Contracting Authority
Faculty Briefing
College of Liberal Arts
August 15, 2011
Robert Rieder
Office of Counsel
[email protected]
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Contracting Authority
Question: Who can sign a contract on
behalf of the University?
Issue: One of authority
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Contracting Authority
• Scenario # 1:
Faculty member Don Davis (or Dean Davis) arranges
to have a colleague, Angela Hollis, from another
university provide a workshop at a future date for
interested students, faculty, and community
members. Hollis is to be paid an agreed-upon fee
plus expenses. When a contract from Hollis is sent
to Davis, he signs it for UAHuntsville. Does this
create any problems?
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Contracting Authority
• Background:
• The “University” is a public corporation
operating under the name of “The Board of
Trustees of the University of Alabama.” Section
16-47-1, Alabama Code
• UAHuntsville is one of the three constituent
divisions of this corporate body. This entity,
including also UA and UAB, is organized as the
University of Alabama System
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Contracting Authority
• Background (cont’d)
• Contracts entered into for the benefit of UAHuntsville
will typically identify and describe it, as a contracting
party, follows:
This contract is made and entered into by and between The Board
of Trustees of The University of Alabama, a public educational
and constitutional instrumentality of the State of Alabama,
incorporated by statute, for and on behalf of The University of
Alabama in Huntsville . . .
• Even when a shortened descriptive term is used (“by and
between The University of Alabama in Huntsville . . .”),
the real contracting party is the corporate “Board of
Trustees” entity
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Contracting Authority
• Background (cont’d)
• A corporate body can enter into contracts
only through individual “agents”
• These agents must be given contracting
authority by the governing body of the
corporation, either in a bylaw or a
resolution
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Contracting Authority
• The Rules of the Board of Trustees of the University
of Alabama deal specifically with the issue of how
contract authority is to be conferred:
The Board must designate by Resolution those university
officials who are authorized to enter into a contractual
relationship on behalf of this Board. These Resolutions should
specify that only those persons named in the most current
resolution for each campus can execute a contract or agreement
for their respective division of The University of Alabama
System.
Board Rule 406 (adopted -1995; amended -1997)
• This Rule clearly implies that all University contracts will be
in writing
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Contracting Authority
• The current Board of Trustees Resolution conferring contract
authority on UAHuntsville officials was adopted April 8, 2011
• For general contracting purposes:
Malcolm Portera, President
Ray Pinner, VP Fin/Admin
John Horack , VP Research
Vistasp Karbhari, Provost
John Severn, Assoc. Provos
• For research contracts and grants:
Thomas Koshut, Assoc. VP Research
Gloria Greene, Dir. Sponsored Programs
Felecia Troupe, Assoc. Dir. Sponsored Programs
• For student affairs-related contracts:
Vistasp Karbhari, Provost
John Severn, Assoc. Provost
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Contracting Authority
• For advancement/development contracts:
Ray Pinner, VP Fin/Admin.
• For contracts relating to the Diversity or Multicultural Affairs
Offices:
Delois Smith, VP Diversity
• For Continuing Education standard form instructor contracts:
Karen Mack Clanton, Dir. Cont. Educ.
• For equipment and software maintenance contracts:
Ray Pinner, VP Fin/Admin.
Robert Leonard, Controller /Interim Assoc. VP Business Services
• For housing and auxiliary services contracts:
John Maxon, Assoc. VP Univ. Housing/Bus. Operations
• For athletics grants-in-aid and letters of intent:
Antoine Bell, Interim Dir. Athletics
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Contracting Authority
• Anyone not named in the Resolution lacks actual
authority expressly granted to approve and sign a
contract on behalf of the University/Board
• The unambiguous language of the Board Rule and
Resolution defeats any possible claim either
• that a University administrator has contract authority by
virtue of his/her position, such as dean, director, etc.
(actual authority by implication), or
• that the University has in some other way created a
reasonable impression of authority (apparent authority) in
some other official
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Contracting Authority
• Authority by Ratification
• An agreement signed on behalf of organization XYZ by an
individual, A, who lacks contract authority, may
nevertheless become binding on XYZ if it accepts and
affirms A’s act after-the-fact
• Ratification of an unauthorized UAHuntsville contract is
unlikely to occur
• Results of a individual’s unauthorized execution of a
University contract:
• The individual is personally liable on the contract
• The individual has violated Board Rule and policy
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Contracting Authority
• Back to Scenario #1:
• Additional Facts:
• No University official with contract authority is willing to
ratify the contract
• Hollis , insisting that she has a valid contract, comes and
conducts the workshop as scheduled
• Result:
• Davis is personally liable for payment of Hollis’ fee and
expenses
• Davis is also subject to disciplinary action for violating Board
of Trustee policy
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Contracting Authority
• Scenario #2:
• Same facts as Scenario #1, except that Davis does initiate a
proper contract but does so “late,” perhaps just prior to Hollis’
scheduled workshop trip (and without sufficient advance time
to permit processing/approval of the contract) or after the
workshop has been completed
• The University official to whom the contract is submitted for
signature refuses to do so, either because the speaker/workshop is not acceptable or because the contract is submitted
after-the-fact
• If the services by Hollis are performed - result:
• Davis is personally liable for payment of Hollis’ fee/expenses
• Davis is subject to disciplinary action for violating Board policy
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Contracting Authority
• Scenario #3:
• Same facts as Scenario #1, except that Davis orally commits the
University to certain terms/conditions in his discussions with
Hollis, without indicating that a written contract approved by
University Counsel and by a University official authorized to
execute the contract will be required
• For any of a number of possible reasons, one or more of the
Davis-Hollis agreed to terms are not approved by the University
• Result:
• The contract for the workshop may fall through because Hollis is
unwilling to accept the University-approved terms, or
• The contract is approved by both parties, but the relationship with Hollis
is impaired due to “unfulfilled expectations” created by Davis’
unauthorized commitments
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Contracting Authority
• Summary
• Unless you are an official upon whom the Board of
Trustees has conferred the authority to execute
contracts on behalf of the University, do not sign
any University contract.
• Avoid submitting contracts for approval “late” or
after-the-fact.
• Do not purport, in your oral dealings with a third
party, to make commitments on behalf of the
University.
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