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Contract Procedures at Baylor

Dec. 11, 2012

These are a few of the primary issues to be addressed when seeking to have Baylor enter into contracts with vendors of goods and services. More information on these and other matters involving contracts and agreements can be found in the Policy and Procedure for Contracts, the Substantive Checklist for Review of Contracts, the Contract Procedure Checklist, and the Contract Execution Cover Sheet or contact any member of the Office of General Counsel (OGC).

SIGNATURES: In accordance with authority from the Board of Regents, all contracts (which include informal agreements and understandings) that purport to legally bind Baylor can only be signed by the President, or a Vice President when joined by the corporate secretary or assistant secretary. This is true regardless of the value of the contract. ANYONE SIGNING A CONTRACT WITHOUT AUTHORITY IS SUBJECT TO BEING PERSONALLY LIABLE FOR THAT CONTRACT. Only the President may further delegate signature authority. Such delegation must be in writing and set forth the scope of the delegation. If the President has delegated authority, the person with delegated signature authority must be joined by the corporate secretary or assistant secretary in the execution of a contract. A Vice President may not delegate signature authority.

ESSENTIAL ELEMENTS: Most contracts are reviewed by the OGC before being presented to the President or a Vice President for review and signature. Before the contract is sent to the OGC or President/Vice President, the person in the department in charge of the contract must be sure that it sets out the full and correct names of the parties to the agreement; that it clearly and accurately expresses the subject matter of the agreement (that is, it sets out the "deal" that the department wants Baylor to enter into); and that it sets out the consideration (that is, what is given and what is received).

MANAGING THE CONTRACT: The contract should not have any terms or provisions that the department cannot perform, and the department must keep a copy to be sure that it is doing all that it has agreed to do. In other words, the person or persons wanting the contract must make sure they know what they are agreeing to do, make sure that they do everything required, and make sure the other party to the contract does everything that it has agreed to do. No one else can manage it other than the persons in the department wanting the contract.

SOME OF THE TERMS AND ISSUES TO WATCH FOR:

Indemnity and hold harmless clause- Black's Law Dictionary defines this as an arrangement whereby one party assumes the liability inherent in a situation, thereby relieving the other party of responsibility. If the contract contains an indemnity, hold harmless, exculpatory, or waiver clause, or if the proposed agreement asks Baylor to waive liability or waive a warranty, or if the other party attempts to limit its liability to acts of "gross negligence" or "willful misconduct," the contract must be forwarded to the OGC for review.

Antidiscrimination clause- As a religiously-controlled institution of higher education, Baylor is entitled to discriminate on the basis of religion under the First Amendment of the United States Constitution in general, and specifically under §703(e)(2) of Title VII of the Civil Rights Act of 1964. In addition, the U.S. Department of Education has granted Baylor a religious exemption from certain provisions of Title IX of the Education Amendments of 1972, which prohibits discrimination on the basis of gender. If Baylor is asked to agree not to discriminate on the basis of religion (which includes discrimination on the basis of sexual orientation), this contract term must be revised. Contact the OGC for assistance.

Venue and jurisdiction outside of Texas- If possible, the contract should provide for jurisdiction and venue in Texas. If it instead provides for jurisdiction and venue in any other state, the agreement must be forwarded to the OGC for review.

Remember that contracts returned by one party with handwritten corrections require initials by both parties.

Be sure to contact the Office of General Counsel if you have any questions related to contracts.