Contract Negotiation

Thomas E. Walsh, Ph.D. Director, Sponsored Research & Compliance, University of Florida

Research Administration Training Series

November 18, 2010

Contract Process

Coordinator assignscontract to Grants

Specialist

Contract reviewed byGrants Specialist

IP checklist sent to PI

ContractAcceptable

ContractModifications

Required

Contract to ProposalProcessingw/o DSR-1

(Complete Package)Logged w/Temp ID

Draft CDA, CTA,Teaming Agreement

logged in withTemp ID

Contract with DSR-1or DSR-1 on filelogged by UPN#

Negotiate terms andconditions with

sponsor

Have contract signedand returned to

sponsor

Receive IRB/IACUCapproval documentation

from PI

Receive fullyexecuted contract

from sponsor

MTA delivered toProposal Processing

Clerk sendsMTA to OTL withNotification to PI

Contract returned toPI for review &comments andDSR-1 if needed

Contract returned byPI with review &

comments and DSR-1if needed - UPN

assigned

Submit fully executedcontract to AwardsAdministration forAward Setup/NOA

For CTA needDSR-1 and

complete package

TYPES OF CONTRACTS

Research Agreements

Federal Contracts

Confidentiality

Material Transfer Agreements

Non-compete Agreements

Teaming Agreements

Licensing and other IP Agreements

Clinical Trials

Purchase Orders

Subcontracts

• Provides background and rationale.

• Identifies parties.

• Identifies consideration.

• Prefer two party agreements.

Standard Opening Paragraphs

Two “ Whereas” and one “Now, Therefore”

• The contract should be between the institution and the sponsor.

• PI should not sign on behalf of the institution.

• The institutional official should sign and bind and warrant that they have such authority

• UF CANNOT indemnify the other party

• Beware of hidden indemnification language such as

patent infringement.

• Indemnification language may appear in different

sections of a contract.

• Hold harmless language is similar to indemnification

language.

The “ I “ Word

• Offer “ boiler plate” language that allows you to assume liability for your own acts and omissions.

• Use state self-insurance language whenever possible or language that limits insurance to the extent your institution has coverage.

Alternative: Declare Responsibility

• Follow the laws of Florida – or be silent

• Do not accept other jurisdiction or venue.

• Jurisdiction

• Venue

Whose Law Applies ?

LOCATION, LOCATION, LOCATION

Jurisdiction means in what location (county, state, country) will the contract be subject to law. A court system may have jurisdiction (power) to take a case in a wide geographical area, but proper venue for the case may be one place within the area.

Venue means in what location will disputes or other legal matters be resolved. It is the local area where a case may be tried.

• Admission that breech causes irreparable harm.

• Granting injunctive relief means you agree to immediate injunction against you.

Injunctive Relief

CONFLICTS, DISPUTES AND TERMINATION

• Termination for convenience (at will).

•Breech of contract.

• Notification of breech

• Time to cure default

• Notice of termination.

CONFLICTS, DISPUTES AND TERMINATION

•Consider alternative dispute resolution

• Avoiding binding arbitration

• Keep all other remedies under law

available to either party

• Pre-existing and future IP.

• Background IP

• Foreground IP

• Confidentiality clauses.

Intellectual Property

• What is an option?

• Licenses (Exclusive/ Non-exclusive).

• Material Transfer Agreements.

• Intellectual Property Checklist.

Intellectual Property

• Protect academic freedom.

• Sponsor’s right to review, not approve.

Limited to:

• Patentable Material

• Proprietary Information

Publications

• Do not use the other part’s name without prior

approval of the other party.

• Right to access information:

• Legal or regulatory needs

Use of names

• Force Majeure

Acts of God and Nature

SPECIAL CONSIDERATIONS

Are there Federal flow down terms and conditions ?

• FAR Clauses

• Debarment, Lobbying, Audit for A133

• Subcontracting restrictions

Are there required State terms and conditions ?

• Payment conditional upon availability of funds

• Timeliness for payment

• Travel reimbursement regulations

• Limitations on insurance and indemnification