A contract is any legally enforceable agreement, whether or not it's called a contract. Contracts are between two or more parties, create rights and duties for each party, and usually require signatures of one or both parties. A well-written contract will:

• ✓ State in clear terms what each party must do
• ✓ Create a process to make decisions
• ✓ Provide a mechanism to resolve disputes that arise

Some contracts may not require VCU to issue payment; for example:

• › Revenue generating contracts
• › Non-Disclosure Agreements (NDAs)
• › Memoranda of Understanding (MOUs)

Any time a vendor asks you to sign a document OR

• ✓ Any time a vendor gives you a purchase contract.

TIP: Contracts must be reviewed, prior to:

• ✓ The start of any work,
• ✓ The issuance of purchase orders,
• ✓ P-Card transactions, or
• ✓ The approval/issuance of invoice payments.

Contracts include terms and conditions (T&Cs). The Contracts Team is responsible for reading contract documents to make sure the T&Cs accurately reflect what you are buying, as well as certain legal requirements. VCU is a public university, which means there are certain legal requirements our contracts must meet by state law to be effective.

Common terms negotiated by the Contracts Team include:

• › The basics: who are the parties, what is being purchased, what is the cost
• › Term, termination, and renewals
• › Representations and warranties
• › Allocation of risk
• › Insurance
• › Governing law
• › Confidentiality

All of these terms are reviewed, redlined, and negotiated by Procurement. We may identify certain risks that should be considered by the department prior to executing the contract. In addition, there are many university policies established by other departments that identify various university requirements that must be met prior to executing purchase contracts. It is helpful when departments consider these requirements prior to submitting a contract for review.

The review period varies based on the following:

• ✓ The complexity of the contract
• ✓ Whether the contract is written from scratch or negotiated from the vendor's form contract
• ✓ The vendor's willingness to negotiate
• ✓ The review and input required from other university departments

Ideally, vendors understand the legal requirements VCU must meet based on our status as a state agency. However, not all vendors are willing to negotiate with VCU, which may cause significant delays or at times, make the purchase impossible.

On average, vendor contracts can be reviewed and executed within 2 weeks. However, some contracts may take a month or longer.

University policy dictates that purchase contracts may only be executed by the Director of Procurement Services or the Chief Financial Officer, or their designee. The Purchasing and Contracts Teams coordinate the execution of all contracts, including obtaining the signature of the vendor.

Authority to sign purchase contracts 

By university policy, only certain individuals on campus are permitted to sign purchase contracts. See Delegation of Signatory Authority.

Contract repository 

The fully executed contract will be returned to the department, or you will receive a notification from RealSource letting you know the contract is available in the repository. The Contracts Team or Purchasing Team will add your contract to the Contracts+ repository where it can be accessed by any RealSource user at any time. For more information about the Contracts+ repository, see the RealSource User Help-Guide.

After the contract is executed, it is the department's responsibility to monitor the vendor's performance to ensure compliance with the contract as it is written. More information about Contract Administration can be found at Contract Management.