Contracts and Legal Documents

1. PURPOSE

Legal documents impact the rights, duties, and obligations of Brigham Young University–Hawaii (“BYU–Hawaii” or “university”) and therefore must be reviewed, approved, and signed only by university personnel who have authority to do so. This policy is established to reduce financial, legal, and related risks and to ensure that appropriate fiscal and management controls are in place for the benefit of the entire institution and to establish policy regarding signature authority, and the delegation of signature authority, with respect to legal documents that bind the university. The requirements set forth in this policy are necessary for officers, employees, and other agents of the university to avoid (1) committing the university to a transaction or non-monetary obligation without having authority to do so, and (2) exposing the university to liability or other harm. This policy is applicable to all operations of the university.

2. POLICY

2.1. General Rules Governing Review and Approval of All Legal Documents

Individual campus units are responsible for drafting, negotiating, reviewing, and obtaining approval pursuant to this policy for all contracts and legal documents within their respective area(s) of responsibility, except as provided herein. A campus unit contemplating signing, or presenting to a third party for signature, a legal document and/or entering into a contract that directly and materially impacts the designated area(s) of responsibility of another campus unit (e.g., purchasing, facilities management) must allow such other campus units to review and approve the relevant aspects of such legal document before it is signed unless such other campus units previously has delegated authority for such review and approval to the first campus unit.

Not every contract is a legal document (e.g., oral contract) nor is every legal document a contract (e.g., a release). Although BYU's Legal Documents Policy does not address that issue, it is probably good to include it in this policy.

2.2. Authority to Enter into Contracts and Sign Legal Documents Involving Transactions

No officer, employee, or other agents of the university may enter into a contract or sign any legal document that commits the university to a transaction with a value in excess of the authority limits defined in this policy, except as delegated pursuant to this policy.

2.3. Review of Legal Documents by the Office of the General Counsel

Except as provided herein, before being signed, a legal document containing any of the following must be submitted to the Office of the General Counsel (OGC) for review unless the OGC has previously delegated authority for such review of a particular legal document or category of legal documents to another campus unit:

1. Any response to a third party’s assertion of a threatened or existing legal claim against the university, or any statements that would admit or imply liability or fault on the part of the university with respect to such a threatened or existing legal claim.
2. Any assertion of a threatened or existing legal claim by the university, or any statement that would materially impact the university’s position with respect to such a legal claim.
3. Any release or waiver of liability by or against the university, or any statement intended to settle any legal claim that has been or may be asserted by or against the university.
4. Any agreement with a government regulatory or administrative body or officer.
5. Any university obligation related to non-discrimination or affirmative action.
6. The assertion of any religious or other exemption to any law or regulation that may be enforced against the university.
7. The creation, transfer, or other disposition of any university ownership interest, voting right, or managerial responsibility in any legal entity (e.g., a corporation or limited liability company).
8. Any language that requires the university to indemnify, defend, or hold harmless another party.
9. Any transaction that deals with an activity that poses a substantial risk of property damage or personal injury (e.g., risk of bodily injury, property loss, data breach, etc.).
10. A commitment by the university to obtain insurance or to provide proof of insurance.
11. Any language establishing governing law, jurisdiction, or venue outside of the United States, or requiring any form of alternative dispute resolution (e.g., mediation or arbitration).

Notwithstanding the foregoing, review by the OGC is not required for a contract of adhesion, such as:

• A browse-wrap agreement is used for the general terms and conditions of a website.
• A click-wrap agreement is used in connection with an off-the-shelf software product.
• A common travel-related transaction ( e.g., hotel reservation, car rental, airline ticket).
• A standard warranty on a piece of equipment or vehicle

In addition to seeking legal review for the situations set forth above, supervising authorities within any campus unit should contact the OGC if they have questions regarding the legal sufficiency, interpretation, or binding nature of a legal document or its legal impact on the university. The OGC generally reviews only the legal terms of a legal document, while the relevant supervising authority of the relevant campus unit generally has responsibility for the business terms of a legal document. Once the OGC has reviewed the substance and form of a legal document, (a) OGC’s subsequent review of that legal document (or substantially similar provisions in the same type of legal document) is not required; and (b) the substantive legal terms of such document should not be altered without consulting the OGC.

3. IMPLEMENTATION

3.1 Definitions

3.1.1. Campus Unit

Campus unit means an individual office, college, department, or other auxiliaries of the university.

3.1.2. Contract

Contract means an agreement between parties creating terms that bind the university to any legal obligation. Typically, at least one party to the transaction is external to the university.

3.1.3. Contract of Adhesion

Contract of Adhesion means a standard-form contract with generally applicable, boilerplate terms and conditions that are (1) set by someone other than the university, and (2) are not reasonably susceptible to negotiation or modification by the university.

3.1.4. Legal Document

Legal document means any document, including written contracts, in any form, whether hard copy or electronic, which (1) expresses a legally enforceable act, process, duty, obligation, or right; and (2) is or may be binding on the university in whole or in part.

3.1.5. Non-Monetary Obligation

Non-monetary obligation means an obligation or duty upon, or a restriction against, the university, which is not readily susceptible to assessment of a dollar value.

3.1.6. Signature

Signature means any written or electronic mark or other forms of assent that signifies acknowledgment, approval, acceptance, or obligation, on or in connection with a legal document. To “sign” means to make such a mark or to provide such assent. A signature may be written on a physical document or affixed in electronic form.

3.1.7. Signature Authority

Signature authority means actual or delegated authority to sign a legal document and bind the university to its terms and conditions.

3.1.8. Transaction

Transaction means (1) an acquisition or purchase of any property or service by the university; (2) a sale, transfer, or other disposition of any university asset; or (3) a commitment of the university’s personnel or resources. A series of related transactions with the same party for the same subject matter is considered a single transaction.

3.2 Authority Limits

Signature authority of university personnel is determined based on the following limits.

Authorized Signer	Monetary Transaction Limits	Non-monetary Transaction Limits
President (or delegate)	No limit	No limit
President's Council Member	$250,000	Binds university for up to 10 years
Director of Construction Chief Information Officer; Facilities Director	$100,000	Binds university for up to 5 years
Other employee acting within scope of employment and with approval from supervisor	$75	Binds university for up to 1 year

*Purchases over $100,000 must receive board approval and are most often done as part of the budgeting process.

Exceptions to maximum limits must be approved by the university's President’s Council.

In case of legal documents requiring a second approver, such second approver should have independent signature authority pursuant to this section, or have approval from the President's Council, to sign the legal document.

3.2.1 Purchase Orders

Purchasing buyers are authorized to sign all approved purchase orders on behalf of the university when the purchase orders follow and related to a signed contract. All purchase orders must be approved in Workday, by the cost center managers and appropriate officers listed above, depending on the price threshold. The governing contract, whether or not it is attached to a purchase order, must be first signed by an individual with signature authority.

3.2.2. Change Orders

Pursuant to this policy, the monetary value of a change order includes the change order and the monetary value of the original contract and any intervening change order(s). Signature authority for change orders follows the authority limits described above.

3.3. CONSTRUCTION CONTRACTS

Contracts related to construction, including those designated as “CNA” projects, must be signed prior to issuing a Notice to Proceed letter or Purchase Order to the contractor.

3.4. RESTRICTIONS APPLICABLE TO ALL LEGAL DOCUMENTS

An officer, employee, or other agent of the university may sign a legal document only if all of the following conditions are met:

1. The legal document is directly and materially related to a matter that is within such individual’s assigned and authorized area(s) of responsibility to the university, except as delegated or otherwise authorized pursuant to this policy.
2. The signing of the legal document does not violate any university policy.
3. The individual either (1) has actual or delegated signature authority within the authority limits set forth in this policy, both for any transaction and for any non-monetary obligation, which are referenced in the legal document; or (2) is signing the legal document for purposes of acknowledgment only, and the legal document also is being signed by someone who possesses such signature authority.

Either the OGC or the relevant supervising authority of a campus unit may require acknowledgment signatures on a legal document, provided that someone with signature authority also signs the legal document.

3.5. DELEGATION OF AUTHORITY TO SIGN LEGAL DOCUMENTS

A delegation of signature authority

• Must be in writing (email is acceptable).
• Must be limited to the individual’s own signature authority may cover either a specific legal document or an entire category of legal documents.
• May not be sub-delegated to another individual.
• May be revoked at any time by the delegating individual or the delegating individual’s supervisor.

Throughout the duration of any delegated signature authority, current electronic copies of the delegation must be kept on file by both the delegating individual and the recipient of the delegated signature authority.

3.6. AUTHORITY TO SIGN WHEN PERSON WITH AUTHORITY IS ABSENT OR INCAPACITATED

In the event that the University President or other member of the President’s Council (or his or her authorized delegate) is absent or incapacitated and is therefore unable to sign a legal document that he or she has authority to sign under this policy, another member of the President’s Council may sign the legal document after obtaining approval from the President’s Council.

In the event that any other individual is absent or incapacitated and is therefore unable to sign a legal document that he or she has authority to sign under this policy, and no other individual who has authority or has been delegated authority to sign is available, then only the University President or an individual designated by the President’s Council may sign or delegate authority to sign such legal document.

3.7. ELECTRONIC SIGNATURES

The university accepts an individual’s electronic signature as legally binding and equivalent to a handwritten signature, with very rare exceptions (e.g., certain tax documents).

3.8 RETENTION AND TRACKING OF LEGAL DOCUMENTS

A signed electronic copy of each legal document and any delegation of signature authority necessary to sign such legal document must be kept on file in the office of the individual who signed such legal document for the relevant period required by the university’s records retention policy.

A copy of all signed contracts relating to purchases should be provided to and maintained by the university’s purchasing department.

For purposes of authentication, evidentiary proof or preservation, or compliance with other legal requirements or best practices, the OGC may require a campus unit to retain and store the original signed hard copy of a legal document.

4. RELATED POLICIES AND PROCEDURES

• Purchasing Policy
• University Records Retention Policy