How Can Universities Protect Themselves from Problematic Contracts?

Universities often make a lot of contracts, just like other organizations. But it’s really important for them to make sure these contracts can be enforced and aren’t voidable. A voidable contract is one that one side can choose to ignore because of certain legal reasons. If universities end up in voidable contracts, they could face major money troubles and damage to their reputation. Here are some simple steps universities can take to avoid these issues:

1. Train Staff and Faculty

Universities should offer training to help staff and faculty learn about contracts and voidable contracts. A survey from the National Association of College and University Attorneys (NACUA) found that 68% of schools said their staff didn’t get enough training on contract law. By teaching people more about contracts, they can spot any tricky terms or problems.

2. Use Standard Contract Templates

Creating standard contract forms can help lower the chance of getting into voidable contracts. Having a template makes sure that universities can:

• Follow the Law: Legal experts should check templates to make sure they meet the law.
• Be Consistent: This helps avoid mistakes that could make contracts voidable.
• Speed Up Processes: Standard forms can make contract talks faster and easier.

3. Get Legal Advice Early

It’s important to involve legal experts when making contracts. The American Bar Association (ABA) says that 41% of businesses don’t have legal reviews, which can lead to problems. If universities get lawyers to look over contracts, they can:

• Spot Legal Problems: Experienced attorneys can find parts of the contract that might be voidable.
• Negotiate Better Terms: Lawyers can help get terms that protect the university and reduce risks.

4. Check the People Involved

Universities should check who they are signing contracts with. This means:

• Confirming Authority: Make sure the person signing has the right to do so.
• Looking at Financial Health: Knowing the other party’s finances can help avoid contracts with those who might not pay.

5. Watch for Unfair Terms

Sometimes contracts have terms that are overly unfair, known as unconscionable. Being aware of these terms is super important since they can make a contract voidable. Here’s what universities can do:

• Educate Everyone Involved: Teach people how to spot unfair clauses.
• Legal Review: Have contracts checked for terms that aren’t fair or go against public policy.

6. Use Contract Management Tools

Using contract management software can help keep track of contracts. These tools can assist universities by:

• Setting Reminders: Giving alerts for contract renewals or reviews.
• Keeping Records: Storing information that can help in the future with negotiations or problems.

7. Regular Checks on Contracts

Having a system to regularly review contracts can help universities find and fix problematic agreements. A study by the International Association for Contract & Commercial Management (IACCM) showed that organizations doing regular audits can cut legal disputes by up to 30%. Some key actions include:

• Checking Contract Performance: Making sure all parties do what they agreed to avoid issues.
• Reviewing Compliance: Regular checks for following legal standards help keep contracts enforceable.

In summary, by taking these steps, universities can greatly lower the chances of entering voidable contracts, protecting their money and reputation. Focusing on education, standardization, asking for legal help, and regular monitoring can help institutions understand contract law better.