Contract Review & Approval Procedure

1. Overview and Policy Statement  
This document describes the legal review requirements for SHU contracts, the required reviews by the initiating departments, and outlines the signature authorities for contracts within the University. Please read the document in its entirety, as it contains important information that you may need when submitting a contract for legal review.

Individuals have the authority to enter into negotiations, approve and/or sign contracts on behalf of the University only pursuant to (1) a resolution of the Board of Trustees; (2) a valid delegation of authority from the President or the University Board of Trustees.

This Policy is intended to ensure that any commitment of University resources and all related agreements obligating the University are properly reviewed and approved. This Policy describes necessary steps in the contract review process and identifies the individuals who are authorized to commit institutional resources on behalf of the University through agreements executed in its name.


2. Legal Review of SHU Contracts  
A contract is any legally enforceable agreement whether or not it is titled “contract.” Contracts include, but are not limited to, letters of agreement, lecture or performance agreements, licenses, memoranda of understanding, and terms and conditions related to all types of transactions. All SHU contracts must be in writing. An agreement may be a binding contract even though one party provides something of value to the other party at no charge. Therefore, the University may have an interest even though there is no financial transaction. The correct legal name of SHU, which should appear on all of SHU’s contracts, is “Sacred Heart University, Inc., a Connecticut Nonstock Corporation”.


2.1 Contracts Requiring Legal Review  
Generally, contracts to which Sacred Heart University is a party must be reviewed and approved by General Counsel prior to signing. Signing a contract on behalf of SHU may have legal implications for the university. Therefore, contracts signed without obtaining legal approval may, if the university chooses not to honor the contract, result in personal liability for the person signing the contract. University administrators, faculty, staff or students who enter into unauthorized agreements may also be subject to disciplinary action, up to and including dismissal. General Counsel cannot review or provide legal advice regarding personal or non-SHU contracts. The next section lists the types of SHU contracts that are exempt from legal review.

2.2 Exemptions to the Legal Review Requirement
The exemption from legal review and approval does not exempt contracts from all other applicable and
required SHU approvals, including business office review, depending on the nature of the contract. The
following types of contracts are currently exempt from legal review:


I. Routine purchase orders, bills of sale, invoices, if they do not contain any terms and
conditions; or

II. Renewals of existing contracts approved by the General Counsel within the previous five
years, unless the terms and conditions of the renewal are different that those
previously approved; or

III. Pre-approved and unmodified standard university contract templates, unless modifications
to the terms and conditions are needed. However, these contracts may not be inappropriately
used. For example, a Service Agreement must not be used to contract with providers of
supplies.


3. Contract Review Process    

3.1 Initial Review by the Initiating Department
This review should focus on the business implications of the terms and conditions of the contract. The initiating department must determine what it can or cannot agree to, and what needs to be negotiated with the contractor. Examples for issues to consider during this review include:

I. The contract terms and conditions, including duties of the parties, are clear, consistent and
acceptable to SHU and the department and the responsible department has in place the ability
to meet its obligations under the contract.
II. The Division, college, department, or unit has the necessary funds and resources for this
contract.
III. The contract is appropriate and serves the unit’s mission and responsibilities.
IV. The services provided are the most feasible for the University in terms of quality and
cost.
V. The contract includes the entire understanding between the parties, without additional
oral explanations or promises that are not included in the contract.


3.2 Legal Review

(a) Contract reviews normally take up to ten business days. In those cases where the contract requires complex negotiations over terms and conditions, a new contract needs to be drafted, or if there is a signing deadline, you are encouraged to include General Counsel in the process as early as possible.

Please submit a draft of the contract in advance to allow sufficient time for thorough legal review. If you need General Counsel to draft the contract for you, then more time will be needed. You must plan appropriately. The legal review process cannot be compromised due to time constraints.

The review by General Counsel insures that:

I. SHU abides by State and Federal laws.
II. SHU is operating in accordance with the policies and procedures of the Board
of Trustees of the University.
III. SHU does not agree to any prohibited clauses.
IV. Risk Management and Business Office concerns have been addressed. General Counsel will forward the appropriate contracts to the Risk Manager for review of insurance requirements and the Purchasing Manager to ensure purchasing procedures are met and verification that funds are available to meet our obligations called for in the contract.
b) After reviewing each contract, the proposed contract will be returned to the requesting
department with a stamp indicating that:
I. The contract is approved as to legal form, in which case the signing authority
may sign the contract; or
II. The contract requires (not with respect to business terms) modifications to protect the University’s legal interest, in which case the changes will be communicated to the contractor by General Counsel, and after the contractor has agreed to all the modifications the contract will then be stamped by General Counsel indicating the contract is approved as to form and the signing authority may sign the contact; or
III. The contract is returned without approval as to legal form.


It is important to know that the legal review determines the legal validity of a contract, as opposed to whether the contract is appropriate from a business and administrative perspective. The final decision to enter into a contract is the responsibility of the SHU department initiating the contract, and should take place only after all applicable university approvals have been obtained.


4. Signature Authority  
Only authorized individuals may sign contracts on behalf of SHU. The appropriate signature authority depends on the value and type of contract, as described below:

Where the total transactional value over the life of the contract exceeds $100,000.00 but not greater than $5,000,000.00:

The President


Where the total transactional value over the life of the contract exceeds $50,000.00 but not greater than $100,000.00:

The President or the joint signatures of the Senior Vice President for Finance & Administration and the Provost & Vice President for Academic Affairs.


Where the total transactional value over the life of the contract exceeds $10,000.00 but not greater than $50,000.00:

The President or the Senior Vice President for Finance & Administration or the Provost & Vice President for Academic Affairs.


Where the total transactional value over the life of the contract exceeds $5,000.00 but not greater than $10,000.00:

The President or the Senior Vice President for Finance & Administration or the Provost & Vice President for Academic Affairs or any Vice Provost or any Vice President or a Dean.


Where the total transactional value over the life of the contract does not exceed $5,000.00:

The President or the Senior Vice President for Finance & Administration or Provost & Vice President for Academic Affairs or any Vice Provost or any Vice President or a Dean or the Account Manager for the transaction or any person to whom authority is delegated in writing or electronically by the President or a Vice President.


5. Conflicts of Interest  
It is the responsibility of all University officials to ensure that the University does not knowingly enter into contracts that present conflicts of interest. Responsible official must accordingly exercise their authority in a manner consistent with applicable conflict of interest policies. If a conflict arises for a responsible official, he or she must disclose the conflict promptly to his/her supervisor before entering into contract negotiations or contract review and excuse himself/herself from any involvement in the contract negotiations or review. In such cases, the supervisor shall assume responsibility for the contract or arrange for the appointment of a substitute responsible official. Questions regarding interpretation of University conflict of interest policies may be direct to the University’s General Counsel.


6. Questions and Additional Information
Questions regarding the contract review process, contract negotiations, new contracts, or contract questions in general should be directed to the University’s General Counsel.
Update: March 2014