University Contract Policy

I. Purpose

This policy governs the proposal, review, approval and retention of any contract that binds the University of North Carolina Asheville (“University Contract”).

II. University Contracts Defined

A University contract is defined as an agreement between two (2) or more parties, one of which must be the University or any of its subunits, intended to have legally binding effect.  The parties must have a common understanding as to the essential terms; there must be mutual obligations; and there must also be something of value exchanged (“consideration”).   The University must have an interest at stake.

Examples of University contracts include: agreements for the purchase or rental of goods or services; nondisclosure agreements; agreements that set terms for acceptance for gifts; a sale, lease, or donation of University goods or services; liability waivers; athletic agreements; settlement of disputes; licenses; student or faculty exchange agreements; memoranda/letters of understanding or cooperation that making binding commitments; contracts with hotels, convention centers or other facilities which require a written agreement; instructional agreements; assignment of the right of a person, group, or agency to use the University’s name, logo or resources; etc. The above list is not all-inclusive and if you are entering into an agreement, regardless of what it might be called, in which the University or a University department is involved, it is best to presume that you are negotiating a “University contract.”  If you are unsure whether the proposed agreement may or may not be a University contract, contact the University General Counsel for advice.

In general, agreements are not University contracts if they are entered into solely on behalf of a foundation (including those affiliated with the University), a student organization, or purely private interests.  The term “University contract” also does not include agreements between different units within UNC Asheville.

III. All University Contracts Must be Made in Writing, Must be Reviewed by the University General Counsel and Must Bear an Authorized Signature.

Even though unwritten, oral agreements may be held by courts to be legally binding in certain circumstances, this Policy requires that all University contracts (1) be made in writing, (2) be reviewed by the University General Counsel, and (3) bear an authorized signature as specified in Sections 3 and 4 of this Policy. Oral agreements are not permitted and will not be recognized or honored by the University. The maker of such an unauthorized contract may be held personally liable for it and for any damage caused to the University.

IV. Administrative Review

A. Responsibilities of Persons Recommending a University Contract

University contracts may begin either as a draft proposal from a University unit or as a draft sent to the University by a non University party (e.g. software vendors, other not for profit entities, and contractors).  In either case the University unit that is recommending that the University enter into a contract is responsible for determining that: (1) the contract language accurately reflects the current state of negotiations; (2) the contract meets programmatic and University mission requirements; (3) the contract is in the best interests of the University; (4) compliance with the obligations it places on the University can be assured; and (5) the contract is sufficiently clear and consistent.  Additionally, if the proposed contract may implicate University units or resources outside of the recommending unit (e.g., financial obligations beyond the unit’s budget, telecommunications or IT support, space requirements, facilities support, etc.), the contract must be reviewed and approved by those other units or by fiscal authorities. After a satisfactory draft has been developed that draft shall be forwarded to the University General Counsel for legal review.[1]

B.  Review by the University General Counsel

1. Review Prior to Execution and Prior to Effective Date

All University contracts must be approved as to legal form and validity by the University General Counsel. Such approval is to be endorsed in writing on the contract prior to final execution by the parties and prior to the effective date of the contract.  Performance of the contract may not begin prior to full approval and execution, i.e., backdating contracts is not permitted.

2. Exceptions.

Review and endorsement by the University General Counsel shall not be required with respect to individual contracts or extensions or renewals thereof if the form of the contract has received prior review and endorsement by the University General Counsel as a standard template and contains no substantive changes or additions other than those pertaining solely to the description of the project, the amount involved, and the term of the contract or extension (e.g., grant contracts conforming to the templates approved by General Administration and State purchase order forms).

3. Scope and Purpose of Review by the University General Counsel

The North Carolina State Attorney General’s Office has issued instructions mandating that certain “prohibited clauses” may not be included in any contracts into which a state agency enters (UNC Asheville is a State agency). Additionally, certain North Carolina statutes and regulations govern the contents of State contracts (which include all University contracts). The Office of the University General Counsel will review each contract to ensure that:

• it does not contain any of the prohibited clauses;
• it is consistent with federal and state laws;
• it is consistent with UNC Asheville rules and regulations;
• risk management concerns have been reasonably addressed; and
• it is consistent with any predecessor documents.

It is important to understand that the University General Counsel is not necessarily qualified to determine whether the contract represents “the best deal” for the University with regard to price, quality or efficacy of goods and services. That determination is the sole responsibility of the proposing unit(s).

C. Additional Administrative Reviews

The University General Counsel shall determine what other institutional reviews are necessary prior to submission of the contract for signature and will coordinate obtaining the appropriate reviews.

Following those reviews, the draft contract will be returned to the initiating party for submission to the non University party or parties.  If the non University party proposes changes, those changes must be reviewed in accordance with the process described in this Section.

V. Authorizing Signatures & Delegation of Authority

As a general rule only the Chancellor and Senior Staff Members have authority to contract for and bind the University. Anyone else who enters into a contract that purports to bind the University or its subunits is acting without authority and may be held personally liable for the contract. Each Senior Staff Member will sign any University contract that involves his or her division; however, the Chancellor and Senior Staff Members may delegate authority for signing University contracts within their scope of authority to other University employees. Such delegations must be made in writing and must specify the extent and duration of the delegated authority.  Copies of those written delegations will be sent to and maintained by the University General Counsel. A list of delegations will be published on the University web site.

In addition to signature by the Chancellor or relevant Senior Staff Member, the Vice Chancellor for Budget and Finance must approve and sign any contract that obligates University funds in the amount of $50,000 or more except that the Vice Chancellor for Budget and Finance may delegate his or her signature authority for contracts for repair, renovation, or construction of facilities or infrastructure if the amount does not exceed $500,000.  Amounts obligated in installments or by multi-year contracts shall be considered cumulatively in determining whether the total amount of the contractual obligation meets this threshold.

VI. Retention of University Contracts and Public Records Compliance

A.    Retention

Each Senior Staff Member shall designate a repository office for retention of contracts originating from his or her division that bear the original signatures of all the parties.  Contracts involving multiple divisions and contracts signed by the Chancellor shall be kept in the Office of the University General Counsel.  Questions as to the appropriate office responsible for retaining a University contract shall be resolved by the University General Counsel.

As a general rule, original signed contracts should be kept for 5 years after the date of the expiration or termination of the agreement.  However, reference should be made to the University of North Carolina General Records Retention and Disposition Schedule at: http://www.records.ncdcr.gov/schedules/unc_system_general_schedule.pdf to determine how long particular contract documents should be kept before being purged.

B.     Public Records Act Compliance

All University contracts are public records within the meaning of the North Carolina Public Records Act and are subject to inspection by the public unless a statutory exception applies.  All requests by the public for copies of University contracts should be referred to the University General Counsel.

VII. Contracts Made in Violation of this Policy

Contracts made in violation of this Policy, i.e., without proper authorizing signatures or without review by the University General Counsel are voidable and may be voided at the sole discretion of the Chancellor and Senior Staff Members.

Employees who make or sign contracts in violation of this policy are subject to disciplinary action up to and including dismissal and may be held personally liable for the contract and any damages caused to the University.