Common Errors in Contract Preparation
- Initialing of Changes. All changes, whether written, whited-out or added on a separate piece of paper, must be initialed by all parties.
- Terms. All terms must be clearly defined to avoid any confusion should a matter be brought before the Pennsylvania Board of Claims. For example, many contracts contain the term "travel expenses." However, absent a definition, this can include the more expensive, first class airfare, which the college never intended. If travel expenses include mileage, define the rate of compensation. There must be a "meeting of the minds" of each party as to the contractual terms.
- Unacceptable Terms. All terms not acceptable to the Commonwealth must be stricken and initialed. Please read the fine print of all contracts provided by outside contractors for our use. Common unacceptable language present in these documents includes alternative jurisdiction in cases of dispute, insurance provisions and indemnification provisions.
- Justification Clause. It is essential to complete this portion of an SPC. No SPC will be signed if this portion is left blank. It is important to indicate the necessity of the University’s need for the outside contractor (i.e., University personnel do not have the training or equipment to meet the need). It also adds clarity to modifications in cases where the work performed exceeded the original contract price (i.e., increase in volume not anticipated at the time of the original contract and does not result in an increase in per unit cost).
- Identification of Parties. Every SPC mandates that the parties to the contract indicate their titles next to their signatures.
- Fictitious Names. When an unincorporated party does business in a name other than its own, it is essential that the name of the individual appear doing business as (d/b/a) the fictitious name.
- Renewals/Modifications Post-Contract No contract may be modified or renewed after its termination date. Please set up an internal mechanism to monitor contract expiration dates. Once a contract is expired, if work continues at an increase in cost, such work is unauthorized and may not be paid.
- Referencing Attachments. Please clearly mark and identify additional provisions/riders. Also, reference the attachments, including number of pages, on the front of the SPC.
- Bidding Information. Bidding information must be included as part of the SPC contract and the blueback.
- Sole Source Contracts. Please provide clear and detailed statements within the newly-required certification form on why a contractor is a sole source contract.
- Striking Language. A broad X over inapplicable language may create questions as to what is excluded in a contract. Please draw lines through each and every inapplicable sentence and have ALL parties initial the change.
- Signatures. Contracts must be completely executed at the University level prior to forwarding to University Legal Counsel. When counsel signs the agreement, he/she is attesting to its legal accuracy. Hence, counsel must sign the document last.
- Term of Contract. No contract, including renewals, may exceed five years without the expressed approval of Chief Counsel.
- Mandatory Clauses. Please note whether the required provisions for recycled products and food donation is applicable in your contracts/SPCs. This is mandatory language.
- Marking Attachments. Insure that contract attachments are not misnumbered and/or mismarked.
- Contract Renewals. Please attach the original contract for every contract renewal.
- Numbering Contract Renewals. Renewal contracts must have the original SPC number with a suffix to indicate it is a renewal. Contracts should also be titled as "Amendments" or "Renewals."
- Unilateral Additions. At no time may a contract be modified without the explicit consent of both parties. Missing paperwork, which is subsequently added, should be approved by the contractor prior to resending the document to University Legal Counsel. Adding terms and conditions to a contract after it is signed, without conferring with all parties, is akin to a fraud.