TASB Risk Management Fund
INSIDERM
Home  ❯  General

Review Your Contracts: the Danger Is in the Small Print

November 30, 2015 Ann E. Greenberg and Winifred (“Winnie”) H. Dominguez, Walsh Gallegos Trevino Russo & Kyle

checklist

Reprinted with permission from a work by the authors 

When approving a contract for your district, it is important to carefully review the document, especially the small print. If any elements of a contract are unclear, we would highly encourage you to inquire with the vendor and your local counsel. If you have any questions relating to your Fund coverage, call 800.482.7276 or e-mail tasbrmf@tasbrmf.org

Before the contract is final, here is a checklist to refer to as you go through the document:

Goods and services, duties and obligations:

  1. Is a detailed Scope of Work included which defines what is to be done, the completion date, and what constitutes an acceptable result?
  2. If it is for a product or non-professional service, is there a detailed list of specifications included, providing the criteria for performance design or both, or in the case of goods, quality, quantity, and other details?
  3. Are all duties and obligations of the district and the other party to the Agreement clearly stated so that all parties know:  1) what the duties and obligation of each party are, 2) how those duties and obligations will be performed and 3) when those duties and obligations will be performed?

Representations, warranties, duties, and obligations:

  1. Has the other party asked the district to represent or warrant anything other than 1) the district’s authority to sign the Agreement or 2) clearly supported and accurate factual information?
  2. Has another party asked the district to keep information confidential?
  3. If so, is information that party considers confidential adequately identified?
  4. Does the contract contain a provision stating that the information may be subject to release under the Texas Public Information Act?

Insurance and Indemnity:

  1. Has the other party asked the district to carry any kind or amount of insurance? If so, verify that the district can provide the coverage and, if not, delete or modify the requirement.
  2. Has the other party agreed to provide adequate insurance to the district based upon an evaluation of the risks associated with this contract?
  3. Does the Workers’ Compensation Insurance require a waiver of subrogation?
  4. Are there requirements in the contract for the district to be named as an additional insured?
  5. Is there a requirement for notification in the event of change or cancellation?
  6. Is the insurance provider required to be licensed in Texas?
  7. Is the insurance company reputable? A- or better?
  8. Does the agreement require the district to indemnify other parties to the Agreement from claims or liability to hold other parties to the Agreement harmless from claims or liability? If so, it should be deleted or conditioned “as permitted by Texas law…”
  9. Does the Agreement require other parties to the Agreement to indemnify the district from claims or liability or hold the district harmless from claims or liability?

Remedies and Damages:

  1. Does the Agreement contain a limitation on or waiver of another party’s liability?
  2. Does the Agreement contain resolution (arbitration or mediation) provision?
  3. Does the Agreement contain a provision that attempts to change or limit the time period during which the district may file a cause of action or lawsuit against the other party based on a breach of the agreement?
  4. Does the Agreement contain a provision for Liquidated Damages? If so, does the per day amount roughly approximate the damages likely to fall upon the district in the event of delay in completion?
  5. Does the Agreement contain a provision waiving Consequential Damage? If so, is the waiver mutual?

Miscellaneous:

  1. Does the Agreement contain a provision selecting Texas law and local venue?
  2. Does the Agreement contain a provision confirming that the district does not waive its governmental immunity?

Tagged: contracts, "legal topics"