Types of Contracts

One of the biggest risks to the University in contract management is that an agreement could be entered, and obligations imposed on the University, that no-one knows about or follows up.  As a staff or faculty member engaging with people outside the University, you will probably have entered a “contract” if you have made any statements on behalf of the University, or purported to act with the authority of the University:

• Agreeing to anything that involves money changing hands or services being exchanged.
• Agreeing to do something in return for something else.
• Promising about something in the future.
• Arranging for someone else to do something for the University, in return for payment of some kind (monetary or otherwise).

The three main types of contracts that can arise in the University setting are:

1. Agreements where the University “gets paid” to do something or meet an obligation
   
   eg consultancies and contract research
        grants or sponsorships
        licensing or branding agreements
        twinning agreements
        secondments to external organisations
   
   “Getting paid” doesn’t necessarily mean that we receive money; being given something of value (such as equipment, branding rights, or the use of a space or building) is also “payment”.
2. Agreements where the University “pays” someone else to do something
   
   eg  employment contracts
         engagement of contractors and consultants
         obtaining goods and services
   
   Again, "payment" may not involve money but may involve some item of value, or may even also involve providing another service by way of exchange.
3. Agreements where there may be no payment involved, but obligations are still imposed on the University
   
   eg articulation agreements
        memoranda of understanding (MOU)
        mutual benefit arrangements
        student placement agreements
   
   These are some of the most reputationally critical agreements, but also the most difficult to spot, so they are often overlooked in terms of formalisation.  Regardless of the lack of payment or exchange, the University may be exposed to a liability or serious consequence (including damage to reputation) for breaching the obligations.

For more information about when and how a “contract” forms, refer to Module 1 of the Contract Management Handbook.