ABC Contract Clauses
The following information is presented as samples of typical (non-construction) contract wording, and should not be construed or used as legal advice. Check with your counsel on all contracts.
These are typical clauses you will find in contracts. The clauses below are ones that are approved for use in our college contracts. "★" indicates that this or a similar clause must be in every contract.
General Contract Structure
This Agreement is made between the (formal name of Institution, i.e., Trustees of Smith College) acting through the Office of __________ hereinafter "Institution" and __________ duly incorporated under the laws of the Commonwealth of Massachusetts with its principal place of business at (street address, city, state, zip), hereinafter "Company".
Whereas the parties agree they want to do business together in order to foster cooperation and collaboration on ---
Whereas Company represents that it has the skills and personnel required by Instution to accomplish ---
General Terms in Alphabetical Order
Neither party shall have the right to assign this Agreement without the prior written consent of the other party.
★ Choice of Laws / Jurisdiction
The laws of the Commonwealth of Massachusetts shall govern the validity, construction and effect of this Agreement. All lawsuits arising out of this agreement, wherever derived, shall be resolved in Hampshire County in the Commonwealth of Massachusetts.
(See also - Confidentiality Riders at the end of this document)
Consultant agrees to keep confidential and not to disclose to third parties any information provided by College pursuant to or learned by Consultant during the course of this Agreement unless Consultant has received the prior written consent of College to make such disclosure. This provision shall survive expiration and termination of this Agreement. This obligation of confidentiality does not extend to any information that: 1) Was in the possession of Consultant at the time of disclosure by College, directly or indirectly; 2) Is or shall become, through no fault of Consultant, available to the general public; or 3) Is independently developed and hereafter supplied to Consultant by a third party without restriction or disclosure.
The Consultant warrants that all of its operations are compliant with all federal and state laws, rules and regulations pertaining to privacy and/or security of personal date.
Vendor/Consultant is not permitted to share and agrees that it will not share any "confidential data" with any other College vendor without first disclosing to the College in writing all data fields and all records to be provided, and receiving written authorization to provide the data.
This agreement and any Addenda, Statements of Work, or other attachments to this Agreement may be executed in two or more counterparts, all of which constitute one and the same instrument. This Agreement may be executed by facsimile or electronic signature.
Electronic and Information Technology (EIT)
The [vendor/bidder] warrants that the products or services provided are fully compliant with the accessibility standards of WCAG 2.0 Level AA for web-based technology and Section 508 of the Rehabilitation Act and the Americans with Disabilities Act for other EITs and any applicable current federal and state disability laws.
[Comment: The clause above must be included in all contracts involved in the purchase or procurement of electronic and information technology (EIT). EIT includes information technology and any equipment or interconnected system or subsystem of equipment that is used in the creation, conversion, or duplication of data or information. The term electronic and information technology includes, but is not limited to, the internet and intranet websites, content delivered in digital form, electronic books and electronic book reading systems, search engines and databases, learning management systems, classroom technology and multimedia, personal response systems ("clickers"), and office equipment such as classroom podiums, copiers and fax machines. It also includes any equipment or interconnected system or subsystem of equipment that is used in the automatic acquisition, creation, storage, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information. This term includes telecommunications products (such as telephones), information kiosks, Automated Teller Machines (ATMs) transaction machines, computers, ancillary equipment, software, firmware and similar procedures, services (including support services), and related resources, information kiosks, Automated Teller Machines (ATMs) transaction machines, computers, ancillary equipment, software, firmware and similar procedures, services (including support services), and related resources.]
Emergency Notification System
(See Comments below)
This agreement provides the opportunity for Consultant to opt in to the College Emergency Notification System. If opting in, the consultant staff based at College through this agreement and an administrator identified by Consultant will be added to the College Emergency Notification System. Consultant staff members who are listed in the notification system are required to carry an activated cell phone. Consultant will bear the responsibility for compiling the names and contact information of onsite staff for the period of time specified by the College, providing the information to the College Emergency Notification System coordinator, and updating the information as necessary throughout each designated time period.
[Comments: Sample - This clause should be used only for those contractors who have staff on campus full time for a significant period. Before offering this to any contractor, you must check with the Emergency Notification Manager to make sure that we have the technical capability to include the contractor in our notification process.]
★ Entire Agreement
This Agreement constitutes the entire agreement and there are no oral or other representations regarding the subject of this Agreement that are binding on either party. All changes to this Agreement must by in writing, signed by both parties. It is understood and agreed that e-mail correspondence shall not constitute “a writing” to this agreement unless expressly included herein.
Equal Opportunity Clause
In the event that either party is unable to perform its obligations under this Agreement as a result of a force majeure, neither party shall be liable to the other for direct or consequential damages resulting from lack of performance. “Force Majeure” shall mean fire, earthquake, flood, act of God, strikes, work stoppages, or other labor disturbances, riots or civil commotions, litigation, war or other act of any foreign nation, power of government, or governmental agency or authority, or any other cause like or unlike any cause above mentioned which is beyond the control of either party.
Alternative Force Majeure Clause for Events
Force Majeure: In the event that either party is unable to perform its obligations under this agreement as a result of a force majeure, neither party shall be liable to the other for direct or consequential damages resulting from lack of performance. “Force Majeure” shall mean fire, earthquake, flood, act of God, strikes, work stoppages, or other labor disturbances, riots or civil commotions, litigation, war or other act of any foreign nation, power of government, or governmental agency or authority, or other emergencies including the closing of the college, which make it inadvisable or impossible to hold the contracted terms of this agreement. It is understood that this agreement may only be terminated by one or more of these reasons by written notice from one party to the other, and is at the sole discretion of the College for its approval or denial. The parties agree to provide written notice as soon as possible.
Inclement weather: Inclement weather shall not be considered a force majeure occurrence unless the college is closed as a result of said weather. In the event of the threat of inclement weather, the Sponsor will be required to submit in writing a request to postpone the event no later than seven (7) business days prior to the event. Upon approval by the College, a mutually acceptable date will be determined to reschedule the event. Additional fees may apply if the new date is outside of the same rate-season as the original date.
Harassment of any kind will not be tolerated on this project or on the College campus. Contractors and their employees are expected to comply with the College policy prohibiting harassment and intimidation:
"The college prohibits sexual or any other kind of harassment or intimidation, whether committed by or against a student, faculty member, supervisor, co-worker, vendor or visitor. Harassment has no place in our community, whether based on a person’s race, sex, color, creed, religion, national/ethnic origin, age, handicap, sexual orientation or disabled veteran/Vietnam-era veteran status."
Contractors and their employees shall also comply with the College's Sexual Harassment policy which prohibits sexual harassment. A copy of the policy is available from Facilities Management [Comment: Name appropriate for your school] or on the web at: [Comment: Set link for your school]
Inappropriate actions or noises either on the construction site or in the surrounding area may be viewed as harassing behavior. Contractors shall instruct their employees to limit their contact with college personnel staff or students to professionally necessary interactions. Any occurrence of harassment will be cause for immediate termination and possibly removal of subcontractor from the site. The Contractor will strictly enforce these anti-harassment policies.
[Comment: This paragraph is directed specifically to construction workers, and should be deleted from non-construction contracts or modified for on-site work such as window-washing.]
★ Indemnification / Release / Hold Harmless
(Other party is indemnifying Instution)
To the fullest extent permitted by Law, the (named party) will defend, indemnify and hold harmless [Institution], including its current and former trustees, officers, directors, employees, volunteer workers, agents, assigns and students from and against claims, damages, losses and expenses, including but not limited to attorney's fees, arising out of, or from the performance of its operations or services and for the acts or omissions of its directors, officers, employees, contractors or subcontractors, volunteers, participants, guests or any third party for whom it is responsible, regardless of whether or not such claim, damage, loss or expense is caused in part by a party indemnified hereunder. Such obligation shall not be construed to negate, abridge or reduce other rights or obligations of indemnity that would otherwise exist in the absence of this agreement.
Alternate Clause: Indemnity against Copyright, Patent or Trademark Claims
Vendor agrees to indemnify Customer against all liability and expense, including attorneys’ fees, arising from or in connection with any third party claim, action or proceeding instituted against Customer based upon any infringement or misappropriation by the Software or Work Products of any patent, registered copyright or registered trademark of a third party that is enforceable in the United States, provided that Vendor: (1) is notified immediately after Customer receives notice of such claim; (2) is solely in charge of the defense of and any settlement negotiations with respect to such claim; (3) receives Customer’s reasonable cooperation in the defense or settlement of such claim; and (4) has the right, upon either the occurrence of or the likelihood (in the opinion of Vendor) of the occurrence of a finding of infringement or misappropriation, either to procure for Customer the right to continue use of the Software or Work Products, or to replace the relevant portions of the Software or Work Products with other equivalent, non-infringing portions. This indemnification shall not be subject to any limitation of liability that may be provided for elsewhere in this Agreement.
★ Insurance (Alternative 1, used for low risk; only GL needed)
Throughout the term of this Agreement, Other Party will maintain in force Comprehensive General Liability including Product Liability insurance, with minimum limits of $1,000,000. Other Party must provide proof of insurance through the issuance of a certificate of insurance showing the above coverages and limits specified. If the Other Party carries higher limits (including Excess Liability Coverage), such limits must be shown on the certificate. The Institution has the right to demand a certified copy of any insurance policy. Current Certificates must be filed with the Institution before Other Party is permitted on campus.
In addition, Other Party is required to add the Institution to its General Liability insurance policies with the following wording “[Full name of Institution], including its current and former trustees, officers, directors, employees, volunteers, students, agents, and assigns, is added to this policy as additional insured.”
This insurance requirement shall not be construed as limiting in any way the extent to which Other Party may be held responsible for the payment of damages to any persons resulting from its operations or the activities of any person or persons for whom it is liable.
Insurance (Alternative 2)
Other Party shall at its own expense obtain and maintain:
- Comprehensive general liability insurance, covering bodily injury in the sum of not less than one-million dollars ($1,000,000) per occurrence and $3,000,000 aggregate;
- Workers’ compensation insurance in accordance with the laws of the Commonwealth of Massachusetts, statutory limits; and Employers Liability with limits of $1,000,000.
- Comprehensive automobile liability insurance, including the operation of owned, non-owned, and hired automobiles, covering bodily injury in the sum of not less than one-million dollars ($1,000,000) combined single limit;
- If required, Excess Liability in the amount of $____________.
- If available generally to members of Other Party's profession, professional liability (errors and omissions) insurance on a claims-made basis with limits of liability of not less than one million dollars ($1,000,000).
- All insurance required hereunder shall be maintained in full force and effect in a company or companies reasonably satisfactory to the Institution (A-VIII or better) and shall be maintained at Other Party’s expense.
General Liability, Employers’ Liability and Excess Liability insurance required hereunder shall name “The [formal name of the Institution], its agents, its employees, and its assigns” as additional insureds.
Certificates of insurance shall be supplied contemporaneously with the execution and delivery of a final contract and with the renewal of any insurance contracts during the term of this Agreement. Said certificates shall evidence compliance with all provisions of this section. If the Other Party carries higher limits (including Excess Liability Coverage), such limits must be shown on the certificate. The Certificate shall contain a clause requiring written notice to the Institution thirty (30) days in advance of the cancellation, non-renewal, or material modification of said insurance as evidenced by return receipt of United States certified mail. If the conveyance of additional insured status is provided only through an endorsement to the insured’s policy, the [other party] shall be responsible for providing a copy of the endorsement with the certificate.
This insurance requirement shall not be construed as limiting in any way the extent to which Other Party may be held responsible for the payment of damages to any persons resulting from its operations or the activities of any person or persons for whom it is liable.
Mediation / Choice of Laws / Jurisdiction
The parties agree that any disputes that may arise as a result of this Agreement or the provision of products or services as a result of this Agreement will first be attempted to be resolved through discussion between the parties. If the dispute cannot be resolved on terms satisfactory to both parties, the parties shall in good faith enter into mediation to resolve the dispute. Upon failure to mediate any such disputes in good faith, the parties may resolve the dispute through any other legal means available, including arbitration or litigation without requirement of a specific legal forum. The laws of the Commonwealth of Massachusetts shall govern the validity, construction and effect of this Agreement. All mediations, arbitrations or lawsuits arising out of this agreement, wherever derived, shall be resolved in Hampshire County in the Commonwealth of Massachusetts.
★ Names and Trademarks
No party to this Agreement shall, without express written consent in each case, use any name, trade name, trademark, or other designation of any other party hereto (including contraction, abbreviation or simulation) in advertising, publicity, promotional, or any other activities or context.
The failure or delay of either party to exercise any of its rights under this Agreement for a breach thereof shall not be deemed to be a wavier of such rights, and no waiver by either party, whether written or oral, express or implied, of any rights under or arising from this Agreement shall be binding on any subsequent occasion; and no concession by either party shall be treated as an implied modification of the Agreement unless specifically agreed in writing.
Any notice under this Agreement shall be in writing and be delivered in person or by public or private courier service (including U.S. Postal Service Express Mail) or certified mail with return receipt requested or by facsimile. All notices shall be addressed to the parties at the following addresses or at such other addresses as the parties may from time to time direct in writing:
Institution: (Name the person who signed the contract OR the person who will administer and manage the contract)
Name of person who signed the contract OR person who will administer/manage the contact
Name of Department/Office
Northampton, MA 01063
the Other Party:
City, State, Zip Code
Any notice shall be deemed to have been given on the earlier of: (a) actual delivery or refusal to accept delivery, (b) the date of mailing by certified mail, or (c) the day facsimile delivery is verified. Actual notice, however and from whomever received, shall always be effective.
★ Relationship of the Parties
It is agreed that Other Party, its agents and/or employees are solely responsible for their own actions and have no relationship to Institution as partners, joint venturers, employees or agents.
The terms of this Agreement are severable such that if any term or provision is declared by a court of competent jurisdiction to be illegal, void, or unenforceable, the remainder of the provisions shall continue to be valid and enforceable.
★ Signature Authority
The individual signing below hereby represents and warrants that s/he is duly authorized to execute and deliver this Agreement on behalf of Other Party and that this Agreement is binding upon Other Party in accordance with its terms.
Signed by authorized signatory:
[Formal name of the Institution] Other Party
By _________________ By _________________
Date ______________ Date _______________
It is understood and agreed by both parties that [other party], as a political subdivision of the Commonwealth of Massachusetts, is a self-insured entity for purposes of addressing all property loss or damage, or personal injury, arising or resulting from any negligent act or omission of [other party] personnel during the performance of this Agreement. Further, no Board of Trustees, or agents thereof, of any [other party] of this Commonwealth, has the authority, statutory or otherwise, to enter into an indemnification or hold harmless agreement on behalf of a [other party] of this Commonwealth. Further, pursuant to amended Article 62 of the Massachusetts Constitution, and applicable Massachusetts case law, the Commonwealth (other party) is prohibited from indemnifying or holding harmless, in any manner, an individual, or any private associate, or any corporation which is privately owned and managed. Where the party to a contract with the Commonwealth is not an individual, private associate, or a corporation which is privately owned and managed, the Commonwealth (other party) can indemnify or hold harmless such party only upon a two-thirds vote of each House of the Massachusetts Legislature.
In the event of the repeal of amended Article 62 AND the enactment of a statutory authority authorizing a Board of Trustees, or agents thereof, of a [other party] of this Commonwealth, to enter into an indemnification or hold harmless agreement on behalf of a [other party] of this Commonwealth, the parties agree to the terms of the Indemnification clause contained herein to the extent that these terms are consistent with such statutory authority.
[Comment: This clause should accurately reflect what the parties mutually agree to, and wording can vary significantly depending on the nature of the contract. For example, an event contract will have a different agreement than a consulting agreement. It is generally poor practice to have an open-ended contract, particularly one that requires payment from the College for services. Contracts should all have a start date and and end date. Contracts may renew for specific periods, but beware of contracts that renew automatically unless they have an open cancellation clause (e.g., "The College has the right to cancel this agreement at any time for any reason or no reason." You may want to have "termination for cause" wording in the agreement, such that if work product is not delivered, or deposits not made, the agreement can be canceled with __ days written notice to the other party. There may be contracts that you do not want to give the other party the opportunity to cancel, particularly for hard-to-find services or products that greatly fluctuate in price (i.e., the purpose of the agreement is to lock in pricing). As you think about this clause, picture worst case scenarios, and what flexibility you would like to have in dealing with them. Following are some sample cancellation clauses from actual contracts.]
Sample 1 (basic): This contract is effective on [date] and will terminate on [date]. The College reserves the right to terminate this agreement at any time with __ days notice for any reason or no reason.
Sample 2 (service agreement):
This Agreement will commence on its Effective Date (specified above) and will remain in effect until terminated as provided herein or until xx/xx/20xx.
Either party may terminate this Agreement for convenience (that is, without cause and for any reason or for no reason) upon thirty (30) days’ prior written notice, however, unless the Agreement is terminated for breach (as provided below), this Agreement will remain in effect until each party completes its obligations under any Statement of Work then in effect.
In addition, this Agreement may be terminated by either party:
If one party commits a material breach of any provision of this Agreement (the breaching party) and such party fails to cure the same within twenty (20) days after receiving written notice specifying such breach. If such breach cannot reasonably be cured within 20 days, the breaching party may request a longer period of time as may be reasonably necessary to effect such cure by furnishing to the non-breaching party within such 20 day period a feasible plan demonstrating that it is capable of curing the breach and diligently proceeds to implement such plan to completion. Such extension is permitted solely at the express agreement of the non-breaching party.
In the event the other party (a) becomes insolvent, is dissolved or liquidated; (b) files or has filed against it a petition in bankruptcy and, in the case of an involuntary petition, such petition is not dismissed within 30 days; (c) makes a general assignment for the benefit of its creditors; or (d) ceases conducting business in the ordinary course.
Upon any termination of this Agreement, Consultant:
Will cooperate with Client in effecting an orderly transition; and
Shall be paid (and if applicable shall be entitled to recover payment) for all Services rendered through the date of termination (including for work-in-progress), for those costs reasonably incurred in anticipation of performance of the Services to the extent they cannot reasonably be eliminated, for any other termination costs Consultant incurs in connection with canceling any secondary contracts it undertook in anticipation of performance of the Services, and for any other actual damages suffered by Consultant.
Each party's rights of termination under this Section 3 are in addition to any other rights it may have under this Agreement or otherwise, and the exercise of such right of termination will not be an election of remedies.
Requirement to Protect [name of institution]
Personally Identifiable Confidential Information — Hosting, Processing
Updated November 2009
[attach to contract agreement]
For purposes of this Agreement, “Personal Data” shall mean any and all non-public information and other personal information about current or former [name of institution] faculty members, employees, students, prospective students, other persons associated with the College and other individuals. Personal Data includes, without limitation, an individual’s [name of institution] identification number, social security number, bank or other financial account numbers, credit or debit card numbers, driver’s license number, other state-issued identification number, financial information, employee benefits information, health records and biometric data, any information about an individual that has been marked as private, and any additional categories of information about individuals that [name of institution] from time to time designates in writing as Personal Data.
If as part of its services the Consultant will receive and host or otherwise take custody of, or store, or maintain or process, Personal Data on behalf of the College,
then, in addition to complying with other provisions of this Agreement requiring the protection of confidential information, the Consultant shall:
(i) Maintain appropriate safeguards for the confidentiality of Personal Data, which shall be at least as protective of Personal Data as the safeguards set forth in 201 Code of Massachusetts Regulations 17.00;
(ii) Not use Personal Data except as necessary for the performance of its services for The College;
(iii) Limit access to Personal Data to those of Consultant’s employees who have a specific need for such access in order to perform Consultant’s services for the College (each, a “Permitted Employee”), and Consultant shall be responsible for compliance by its employees with this Rider and all confidentiality obligations to the College;
(iv) Not at any time during or after the term of this Agreement disclose Personal Data to any person other than Permitted Employees except with The College’s prior written consent (except as required by law, in which case Consultant shall, unless otherwise prohibited by law, promptly notify the College);
(v) Obtain written approval from the College prior to implementation of any remote (including Internet) access to Personal Data by anyone (including any College personnel or students) not a Permitted Employee;
(vi) Cause all Personal Data to be encrypted when transmitted via the Internet or any other public network;
(vii) Adhere to College rules or more stringent rules for password requirements;
(viii) Segregate server computers hosting any Personal Data from client computers on Consultant’s internal data network and ensure that any such servers are not directly accessible from the Internet;
(ix) Ensure that no Personal Data is stored by Permitted Employees on any portable device, for example laptops or PDAs;
(x) notify the College in writing within four (4) hours of learning of any event that creates a substantial risk of unauthorized acquisition or use of Personal Data or of other harm to any person whose Personal Data is involved in the event;
(xi) Either provide to the College on request the results of any SAS-70 Type I or Type II audit of Consultant’s services or permit an agent of the College to conduct such an audit, at the College’s expense,
(xii) Comply with such additional protections as the College shall reasonably request from time to time; and
(xiii) At any time on the College’s request and in any case upon termination of the services, dispose of Personal Data in accordance with the College’s instructions.
Any provisions of this Agreement that exclude from confidentiality treatment any information that is publicly available, available from third parties, previously known to the Consultant, independently developed by the Consultant, or not specifically designated as confidential by the College, shall be inapplicable to Personal Data.
The provisions of this Rider shall survive the termination of this Agreement.
Note: For more information about SAS 70 audits.
Contract Rider: Requirement to Protect Credit Card Information
In order to ensure the security of credit card holder information and data accessed by Service Provider (replace with name of corporation) in connection with the Agreement and this Addendum (collectively, "Cardholder Data"), Service Provider (replace with name of corporation) hereby agrees to adhere to all applicable Payment Card Industry ("PCI") Data Security standards and requirements with respect to Cardholder Data, including, without limitation, the following provisions:
- Service Provider (replace with name of corporation) must be compliant with the Payment Card Industry (PCI) Data Security Standards compliance level 3 or better at all times. This specifically includes the annual PCI Data Security Standards Compliance Self-Assessment and the quarterly Compliant Perimeter Scan.
- Service Provider (replace with name of corporation) acknowledges and agrees that it is responsible for the security of all Cardholder Data;
- Service Provider (replace with name of corporation) acknowledges that it has no ownership interest in the Cardholder Data and that all Cardholder Data is the property of the applicable payment card brand, acquirer or merchants ("Card Company Affiliates");
- Service Provider (replace with name of corporation) shall only use Cardholder Data for assisting Card Company Affiliates in completing transactions, supporting loyalty programs, providing fraud control services or for other uses specifically required by law;
- Service Provider (replace with name of corporation) represents and warrants that it has a system in place to ensure the continuity of its business and the security of all Cardholder Data in the event of a major disruption, disaster or failure;
- Service Provider (replace with name of corporation) agrees that, upon the College's request in the event of a security intrusion, Service Provider (replace with name of corporation) will provide a PCI representative or a PCI approved third party designated by Harvard with full cooperation and access to conduct a thorough security review, which review shall include, at a minimum, validation of Service Provider's (replace with name of corporation) compliance with the PCI Data Security Standard for protecting Cardholder Data; and
- Service Provider (replace with name of corporation) agrees that, notwithstanding anything to the contrary in the Agreement or the Addendum, the College may terminate the Agreement immediately upon notice to the Service Provider (replace with name of corporation) in the event Service Provider (replace with name of corporation) fails to maintain the confidentiality of any Cardholder Data.
Other Contract Construction Considerations
Using the word “and” vs. “&”. Do not use the ampersand in lieu of the word “and” in any formal, legal document. The ampersand should be used only when it is part of a trademarked business name, e.g., “Marsh & McLennan”.