Legal Review of Contracts Procedures

Purpose

The purpose of these Procedures is to provide awareness, consistency and direction to Contract Authorities in determining when Legal Review is necessary for University Contracts.

Definitions

For the purposes of this Policy the following definitions apply:

“Contract” means any document, or other evidence, of an intention to establish a binding legal relationship between the University and one or more third parties.

“Contract Authority” (“CA”) means the means the individual(s) with direct or delegated authority to approve a Contract in accordance with the Signing Authority Registry and Approval Procedure.

“Contract Implementer” (“CI”) means the individual or department that initiates a Contract, receives a good, service, or other benefit, pursuant to the Contract, and/or is responsible for meeting obligations under the Contract.  A Contract may have multiple CIs.

“Contract Management” describes the set of activities required to properly manage contractual commitments to and from third parties and includes the management of pre-Contract diligence, negotiation, and implementation activities.

“Legal Review” means a review of a draft Contract by the University General Counsel, or delegate, to ensure that: 

• The Contract Implementer is made aware of the risks and obligations associated with a Contract prior to signing;
• The terms of the Contract will not subject the University to an unacceptable level of liability or risk; and
• The Contract does not contain unacceptable legal commitments.

 “Sponsor” means the provider of funds for research activities, including both external and internal sources.

Scope and authority

These Procedures apply to all Contracts to which the University is a party or under which the University assumes legal obligations.

The General Counsel, or successor thereof, is the Policy Owner and is responsible for overseeing the implementation, administration and interpretation of these Procedures.  

Procedures

Prior to a Contract being approved and executed, the Contract Authority will determine if a Legal Review is needed in accordance with the Contract Management Policy and these Procedures.

Determining if Legal Review is required

The Contract Authority is responsible for determining whether Legal Review is required, discretionary or excepted under these Procedures.

1. Required Legal Review:  The Contract Authority will obtain a Legal Review  where the terms of a Contract present risk in one or more of the following ways:

   1. Financial where the total value (cash and in kind consideration) of the Contract is in excess of $500,000.
   2. Reputation where a potential Contract :
      • Involves the transfer, storage or use of personal information;
      • Raises questions of significant legal or regulatory compliance. 
   3. Assumption of liability or indemnity by the University where:
      • The University is agreeing to take on liability greater than $500,000; and/or
      • Agrees to indemnify another party the costs of which may exceed $500,000;
   4. Contract length exceeds five years and/or requires automatic renewal;

   5. Risk to property and person where the Contract contains significant risk factors and/or potential for injury to individuals or property.

2. Discretionary Legal Review: In the following circumstances, the Contract Authority may determine whether or not a Legal Review is required, based on his or her assessment of the nature and extent of the risk presented:

   1. Financial where the total value (cash and in kind consideration) of the Contract is less than $500,000.
   2. Reputation where a potential Contract may :
      • Not align with the goals and values of the University;
      • Bring the activities or decisions of the University under public scrutiny;
      • Have an impact on any of the University’s strategic relationships;
      • Involve matters considered controversial;
   3. Assumption of liability or indemnity by the University where:
      • The University is agreeing to take on liability less than $500,000; and/or
      • Agrees to indemnify another party the costs of which will not exceed $500,000;

   4. Intellectual Property (IP) where the University is considering transferring, sharing or acquiring IP or obligations related to IP.

3. Exceptions to Legal Review: The Contract Authority may presume that aLegal Review will not be required where:

   1. A Contract that has previously undergone Legal Review is being renewed, provided it is not being modified in any substantive way.
   2. A Contract is developed from a pre-approved, University template that has not been modified in any substantive way.
   3. The General Counsel, or delegate, waives the requirement for Legal Review.

   4. The Contract value (cash and in kind consideration) is nominal.

4. Where there is any specific concern regarding the provisions of a Contract, the Contract Authority may request a Legal Review, even if one is not required under these Procedures.
5. Exemption from Legal Review will not exempt a Contract from the requirement to comply with University Policies and Procedures, legislation, and applicable Sponsor Terms and conditions.  

Requesting a Legal Review

1. Where the Contract Authority determines that a Legal Review is required in accordance with these Procedures, he or she will submit the draft Contract to the Office of the General Counsel through legal@ontariotechu.ca.
2. Contract Authorities are encouraged to consult with the Office of the General Counsel as early as possible in the Contract Management process.  Requests for Legal Review should normally be submitted at least 15 working days in advance.

3. When submitting a draft Contract for Legal Review, the Contract Authority should provide the following information:

   1. Outline of the objectives and/or requirements giving rise to the Contract;
   2. Summary of the perceived risks and/or concerns;
   3. Supporting documents, as applicable; and

   4. Timeframe in which input is required.

4. Upon reviewing the draft Contract, the General Counsel, or delegate, has the authority to determine if the assistance of outside legal counsel is required. 

Outcome of a Legal Review

1. When the Legal Review is complete, the General Counsel, or delegate, will inform the Contract Authority of any issues that, in his or her opinion:

   1. Should be addressed or negotiated by the Contract Authority prior to the Contract being approved; or
   2. Present a substantial risk to the University that cannot be mitigated through revision or negotiation of the Contract and which will require additional approval.

Monitoring and review

These Procedures will be reviewed as necessary and at least every three years.  The Policy Analyst and Compliance Officer, or successor thereof, is responsible to monitor and review these Procedures.

Relevant legislation

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Related policies, procedures & documents

Contract Management Policy

Signing Authority Policy

Signing Authority Registry and Approval Procedure

Policy on the Internal Use of Research Funds

Procurement Policy

Procurement Procedures

Expenses Policy and Procedures