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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
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