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Navigating Contracts: Need-to-Know Information for School Treasurers and Business Officials

By Christina Henagen Peer posted 02-12-2024 12:27 PM

  
School treasurers and business officials play a crucial role in managing the financial affairs of educational institutions. One key aspect of their responsibilities involves reviewing school district contracts for goods and services. Understanding the intricacies of contract negotiation and drafting is essential to safeguard the district’s interests and ensure smooth operations. Here are some vital elements school officials need to consider when navigating contracts: 
 

Clear Identification of Parties:

The foundation of any contract lies in the clear identification of the parties involved. School treasurers and business officials must ensure that the legal names and details of the contracting parties are accurately stated in the contract. This avoids potential misunderstandings and establishes a solid basis for the agreement. For contract purposes, the school district should be identified as the XYZ City School District Board of Education. The contract should also state the legal name of the entity with whom the district is contracting.

Venue Provisions: 

Venue provisions determine the location where any legal disputes arising from the contract will be resolved. When entering into a contract, review the venue provisions to ensure the venue stated in the contract is convenient and fair for both parties. For example, a venue provision stating that all litigation must occur in California is not convenient for an Ohio school district. Clear venue provisions help in avoiding jurisdictional complications and streamline the dispute resolution process.

Governing Law Provisions:

Specifying the governing law is crucial for interpreting and enforcing the contract. Contracts typically will include a provision stating which state’s laws will apply to the contract. Doing so ensures a consistent and predictable legal framework, reducing the risk of disputes over conflicting laws.

Termination and Renewal Provisions:

Contracts should include detailed termination provisions that outline the circumstances under which the agreement can be terminated, as well as the process for doing so. School officials must consider factors such as breach of contract, non-performance, or other relevant conditions that may lead to termination. They should also be on the lookout for contracts that allow the service provider to terminate at will while requiring excessive notice if the district elects to terminate. School officials should also carefully review any renewal provisions in the contract, particularly those that require notice to prevent automatic renewal. Contract provisions that allow renewal options are generally preferable.

Scope of Agreement:

Defining the scope of the agreement is crucial to avoid misunderstandings and disputes. The contract should clearly articulate the goods or services being provided, as well as any limitations or exclusions. The contract should also specify the obligations of each party (e.g., the staffing agency will provide an occupational therapist, the school district will provide an adequate workspace). A well-defined scope ensures that both parties have a shared understanding of their respective responsibilities, minimizing the risk of conflicts.

Length of Agreement:

The duration of the contract is a critical consideration. Contracts must clearly specify the start and end dates of the agreement. Understanding the length of the agreement is essential for planning and budgeting purposes.

Payment Terms: 

Clearly defined payment terms are an essential element of a good contract.  Contracts should specify payment amounts, due dates, and any applicable late fees. School officials should ensure that these terms are workable from an operational perspective and are fair to both the provider and the district.   

Employee Issues: 

When reviewing contracts for service providers (e.g., nurses, behavior analysts, etc.), school officials should ensure that these contracts clearly identify how issues regarding the service provider’s performance will be addressed. Contracts should allow school districts an “out” if a particular service provider has performance issues. Being proactive about how performance issues will be handled, including the agency’s obligation to send an alternate service provider, prevents potential disruptions to services and district operations.

 
Careful attention to details such as the ones discussed here, as well as others, is vital when entering into a contract. School treasurers and business officials should carefully review contracts and negotiate workable terms when needed. Additionally, in most instances, review of a contract by legal counsel prior to board action is advisable. Taking a proactive approach can prevent costly issues later and helps safeguard the district’s financial well-being.
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