What is a contract?A contract is a legally binding agreement between two or more parties. An agreement must meet certain legal requirements to be a contract, with the main components being:
- The parties must be able to legally enter into contracts. As such they must be natural persons, corporations or other entities with the ability to enter into contracts (examples include governments and Indigenous bands)
- There must be an exchange of value. This is often an exchange of money for goods or services, however money does not have to be involved for a contract to be valid. As long as what is being exchanged has value a binding contract can be created. For example, mutual confidentiality agreements generally don’t involve money, however as each side values the promises to maintain confidentiality they can serve as the basis for a binding contract
- Certainty/specificity of obligations. In order to be a binding contract the obligations of each party must be outlined clearly enough that it can be determined objectively if each party has lived up to those obligations.
Is there a minimum monetary threshold for contracts?
A common question is whether low-value agreements are still ‘contracts’. The answer is yes. There is no minimum monetary threshold for a contract. As noted above, non-monetary promises can form the basis of a binding contract.
What university policy applies to the signing of contracts?
The signing of contracts on behalf of the university is governed by the Signing Authority Policy. That policy outlines that any contract entered into by the university must be signed by the delegates outlined in the policy. In the vast majority of cases two signatures are required. The policy has given the authority and responsibility for contract signing to only those positions listed in the policy.
I have an MOU that needs to be signed. Does it have to be signed according to the Signing Authority Policy?
The answer, unfortunately, is that it depends. Generally speaking an MOU (or Memorandum of Understanding) is intended to describe non-binding agreements between parties. These are often used to facilitate discussions between parties that will eventually result in a contract, but haven’t quite made it to that stage. For more information, please see MOUs.
Where can I go for help with contracts?
There are three different units on campus that can assist with contract review and signing:
ConnectionPoint/Enterprise Procurement: provides assistance with the purchase of goods or services. This includes tendering contracts, requests for proposals, and so forth In addition to assisting with contract review and signing.
Research Excellence and Innovation (REI): assists researchers with the review, negotiation and signing of research funding contract and grants. It also assists with the commercialization of discoveries through patent registration and negotiation of licensing agreement for intellectual property owned by the university
Legal Office (Manager of Contracts and Legal Services): other types of contracts not handled by either unit above. Typical contracts handled through the Legal Office include non-research funding agreements, student placement agreements, fee-for-service contracts, leases, etc.)