Introduction to Contracts
Per OBFS Policy 19.1:
A contract is an agreement between parties that creates legally enforceable rights and obligations. Contracts may be referred to by a variety of terms, including but not limited to agreements, purchase orders, proposals, memoranda/letters of understanding, click-to-accept online terms and conditions, addenda, or amendments. Whatever it is called, if the document is intended to create legally enforceable rights and obligations, it should be treated as a contract under Section 19 Contracts. Agreements between units of the system are not contracts and are not subject to this policy.
Note: Signature Authority. The System Comptroller is the general fiscal officer of the Board of Trustees of the University of Illinois System and is authorized to approve and execute, on behalf of the Board, contracts not expressly requiring prior, specific Board authorization. The Comptroller may delegate contract execution authority. Delegates who sign contracts on behalf of the Comptroller must have express authority to do so. Comptroller delegates are responsible for ensuring all required approvals are received and appropriate legal review is complete, before affixing the Comptroller’s signature to a contract.
Warning: If you sign a contract and are not an authorized delegate, the university is not a party to the contract unless it decides to ratify your unauthorized act. “Apparent Authority” does not generally apply to transactions involving the State of Illinois. If authorized university officials decline to ratify a contract, the other party’s remedy for any breach or recovery on a contract claim will be from the person who signed without authority.
Types of Contracts:
- Contract for the Procurement of Supplies and Services
The Procurement of Supplies and Services Contract template is embedded into Contracts+. Please choose “template contract” in your Contracts+ contract request, and the contract will be generated by the assigned contract coordinator in the Purchasing and Contract Management Office.
- Services Under $10,000
When a requisition is submitted for the types of services that were previously handled on the Contract for Services Under $10,000 template, the resulting purchase order will serve as the contract. Therefore, there is no need for a separate mutually executed contract, nor for the department head to sign a separate template agreement. The university’s purchase order terms and conditions will apply.
This update only applies to purchases that previously would have been handled on the Contract for Services Under $10,000 template. In situations where a mutually executed contract is still required, the University recommends utilizing the Contract for Procurement of Supplies and Services template, which must be processed by Purchasing.
- General Services (other than Professional and Artistic)
Examples of these services include, but are not limited to: security guard services, transportation services, clothing rental and cleaning, laundry, film processing, janitorial work, window washing, rubbish and waste removal, and service and repairs to equipment.
- Professional and Artistic Services
An essential element distinguishing professional services from other services is confidence, trust and belief in not only the ability but also the talent of the individual(s) performing the services. Professional and artistic services are primarily for intellectual or creative skills. Contracts for services involving primarily manual skills or labor are not considered professional and artistic services contracts.
The following are examples of Professional and Artistic Services as defined by the Illinois Procurement Code:
- Clinical Psychology
- Custom Produced Art
When utilizing a Professional and Artistic Service, a two-party contract and a posting to the Illinois Procurement Bulletin will always be required.
This template agreement is used for all University-provided services that exceed $10,000 in revenue. Units complete the fillable fields in the template and then upload the template as an attachment with a Contract Request in Contracts+.
The Revenue-Generating Agreement (Under $10,000) template has been pre-approved for Unit Head execution. When this agreement is used with no changes, Unit Heads have been delegated the authority to sign this template on behalf of the Comptroller of the University. When changes to the template are requested, Units complete the fillable fields in the template and then upload the template as an attachment with a Contract Request in Contracts+.
- Technical Testing Agreements (TTA) – Formerly processed by Sponsored Programs Admin.
- TTA Under $10k template (Note: This template, with no changes, may be signed by Unit Head)
- TTA Over $10k template
- TTA Amendment
Technical testing is a specific service by which the University uses unique University equipment or facilities to test provided materials/items and deliver results without interpretation or analysis.
- Facilities Use Agreements (FUA) – Formerly processed by Sponsored Programs Admin.
- FUA Under $10k template (Note: This template, with no changes, may be signed by Unit Head)
- FUA Over $10k template
- FUA Amendment
FUAs set forth the terms under which the University will provide permission for a third party to use specific University facilities, equipment and resources for research and development purposes. Examples of Facility Use: Use of research lab, use of specialized equipment or computers.
No Funds Contracts
The Course Project Master Agreement template is used when a company or organization seeks to partner with the University to provide student experiential learning opportunities. Students generally receive course credit for their projects, and no funds are associated with these partnerships.
The Clinical Education Affiliation Agreement is used for student internships in clinical/healthcare settings, for example, where students will work with Protected Health Information (PHI), patients, patient medical records, or other healthcare information. Multi-year master agreements can be executed with institutions to allow multiple students to intern with the institution over multiple years (up to 5 years).
The Non-Clinical Affiliation Agreement is used for student internships in non-clinical/non-healthcare settings. Multi-year master agreements can be executed with institutions to allow multiple students to intern with the institution over multiple years (up to 5 years).
Hybrid Contracts contain both Payable and Receivable components. If you have questions about these unique agreements, please contact the Purchasing and Contract Management Office.
Other Issues to Consider
- Click-through Agreements
A “click-through” agreement is one whereby the user/buyer is required to click to accept the terms and conditions. This is considered a contract, and only authorized delegates of the Comptroller may accept terms that financially bind the University. If you encounter a “click-through” agreement, do not click to accept. The Purchasing and Contract Management Office must review the terms and conditions. Please upload a copy of click-through terms to Contracts+ to begin that review.