least four
hours. If the claim or dispute cannot be settled during such mediation session or mutually agreed
continuation of the session, either party may give the mediator and the other party to the claim
or dispute written notice declaring the end of the mediation process. All discussions connected
with this mediation provision will be confidential and treated as compromise and settlement
discussions. Nothing disclosed in such discussions, which is not independently discoverable, may
be used for any purpose in any later proceeding. The parties agree to share equally in the
costs of the mediation.
Who Needs to Sign?
• Signing a Contract on behalf of the University is an important
responsibility and should only be done by someone who understands
of the obligation being undertaken and has proper authority.
• Only certain individuals are authorized to contractually bind a
University Campus.
• A person who signs a Contract on behalf of the University without
authority may be subject to disciplinary action or in some cases could
be personally liable for the obligations, debts and risks under that
Contract.
• The University will not be bound by the terms of a Contract signed by
an individual without authority unless an Officer of the University
subsequently agrees that the University will honor the Contract.
• Ultimate signature authority is held by the University of
Massachusetts Board of Trustees.
• The Board has delegated most of its signature authority the
President and Chancellors. The Chancellors, in turn have redelegated authority to principal officers at their respective
campuses.
• These principal officers may further delegate signature
authority.
• The person who delegates authority retains responsibility for
the actions of the person to whom authority is delegated.
• While only employees with delegated signature authority may
bind the University by signing a Contract
• it is a common practice to require employee(s) working on a
contract to sign it as a way of:
• certifying that the contract memorializes the terms of the agreement
• verifying it is ready for execution.
• These Best Practices do not apply to internal memoranda of
understanding or similar agreements that govern internal
relationships between University schools, business units,
department or divisions.
• An employee who has a conflict of interest with respect to a
Contract does not have authority to sign the Contract.
• Promote Efficiency
• Have the lowest level employee with proper
Authority sign
• Consult:
• Signature Delegation Chart
• Letters of Delegation
• Office of General Counsel reviews Contracts but does not sign
Contracts for the University.
• While the OGC is not responsible for review of the business
terms it may provide guidance on how certain terms can affect
the University.
• Contracts can include terms that may seem innocuous or insignificant to
administrators, but may be legally important.
• All personnel are encouraged to consult with the Office of
Counsel if they have any question about the meaning of
language in a Contract.