1. Contracting Authority
Faculty Briefing
College of Liberal Arts
August 15, 2011
Robert Rieder
Office of Counsel

2. Contracting Authority
Question: Who can sign a contract on behalf of the University? Issue: One of authority

3. 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?

4. Contracting Authority
Background:
The “University” is a public corporation operating under the name of “The Board of Trustees of the University of Alabama.” Section , 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

5. 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

6. 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

7. 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

8. 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 Vistasp Karbhari, Provost
Ray Pinner, VP Fin/Admin John Severn, Assoc. Provos
John Horack , VP Research
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

9. 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:
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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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.