Contract Management

 View Only
  • 1.  Outsourcing contract review

    This message was posted by a user wishing to remain anonymous
    Posted 04-07-2021 04:24 PM
    This message was posted by a user wishing to remain anonymous

    We are a small organization without an in-house Legal department. If we had one we'd ask them to review all vendor contracts for us. In the absence of an in-house Legal department, how do folks determine which contracts vendor management should review and which outside legal counsel should review?


  • 2.  RE: Outsourcing contract review

    Posted 04-08-2021 09:26 AM
    We have defined this in our program. Any Critical or High Risk vendors are sent to outside legal for review.  For agreements reviewed internally, we have checklists for compliance & legal concerns that we make sure the agreements meet.


  • 3.  RE: Outsourcing contract review

    Posted 04-08-2021 12:05 PM
    ​Melissa,

    Good morning.  Would you be willing to share your checklist(s)?

    Thank you,
    Ashley


  • 4.  RE: Outsourcing contract review

    Posted 04-08-2021 02:46 PM
    Hello! I'm also interested in seeing the checklist if you're open to sharing. Thank you!

    ------------------------------
    Sheila Freyou

    Director, Vendor Management
    Celebrity Home Loans, LLC
    ------------------------------



  • 5.  RE: Outsourcing contract review

    Posted 04-09-2021 08:18 AM
    Our checklist is used for our high risk & critical vendors as well, so for the lower risk contracts the answer may be n/a when PII is not shared, but it includes:
    • Responsibilities of both parties are clearly defined & SLAs are formalized as needed
    • Payment terms are clearly written
    • Data Security and member confidentiality is clearly defined
    • Compliance with federal & state laws are included, including choice of venue
    • A dispute resolution clause, including default & termination/escape clauses
    • Right to Audit is included, with Info Sec, BCDR, etc as needed, at no cost to the credit union
    • Data ownership, proprietary rights, scope of disclosure & disposal of information is defined
    • Limitations of Liability & Warranties
    • Mutual Indemnification
    • Business resumption & breach/timing notifications



  • 6.  RE: Outsourcing contract review

    Posted 04-13-2021 02:44 PM

    I would include Insurance Requirements by the vendor, especially cyber security.

     

     

    The information transmitted via this email is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon this information by persons or entities other than the intended recipient is prohibited. If you receive this in error, please contact the sender and delete the material from any computer.





  • 7.  RE: Outsourcing contract review

    Posted 04-08-2021 04:49 PM
    You could ask your outside counsel to create a template with optional language for when needs change (e.g., something within a checklist or playbook). So long as the contract is within the template or playbook you can keep the review in house, per se. Any changes that are outside of the playbook or perhaps changes to the warranty and indemnity clauses would be sent to outside counsel.


  • 8.  RE: Outsourcing contract review

    Posted 04-08-2021 05:27 PM
    Our in-house Compliance Department has 7 people, but no attorneys and only 2 that deal directly with contract documents on a regular basis.  These are the guidelines we setup to help determine what contracts needed to be reviewed by outside legal counsel, though the guidelines are not cast in stone, and exceptions can be made if appropriate.

    Contracts that DO require attorney review include:
    * Contracts with an annual cost of more than $50,000 (especially if it's a multi-year contract).
    * Contracts between 3 or more parties.
    * Contracts with liability or indemnification requirements, or with specific insurance requirements.
    * Amendments that alter previously approved liability or indemnification clauses.
    * Initial drafts of a template contract that will be used with multiple contract partners, or significant changes to a previously-approved template.
    * New contracts with an entity that will be a critical subcontractor (with critical subcontractor meaning we either could not function without them, or they would be very difficult to replace or could not be quickly replaced).
    * Contracts that involve intellectual property rights.

    Most other contracts and amendments can be reviewed just by internal contract specialists in the Compliance Department.  If the contract specialists have trouble negotiating needed changes with the other party, or for other reasons think attorney involvement is necessary can choose to involve outside counsel (we have one attorney with whom we have a long-term contract, who is a member of the Board of Directors and has worked for our firm for over 20 years, and an associate in the same firm who has worked with us for about 5 years).

    Contracts that are generally OK for just internal review by contract specialists include:
    * Contracts with an annual cost of less than $50,000.
    * Amendments to existing contracts that do not impact liability or indemnification.
    * Contracts that use pre-approved templates with no changes or only minor changes.
    * Renewals of contracts that were reviewed by the attorney with only minor changes (dates, price).
    * General facility maintenance contracts - mowing, snow removal, etc.
    * Facility rentals for meetings unless those include liability or indemnification language, or that require proof of insurance.
    * Routine office equipment purchases (chairs, desks, monitors, phones, computers, etc.).
    * For radio / TV / online advertising.
    * Early termination notices or notices of intent to not renew an existing contract.

    If in doubt, the contract specialists can review with each other, or with the head of the Compliance Department.  Hopefully this is somewhat helpful info.

    - Ivan

    ------------------------------
    Ivan A. Martin
    Senior Contract Administrator
    Iowa Student Loan

    ------------------------------