AURIMS

1. AURIMS Contract Management February 2009

2. Universities enter into a variety of contracts, some implied and some express. Research Consultancy Students Employment Joint / Con-joint Appointments Contractors Funding Student Placement / Work Experience Joint Ventures Many others

3. Contracts as Risk Management (Risk Transfer)Tools Insurance Clauses Indemnity Clauses Hold Harmless Clauses Waivers No Liability Limitation of Liability Other Clauses Intellectual Property Force Majeure Liquidated Damages Responsibility And more….

4. Main Aspects of Contract Management Standard Contracts Non-standard Contracts to be individually vetted by qualified staff prior to commencement of the activity concerned Consideration of respective bargaining positions Policy on acceptability Procedures to manage risks (liaison with Risk Management Dept): Identify exposures from the activity Assess exposures from the activity Transfer exposures and implement procedures to manage remaining exposures Clear Contract Signing Authority

5. Standard Contracts Set of standard contracts to cover various activities Include desired provisions to transfer or limit risks to protect the entity: Indemnity clauses Hold harmless / waivers / limitation of liability clauses Insurance Clauses Intellectual Property rights Others depending on the nature of the contract Wording to match intent Clarity Use standard contracts wherever possible

6. Vetting of each non-standard contract Ensure clarity (of each clause and scope) Wording to match intent Look out for hidden dangers Identify onerous provisions Consider bargaining position Liaise with Risk Management Dept to enable: Identification of exposures Assessment of exposures Transfer of exposures and implement procedures to manage remaining exposures Always remember insurance may never cover all exposures

7. Policy on Acceptability Have a policy on acceptability of onerous clauses / exposures Consider (in conjunction with Risk Management Dept) the effect of such clauses for the specific contract concerned Clear procedures when considering accepting clauses / exposures outside of the acceptability criteria Implement specific procedures to manage the additional exposures resulting from acceptance

8. Clear Contract Signing Procedures Authority & Clear written contract signing authority and procedures Suggest different authority may be considered for standard Vs non-standard contracts Suggest $ amount should not be the only determining factor Other considerations may include: Type of activity Risk Analysis for the activity Compliance or Non-compliance with Policy on acceptability Benefits Vs Risks

9. Intellectual property rights clause Limitation of liability clause to limit University’s liability to: a set multiple of the fee (e.g. 3 times the fee charged); re-performing the work / service; or the cost of some other party to perform / re-perform the work / service Instructions that each contract must have a clear scope of work / service to be provided (mostly in the schedule) to avoid potential disputes Some Suggestions for Standard Consulting / Research contracts (where University is the service provider)

10. Some Suggestions when reviewing Non-standard Consulting / Research contracts (where University is the service provider) Indemnity (in favour of the other party) should be limited to University or employee negligence Watch out for indemnity clauses reversing the onus of proof Watch out for clauses agreeing to hold the other party harmless or waive your recovery rights Watch out for insurance clauses requiring you to arrange insurance including the other party (unless they are limited to their loss due to your negligence) Intellectual property rights clause ensure clear scope of work/ service to be provided (no broader than what is actually intended to be provided)

11. Reversing the onus/burden of proof Acceptable indemnity clauses would normally require the “indemnitee” to establish that the “indemnifying party” has caused the loss or liability. Example University will indemnify ABC for any losses suffered or liability incurred by ABC arising out of any negligent act, error or omission of the University, its staff and/or students. Not much different from Common Law position.

12. To enable user (academic) friendly Suggestion for minor consultancy work Process for minor consultancies, you could consider drafting a standard quotation letter/fax template including: limitation of liability / waiver clause (in your favour) Intellectual property rights clause (in your favour) other necessary clauses (in your view) clear scope of work / service to be provided (no broader than what is intended by you) clauses to give legal effect to the content if and when the quotation is accepted by the other party

13. Joint / Con-joint Appointment Agreements (e.g. with Dept of Health) Have clear outlines of what is University activity and what is Dept of Health activity If at all possible, limit University activity to teaching and supervising University students only If indemnity clauses are present, try and ensure both ways

14. Student Clinical Placement Agreements Any indemnity in favour of the hospital should be limited to their liability arising out of your student’s negligence Insurance clause (imposed on you) should be only to cover University and student If insurance clause requires cover to include hospital, ensure this is limited to their liability arising out of student’s negligence and not their own wrong- doing Clearly outline who (University or hospital) is responsible for supervising students, especially in a clinical situation, making sure that it is in line with the intention for that specific placement

15. Facilities Hire Agreements Insurance Clause requiring the hirer to effect relevant insurances, particularly Public Liability insurance (if that is the intention for the hirer concerned) Request evidence of the currency of the relevant insurances Indemnity Clause requiring the hirer to indemnify University and its employees, students, etc. for losses suffered by or liability incurred by indemnitees Hold harmless clause or limitation of liability clause in favour of University Clear scope of use (for the specific hire concerned)

16. Contractors’ (providing services to you) Agreements Insurance Clause requiring the contractor to effect relevant insurances, particularly Public Liability insurance, Workers Compensation, etc. (if that is the intention for the contract concerned). Also consider which parties should be insured. Request evidence of the currency of the relevant insurances Indemnity Clause requiring the contractor to indemnify University and its employees, students, etc. for losses suffered by or liability incurred by indemnitees Hold harmless clause or limitation of liability clause in favour of University Clear scope of services to be provided (for the specific contract concerned)

17. Clauses to watch out for Indemnity clauses that reverse the “burden of proof”, i.e. from the other party having to establish wrong-doing on your part (to trigger indemnity to them) Vs you having to establish wrong-doing on their part to avoid having to indemnify them Insurance clauses that require you to effect insurance including the other party other than for their liability arising out of your wrong-doing “Responsibility” or similar clauses outlining the various responsibilities attaching to you. Ensure they reflect the intended situation Other clauses which try to imply a responsibility on you which is not the intention

18. Consultancy to watch out for Strongly advise against reviewing the work of someone else’s professional work/consultancy, especially if the request is from the party who has done the original work If, for some reason, decision is to provide the review, strongly recommend a combination of: - hold harmless/waiver from the requesting party (for any losses suffered or liability incurred by them) - indemnity from the requesting party (for losses or liability suffered by other parties) - ensuring the party has adequate insurance to satisfy the indemnity