105 - Introduction to Terms and Conditions

Question 1

Terms and Conditions

Answer 1

A collective set of legal requirements that define the legal parameters of a contract

-legally bind both parties
-reduce the risk of miscommunication and differing expectations in the delivery of the goods/services

Question 2

Contractor/Subcontractor Relationship

Answer 2

The public entity’s contract terms only bind the contractor. It is the responsibility of the contractor to ensure that the subcontractor meets the terms and conditions.

Question 3

Importance of Terms and Conditions

Answer 3

1. They define the rights and responsibilities of both parties
2. Their presence and understanding helps avoid surprises and disagreements
3. They are required by law to protect the state or public entity’s interest
4. Risk to both parties is minimized

Question 4

How do they protect the state/public entity and the supplier?

Answer 4

If either party fails to uphold their responsibilities under the contract or if there is a difference in the way the contract is interpreted, a court of law may have to review the contract and provide guidance.

-Courts will review and consider its objective meaning

Question 5

Objective Meaning

Answer 5

Meaning that a reasonable person would give it; not necessarily what meaning was given to it by the drafter.

Question 6

Regular (Terms and Conditions)

Answer 6

those terms and conditions which are the same for all contracts

Question 7

Special or Custom (Terms and Conditions)

Answer 7

terms and conditions which are specific to each solicitation depending on the goods/services to be provided.

Question 8

Can terms and conditions be a subject of the negotiation process?

Answer 8

Yes, sometimes terms and conditions is the reason for the negotiation, but some may be unable to be changed/altered due to provisions.

Question 9

Approval Process

Answer 9

State/public entity contract terms and conditions often require a review and approval process.

Question 10

Review and Approval Factors

Answer 10

The review and approval process in some state/public entities is dependent upon the dollar value of the contract as to which level of review and approval is required prior to finalization.

Question 11

Signatory Persons

Answer 11

Additionally, the state or public entity may require that all signatory persons be bonded which covers the state or public entity in the event of legal action.

Those persons who may bind the state or public entity in a legal contract typically are required to have their signature and authority level on file with the proper entity within the state or public entity. In many cases, this is the State Attorney General’s Office.

Question 12

Signatory Process

Answer 12

In some states, there is a two party signing of the contract while in other states, the supplier’s submission of a signed bid represents the supplier’s signature on the final contract, thus only a one-party signature process occurs.

Question 13

Bonding

Answer 13

Some states/public entities require that signatories be bonded to cover the state or public entity in the execution of the signatory’s responsibilities.

Question 14

State Signature Authority

Answer 14

State Signature authority carries with it defined responsibilities under the laws of the state. In many states, State Signature authority carries with it a personal liability as well as a state liability.

Question 15

Does a Supplier/Vendor have to accept the State’s terms and conditions?

Answer 15

State and public entity solicitations often state that, by submitting the bid, the supplier agrees to the terms and conditions

HOWEVER, the supplier may take exception, meaning that they clarify in their bid that they are not agreeing to the said provision, by submission of their bid

Question 16

Are exceptions always granted to a supplier/vendor?

Answer 16

No.

If the exception is within the context of the law, it may be permitted. Terms and conditions that are set forth in the law cannot be altered.