Q: When may I sign, on behalf of the University, a contract supplied to me by an outside vendor of goods or services?

A: The University may enter into contractual relationships with outside vendors using a variety of contract forms, but two issues must be considered:

• (1) Is the contract form supplied by the vendor acceptable?
• (2) Who has authority to sign the contract on behalf of CSU?

1. Contract Provisions

Vendors often request or insist upon the use of their own contract forms when supplying goods or services to the University. Depending upon the type of transaction involved, the amount of money being spent and the terms and conditions of the particular contract form, vendor contracts may or may not be acceptable as written.

Certain common contractual provisions are not suitable for use in transactions with CSU because they contain provisions which violate state laws and/or regulations. For example, it is almost always improper to sign a contract containing any clause requiring CSU or any of its departments or employees to "indemnify" or "hold harmless" any person or entity from potential claims or damages. Likewise, it is usually improper to agree to limit any claims or damages by CSU against the contractor, if such limitations may relieve the contractor of liability for personal injury or property damage caused by the negligent or intentional acts of the contractor or its employees or agents.

Examples of expenditure contracts which are not necessarily improper, but which require special review and approval, include those allowing the contractor to use or reproduce the CSU name, logos, or trademarks; any contract impacting upon the use of CSU land or building space; and agreements addressing confidentiality or intellectual property issues.

When negotiating contract terms with an outside vendor, look for these improper or questionable provisions and attempt to have them deleted from the contract or amended to conform to the rules noted above. In addition, most vendor-supplied contracts must have a CSU Contract Acceptance Form attached to them prior to be submitted for approval.

Once you have negotiated what you believe to be an acceptable agreement and the required forms are attached, it must be approved by the appropriate department head or dean and then routed to the Purchasing Department for further handling, approval and signatures. If you believe there may be questionable provisions in the contract, be sure to call attention to them when sending the contract to Purchasing.

2. Signature Authority and Required Approvals

Finally, keep in mind that only those persons who have been delegated signature authority by the State Controller, the Board of Governors, and/or the State Attorney General are authorized to bind the University to contractual agreements. Never assume or represent to a contractor that a contract is approved until all required signatures have been obtained. Any person who is responsible for binding the University to paying or performing under an unapproved contract may be held personally liable for the obligations imposed by the contract--so it pays to be careful! Although your signature may be required on the contract as a part of the contract approval process, it will not have legally binding effect; all required approvals and signatures must be obtained before the contract can be considered "final."

Memorandums setting forth the delegations of authority to approve and sign contracts for the University are available on the Contracting Services web page under Signature Authority.