If a formal contract is required, it must be handled in accordance with the following process:
Contract Proposal – If a proposed contract is provided by a vendor or other party, or business details are inserted into a standard university contract form, the contract form should be submitted to the appropriate dean, director or department chair for initial approval. Please keep in mind the Basic Requirements for All Ball State University Contracts. Complying with the policies in advance will speed the contract review and approval process. Contract proposals that are approved by the department or college should be referred to the Finance Office, Contracts Office or the Purchasing Department as appropriate. Plan well in advance to have a contract reviewed and approved to ensure that the contract is in place before performance begins.
Contract Review and Approval – The contract should be routed to the Contracts Office, Purchasing Department or Office of Contracts and Grants depending on the type of contract. The contract can be submitted in hard copy or via email, although, if possible, it is preferred that the contract be submitted via email. These offices will ensure that sufficient review occurs as necessary. Contracts on a university-approved standard form and properly filled out generally are approved in less than a week. Contracts on a vendor-provided form or requiring negotiation may require additional time for review, processing and approval. The office may contact the department with questions, and the contract may take an extended period of time to negotiate, depending on the complexity of the contract, the extent to which the contract complies with the Basic Requirements for All Ball State University Contracts, and the difficulty of the negotiations. Once the contract is finally approved, it will be signed on behalf of the University by an authorized party and returned to the department. Usually, two or more identical originals will be returned to the department.
Obtaining Signatures from Other Party – After the contract is signed on behalf of the University and returned to the department, the department generally will need to obtain the signature of the other party or parties to the contract. The department should make one file copy of one contract and then send all of the originals to the other party with instructions to sign all of the agreements, keep one, and return the other originals to the department. It is important to try to make sure that the individual signing the agreement on the part of the other party is authorized to sign the agreement on behalf of that party. The individual who is authorized to sign on behalf of the other party varies based on the type of entity. Below is a brief summary of the types of other parties that may be encountered:
- Individuals or Sole Proprietorships - If the other party is an individual and has not formed a formal legal entity (usually ending in with "Inc.," "Corp.," "Corporation," "LLC" or "Ltd.," the other party generally is a sole proprietorship, and the contract needs to be signed by the individual who operates the business – called the "proprietor." Because the contract will be a public document, the social security number of the individual should not appear in the contract. Instead, a W-9 or other tax form should be obtained certifying the individual's social security number or taxpayer identification number.
- Partnerships - Only a general partner may sign for a partnership. Limited partners may not sign a contract to bind a partnership.
Registered Limited Partnerships - Only a general partner may sign for a registered limited partnership. Limited partners may not sign a contract to bind a registered limited partnership.
Limited Liability Companies (LLC) - Only a Manager or Member-Manager of the company may sign for a LLC. (Note that the term "manager" does not mean an employee of the LLC, but is the individual authorized to bind the business entity under the articles of organization or operating agreement of the LLC.)
Corporations - One or more corporate officers, such as the president, vice-president, or treasurer are usually the authorized signatories for a corporation. A person with some other title cannot be assumed to have authority to bind the corporation. Either a copy of the signed corporate resolution that provides for such authority or an attestation by the corporation's secretary must accompany the signature to evidence the signer's authority to bind the corporation.
Government Entities - Request information on the authority of the signatory when executing these contracts or agreements.
Power of Attorney - A legal document giving one person (called an "agent" or "attorney-in-fact") the power to act for another person (the principal). The agent can have broad legal authority or limited authority to make legal decisions about the principal's property and finances. A Power of Attorney must reviewed by the Contracts Office prior to acceptance as evidence of the person's authority to sign.