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Updated: 09/10/2014

Confidentiality or Non-disclosure agreements
Issues in Industry Research Agreements
Delegation of Signature Authority Chart (pdf)
To Sign or Not to Sign (ppt) (Originally created by UNC-W)
Contracts Library

What is a contract?

A contract is an agreement between two or more parties to do or not do a particular thing. There must be a common understanding among the parties as to the essential terms, there must be mutual obligations, and there must be "legal consideration," meaning that something of value is exchanged.  A contract may be called many different things and still be a contract.  The common contracts seen on the university campus are a grant, memorandum of understanding, memorandum of agreement, affiliation agreement, agreement or contract.  Further, a document may be a contract even if the university is not paying anything for the item or service that we are getting in return.  If you have a question as to whether the document you are reviewing is a contract, feel fee to contact the Office of General Counsel.

While some contracts may be oral; the University and State of North Carolina require that all contracts for the University be in writing.  This is accomplished through a written contract or a purchase order or by use of your P-Card.

When a contract for goods is written, a court will enforce the terms of the written contract and will generally not consider prior oral agreements that conflict with the written terms. (For example, see the "Parole Evidence Rule," G.S. 25-2-202(a)). Further, an agreement may be a binding contract even though neither party pays money to the other.

Examples of contracts include: agreements for purchase or rental of goods or services; nondisclosure agreements; agreements that set terms or restrictions on the acceptance of "gifts"; a sale, lease, and sometimes even the donation of University goods or services; liability waivers; settlements of disputes; licenses; student or faculty exchange agreements; memoranda of understanding or cooperation; hotel reservations that require written agreement; the right to use the University name or resources, etc. The concept of a "contract" is quite broad, so to be on the safe side you should assume that any agreement or understanding with another party could be a contract.

How can you tell if an agreement is a University contract?

If you arrange a contract or agreement (bearing in mind that authority to sign an agreement is very limited, as noted below) while acting in the scope of your employment for the University, it is likely a University contract. There must be a University interest at stake.

In addition, the agreement must be within your employment duties as authorized by your supervisors. In general, agreements are not University contracts if they are entered on behalf of a separate legal entity such as a foundation (including those affiliated with the University), or a student organization, or purely private interests. Further, it is unlawful to use a public purchase for private benefit (G.S. 143-58.1).

Who has authority to enter or approve contracts for NC State University?

As a general rule, only the Chancellor and certain Vice Chancellors have the authority to execute (sign) contracts for the University. Anyone else who enters into a contract that purports to bind the University or its subunits is acting without authority and could be held personally liable for the breach of the contract or for the full value of the contract. (See G.S. 143-58).

In general, the Vice Chancellor for Finance and Business has authority to sign all contracts; the Vice Chancellor for Research has authority to sign contracts for sponsored programs; the Vice Chancellor for Extension, Engagement and Economic Development has authority to sign contracts for extension service agreements; and the Provost has authority to sign EPA appointment letters, academic agreements and international exchange and academic compensation agreements. These Vice Chancellors have delegated in writing certain parts of their signatory authority to specified individuals. (See Delegation of Signature Authority Chart)

Small purchases (up to $5000) may be done by departments without going to a Vice Chancellor (or designee) for approval, as long as there is no formal purchase order or written contract or agreement involved. (See Basic Purchasing Information webpage)

Purchases between $5,000 and $500,000 are normally executed through a purchase order issue from the NC State Purchasing Department. Bids are sought and standard Terms and Conditions are used in lieu of obtaining a Vice Chancellor's signature.

Does the Office of General Counsel have recommendations about what types of contract terms to accept and what types to modify?

Yes. The first recommendation is that you review the list on the Contracts Library website to determine if there is a standard agreement that fits your situation.

The second recommendation is that you read the other party’s contract terms closely and understand the business risks they pose. If you don't understand certain terms, ask Purchasing or the Office of General Counsel what they mean.

The third recommendation is that you compare the terms to the Contract CHECKLIST. This will enable you to anticipate potential areas of disagreement between the University and the other party to the contract, and possibly work around those concerns before the contract goes to Purchasing for review and modification.  Remember that you must have Purchasing review any contract that another party wants someone at the University to sign, even if the other party is giving your department the good or service at no cost.