Glossary
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Act of God
Also know as Force Majeure. Unexpected or uncontrollable events, including those caused by nature that can impact the contracts price, terms and conditions. These events are not due to contractor’s or client’s negligence and may excuse contractor performance during the events and under certain conditions caused by them. Acts of God or nature or disruptive conditions for which a contractor cannot be held responsible.
Addendum/Addenda
A written change, addition, alteration, correction, or revision to a bid, proposal or contract document. These documents are prominently used for changes to scope of services or services to be performed, duration of contract, or payment terms. The terms addendum, addenda and amendment are synonymous.
Affidavit
A written statement of facts provided by one party which may be made under oath before a person of authority or a written declaration made under oath before an authorized official, usually a Notary public.
Agent
A person authorized by a superior, i.e. principal, to act for him or her. In public procurement, this designation is usually incorporated into statute and ordinance. Empowered to act for another.
Agreement
An understanding, usually in writing, between two or more competent parties, under which one party agrees to certain performance as defined in the agreement and the second party agrees to compensation for the performance rendered in accordance with the conditions of the agreement. Agreements and contracts are sometimes used synonymously. Generally OBFS uses the term agreement to describe a revenue generating contract and the term contract to describe a funds payable or no funds contract.
Amendment
An agreed addition to, deletion from, correction or modification of a document or contract. To revise or change an existing document. A formal revision, improvement or correction. The terms addendum and amendment are synonymous.
Arbitration
A process by which a dispute between parties is presented to one or more disinterested parties (arbitrators or neutrals) for a decision. The contending parties agree to accept the arbitrator’s decision with no further appeal process, also known as binding arbitration. The resolution of a conflict between parties by a party removed from the dispute.
Breach of Contract
Failure by either contracting party to fulfill a contract, wholly or in part, without legal excuse. An action by one party to a contract that violates the terms of the contract thereby permitting the other party to declare the contract in default. The failure of one party to fulfill the terms of a contract when there is no legal reason for that failure.
Change Order
A written alteration that is issued to modify or amend a contract or purchase order. A bilateral (agreed to by all parties) or unilateral (government orders a contract change without the consent of the contractor) request which directs the contractor to make changes to the contracted scope of work or specifications.
Claim
A written assertion or demand, by one of the parties to a contract, which seeks, as a contractual right, payment of money, adjustment of contract terms, or other relief, for injury, loss, or damage arising under or relating to the contract.
Client
An individual or organization to whom the University is providing some product(s) or service(s).
Conflict of Interest
A clash between the public interest and the private pecuniary interest of the individual concerned. The term identifies those situations where contractors or public officials may obtain a benefit from a public contract. Conflicts of interest may result in a breach of ethics or an ethical code.
Consequential Damages
The loss of revenues and/or profits incurred by a purchaser as a result of a seller’s breach; may involve injury to a person or property, including loss of life or business.
Consultant
To work or serve in an advisory capacity. A person or company/organization that possesses unique qualifications which allow them to perform specialized advisory services usually for a fee.
Contract
A contract is an obligation, such as an accepted offer, between competent parties upon a legal consideration, to do or abstain from doing some act. A contract is a legally binding promise, enforceable by law.
Contract Modification
Any alteration in specifications, delivery point, frequency of delivery, period of performance, price, quantity, or other provisions of the contract, accomplished by mutual written agreement of the parties to the contract.
Court of Claims (Illinois Court of Claims)
The state department responsible for maintaining the official records and case files of the Court and providing support services to the Judges and Commissioners, who rule regarding formal monetary claims made against the state (except worker compensation claims). Under Illinois law, a contract claim against the University must be brought in the Court of Claims, which provides us with a cap on liability.
Damages
A monetary settlement awarded to a party that is injured through a breach of contract. Compensation, usually monetary, for injury to goods, persons or property.
Delegation of Authority
The conferring of authority by someone who has it, to another person, in order to accomplish a task or sign legal documents such as contracts.
Deliverable
The completion of a milestone or the accomplishment of a task. Used to measure successful performance.
Deviation
To differ or move away from an established course. To offer an alternative product, service or business solution from what has been established or specified.
Dispute
A contractual disagreement or misunderstanding between contracting parties specific to contract provisions or language. Resolution is generally through pre-established administrative procedures or agreed upon alternative dispute resolution provisions.
Evergreen Contracts
Contracts with automatic renewal clauses or provisions for renewals for a specified number of years. This has the benefit of allowing suppliers and agencies to establish longer-term working relationships.
Fair Use
Use of a work that is not an infringement of a copyright because it is used for the purpose of criticism, comment, news reporting, teaching, scholarship, or research.
Force Majeure
Unexpected or uncontrollable events, including those caused by nature that can impact the contracts price, terms and conditions. These events are not due to contractor negligence and may excuse contractor performance during the events and under certain conditions caused by them. Acts of God or disruptive conditions for which a contractor or carrier cannot be held responsible.
Gross Negligence
Actions that display a complete disregard for life and safety. A deliberate indifference to the rights of others. A failure to act in a prudent manner or to take reasonable precaution.
Guarantee
To warrant or insure performance or quality. A warranty. A written assurance attesting to the quality or durability of a product.
Hold Harmless
A clause that requires the contractor to assume liability for damages resulting from an action taken by the contractor and absolves the government or other contracting body from any responsibility for the consequences of the action.
Implied Authority
Authority that is not defined expressly, but is only determined by inferences and reasonable deductions arising out of the conduct of the principal toward the agent and the agent’s actions.
Implied Warranty
A warranty or promise arising by operation of law that something which is sold shall be merchantable and fit for the purpose for which the seller has reason to know it is required. A contract to do certain work contains within itself an implied warranty that the work shall be done in a professional manner.
Indemnification
The agreement of a contracting party to hold the other party harmless, to secure the other party against loss or damage, or to give security for the reimbursement of the other party in case of an anticipated loss.
Indemnify
To protect against hurt or loss; to exempt from incurred penalties or liabilities. To compensate or pay for damages.
Independent Contractor
A worker hired by a business or public entity to accomplish a given result who has the right to control or direct his or her own work as to the details and means by which the desired results are achieved.
Inherent Authority
Authority based on a government’s sovereignty, to enter into contracts, although not explicitly authorized.
Intellectual Property
Includes inventions, patents, copyrights, trade secrets, trademarks, technical data, industrial designs that are generally protected and proprietary.
Intergovernmental Contract
Also referred to an Intergovernmental Agreement (IGA). An agreement in which one government contracts with another for the delivery of goods and services.
Invoice
A written account or itemized statement, addressed to the purchaser, of merchandise shipped or services performed, together with the quantity and the prices and other charges. An invoice is the seller’s bill or written request for payment of work or services performed under the contract.
Legality of Purpose
To be valid and enforceable, a contract must be consistent with federal, state or local law and cannot violate legal statutes of public policy.
Memorandum of Agreement (MOA) / Memorandum of Understanding (MOU)
Traditionally, a non-binding interim agreement used to describe the topics or points that will be addressed in a definitive agreement. It should not be a final agreement by itself, involve the payment or receipt of money, or include any remedies for breach. MOA’s and MOU’s may be used internally by University departments or within the University system.
Scope of Work
A detailed description of the expectations and services to be provided by each of the parties entering into a contract.
Self-Insurance
The University insures itself, its employees, officers, and agents. Additionally, contracts specifying insurance requirements may cover contracting parties as specified. In the event of a claim, the University would be responsible for any damages or claims.
Sovereign Immunity
Doctrine precluding a civil suit against a state or government.
Superior Sovereign
The University, as part of the State, is the superior sovereign and is not subject to local regulations. Any agreement to be subject to local laws, regulations, and ordinances may constitute a waiver of sovereign immunity.
Third Party
The non-University party entering into a contract and/or providing or receiving goods or services. Or, a non-related party sometimes referenced in an indemnification clause. The University cannot accept responsibility for the acts of third parties.
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Last Updated: Jan 3, 2013