Contract Negotiation Reminders
Sometimes exchanging contracts with third parties becomes so routine that participants forget each provision’s significance. Don’t accidentally omit key items or fail to use your school’s negotiating power to its fullest potential.
Educate your personnel about contract basics and remind them of these key points when they negotiate contracts.
Frame Your Position
Always seek the best possible terms for your institution. Preparation, including taking time to reflect on your school’s position and leverage points, strengthens your negotiating position.
- Follow all internal requirements. Administrative protocols help institutions with proper contract review, documentation, and fulfillment. Whether your institution has a centralized contract management system, an online dashboard, or a mandated internal review process, follow these required steps and processes.
- Analyze each provision in advance. Before engaging in discussions with the outside party, determine what provisions are most necessary and their level of importance. This will help you frame conversations with that prioritization in mind.
- Consider the participants. Before negotiating contract terms, consider who should participate. Depending on the type of contract and your institutional procedures, involve legal counsel in the contract review, negotiations, and/or ratification. Assess who else to involve (for example, representatives of the office or department to whom the contract directly applies).
- Stay calm and professional — even when matters get contentious.
Protect Your Institution
Contracts memorialize agreements and expectations, so they should include protections for your school. No matter who the other involved parties are, protect your institution’s interests by putting key provisions in place.
Never rely on familiarity or an established relationship with the contracting party in lieu of specific contract terms. Always be explicit about expectations, liability, and significant legal terms.
Legal Compliance
Work with counsel to establish uniform provisions that meet all applicable laws and can be used routinely for all or some contracts. These routine provisions may include arbitration clauses, choice of law provisions, or other terms on which to rely if disputes arise.
In addition, create clear guidelines for the types of contracts that may require more guidance or review from legal counsel.
Insurance Coverage
Establish protocols to gain your institution’s required insurance coverage from third parties in contracts. Ensure through your review process that contracts without appropriate coverage may not be bound.
Indemnity
Shifting some or all liability for third-party claims often requires negotiating a risk allocation provision. Avoid unfavorable indemnity provisions and teach contracting personnel how to negotiate and draft valid indemnity and allocation provisions (and when to reach out to legal counsel if the other party won’t agree).
Use Clear Terms
Attention to detail is of utmost importance in contracting. In each review, check for all necessary provisions and that they’re drafted in your institution’s best interests. Include:
- Termination and/or renewal. Decide in advance whether the contract will end on a certain date or whether you’ll provide the option to renew (and if so, provide details how). Conversations about the planned time frame are insufficient. Memorialize these details within the contract.
- Privacy and data protection. Address issues of confidentiality, privacy, and data protection as appropriate to the situation and parties. In situations involving student information, it is important for all contracting parties to comply with laws such as the Family Educational Rights Privacy and Act (FERPA).
- Academic freedom and intellectual property. Contracts with faculty or involving faculty work product always should consider academic freedom principles. Additionally, when contracts involve work product that your institution’s students or employees create with institution resources or through institution funds, include contract provisions addressing intellectual property rights. Seek to protect your institution’s rights to partnerships, work product, and intellectual property to the greatest extent possible.
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About the Author
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Christine McHugh, Esq., ARM
Associate Vice President of Risk Management
Christine is responsible for providing day-to-day management of the Risk Management department’s functional operations and works cross-functionally to advance the department’s ability to meet UE goals, objectives, and provide sound thought leadership to the educational community. Before being promoted to the role in June 2024, Christine was a Senior Risk Management Counsel. Her areas of expertise were employment law, sexual assault prevention, protection of minors, traumatic brain injury, and diversity, equity, and inclusion. Prior to joining the Risk Research team, she handled UE liability claims for several years. She previously practiced employment and higher education law.