Authority to Sign Contracts

Some MSU employees may not understand which MSU officials are authorized to sign contracts on behalf of the university (regardless of whether the documents are named Non-Disclosure Agreements, MOAs, Confidentiality Agreements, MOUs or by some other name).

IHL Board Policy #707 (see excerpt below) makes clear that no one other than the IHL Board, the Institutional Executive Officers, and those MSU officials to whom contract signature authority has been specifically granted in writing by the MSU President, are authorized to sign any contract, of any type, on behalf of MSU.

The Institutional Executive Officer of each institution, or a designee as evidenced in writing, is authorized to sign all other official documents for and on behalf of the institution for which he or she is responsible. Anyone who signs a contract without authorization is subject to disciplinary action, up to and including termination.
(BT Minutes, 9/90; 1/98; 11/2005)

The MSU Presidents, past and present, have executed written letters authorizing specific MSU officials to execute contracts on behalf of MSU. The number of such officials is small and copies of the written delegations of signature authority from the President are maintained by the MSU Auditor's office. If one wonders if he/she has contract signature authority for MSU, then all they need to check is whether the MSU Auditor's office has a copy of what they believe to be their authorization. Unless one is certain and has a copy of the signature authority delegation letter signed by the President in their hands, then they should not rely on any document or employment position to assume that they have authority to execute a contract on behalf of MSU.

Unless an MSU employee has received a specific written authorization from the President to sign contracts on behalf of MSU, t hen an MSU employee who does so is not only risking disciplinary action, including termination, but also will undoubtedly expose himself/herself to "personal liability" if the other party signing the contract sues or otherwise seeks damages for breach of the contract. MSU's legal defense, which has been used in past lawsuits of this nature, is that the MSU employee who signed the contract had no authority to do so and MSU disavows the contract and any liability that is resulting therefrom.

Keep in mind that there are times when an MSU employee, in his/her official capacity, may sign confidentiality agreements or non-disclosure agreements but only when the employee is not signing the document on behalf of MSU. For example, a researcher may desire to obtain certain material from a third party to use in research. The MSU researcher may then sign an NDA, for example, in which the researcher, in his/her official capacity agrees to maintain the confidentiality of the material, limit the access to the material by others, and agrees to other normal terms in such an arrangement. HOWEVER, the researcher must ensure that the language in the agreement he/she is signing does not contain language that will attempt to bind MSU or indicate that the agreement is between MSU and another party. Thus, just because the signature block simply list the MSU employee in his official capacity, or in some other capacity of a personal nature, does not mean that he/she is authorized to sign the document. If the document contains language attempting to impose obligations on MSU, rather than only the researcher, then the document cannot be signed by anyone other than an MSU official who has received a written delegation of contract signature authority from the MSU President.