Overview of Contracts 

A contract is a binding agreement between two parties in which each gives something in return for something else. For example, a job contract indicates an exchange of skills or services for a salary and benefits, and an apartment lease indicates an exchange of space and maintenance for the payment of rent. Student organizations regularly enter into contracts for such things as speakers or performers, apparel sales, car or bus rentals, facilities rentals, and catering services. A contract should be used any time there is a need for a clear understanding of responsibility, any time you are paying for a person's services or providing travel, lodging, meals, etc. for a performer/speaker, or any time any duties are being performed in exchange for payment. Please refer to the contracts section of the Student Organization Manual for general information about contracts for student organizations.

Most standard contracts should include the following sections:

• A description of the parties in the contract, the date of the contract and of the event, and a general overview of the goods or service being contracted.
• Background information about the business and purpose of each party.
• A statement of the contract duraction, clarifying how long the document will be valid.
• A list of definitions of words or expressions found in the remainder of the contract. For instance, it is important to define terms that have subtle differences in their meaning, such as "must" (absolute), "shall" (contingent upon), and "may" (permissive).
• A specific description of each party's obligations and responsibilities as a result of the contract.
• Any relevant operative provisions, such as applicable warranties or exclusions. Often, this section will appear as a disclaimer or other limiting language that may give one party advantage over the other.
• A list of enforcement provisions to cover any "what if" situations, such as a party failing to fulfill its obligations, dispute resolution plans, unforeseen circumstances affecting the terms of the contract, etc.
• A closing section that indicates the agreement of both parties to the terms of the contract.

Relationship with the University

Recognized student organizations are entitled to several rights and privileges, including the use of the university name, logo, and symbols. With this privilege comes the responsibility to ensure your conduct and decisions represent the university well. In the case of contracts, though, student organizations must clarify the definition of "representing" the university for the other party, to avoid misperceptions.

Student organizations are not employees or designated representatives of the university, and therefore cannot enter into a contract or other business dealing on behalf of the university as a whole. Therefore, you should include a section in your contract clearly explaining your party's direct or apparent authority only on behalf of the student organization. We recommend that this section appear with such language as:

"__________ (organization) is a recognized student organization of the university and does not represent the University. The organization cannot contractually obligate the university. As a __________ (member/officer) of __________ (organization), I enter into this contract/agreement on behalf of the organization in my role as __________ (president/treasurer/etc.)."

A statement similar to this one will clarify that the party signing the contract is doing so as a leader of the organization and not a formal representative of Texas A&M University. This will prevent miscommunications about the role of the university should a party fail in its obligations or should the contract be otherwise violated.

Contract Reviews

According to Texas A&M Student Rule 42.2, recognized student organizations must have their contracts reviewed by their advisor(s) prior to execution (signing) of the document. Should the contract pertain to an event or activity open to the general campus public, or should it involve events subject to copyright laws, the student organization must submit the contract for a formal review to the Department of Student Activities. Our department will route the contract through to the office of Contract Administration, and as the review process involves multiple departments, we request that you submit your original, unsigned document 4 to 6 weeks in advance of the event. It is imperative that you read your contract carefully and discuss it with the other members of your organization, your advisor, and (if necessary) the Department of Student Activities and/or legal counsel before you sign the contract.

The remaining section will address common issues or situations related to student organization contracts. Please contact the Risk Management team for further assistance.

Key Considerations for Contracts  

Written and Signed Contracts

The most important concept in contract law is having the agreement in writing and signed by all parties involved. Courts will generally treat a written contract signed by both parties as the final written expression of the parties. Verbal agreements and/or invoices are difficult to contest, so it is in the best interest of your organization to seek a contract outlining the responsibilities of the third party or vendor and your obligations for payment. 

Agreement on Contract Terms 

In the case of a contract dispute, courts will examine the original intent of both parties and the terms listed in the final, signed version of the contract. It is therefore important to ensure full recognition of and agreement about all the terms listed in the contract and any additional terms, such as an addendum. Be sure to maintain open communication with the other party as you review the contract and make any changes, and indicate any additional terms on the final document before signing it.

Validity of the Contract 

Contracts will likely not be valid if they involve any illegal activity or break the law themselves. For instance, your capacity to enter into a contract will be affected if you are under duress, intoxicated, or coerced in any way. Another factor to consider is the age of the signing party, as contracts signed by minors (under the age of eighteen) may not be enforceable.

A key component of contract validity is the authority of the signing party to contract on behalf of the organization. Therefore, you should clarify the role of the person signing the contract, indicating in writing that he/she has the permission and authority to act on behalf of the student organization. Make sure your members are familiar with your group's policy about entering into contracts for which the organization is responsible.

Fairness of the Contract

When a contract is so one-sided that one party holds heavy responsibility while the other guarantees nothing, courts may declare the document "unconscionable." For instance, one party may be sophisticated in writing contracts and include language that waives all liability on its part and requires the other party to pay the costs of any contract dispute. Look closely for such language as you review your contract, and seek assistance from the Risk Management team if you have any questions or concerns about the operative provisions listed in the document.

Contracts involving Sales 

Student organizations can be held liable for selling or distributing faulty products, so it is important to ensure that your vendor is reputable and reliable. Please refer to the Concessions page for more information about selling or distributing items on campus property, and please refer to the Liability page for more information about negligence.

If your organization can be shown to be "in the business of selling" a certain product, you may be held strictly liable should a product in defective condition place a customer in unreasonable danger. If your group regularly sells a particular item, it is especially important to ensure that the product is in safe condition. You should also ensure that the product meets its purpose and functions effectively. In fact, if you sell the product often and hold yourself as having specialized knowledge about the product, you may be considered a "merchant" (according to the Uniform Commercial Code) and therefore held responsible for the condition of the product. While most student organizations only occasionally sell items and therefore fall under the category of non-merchants, it is responsible to exercise common decency by checking the quality and safety of any items you sell or distribute on campus.