Negotiating Terms and Conditions in Research Agreements
Common Problematic Terms Heading link
The following terms and conditions may be problematic for the university when negotiating a sponsor’s template agreement, resulting in a longer time to finalize and execute the contract.
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Arbitration
The University cannot agree to binding arbitration or mediation as a form of dispute resolution. Arbitration rules interfere with our right to be sued in the State of Illinois under the Illinois laws, and the University rights to sovereign immunity.
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Confidentiality
The University is a state entity and is therefore subject to Illinois Freedom of Information Act laws. It is in the best interest of the sponsor to mark its written confidential information as “CONFIDENTIAL” and oral communications for which sponsor wishes to be considered as its confidential information should be reduced to writing within thirty (30) days of the oral communication and marked as “CONFIDENTIAL”.
The University’s obligations of confidentiality with respect to sponsor’s confidential information must have a termination point. The University is acceptable to a limit of five (5) years after the termination of the agreement.
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Disclaimer of Warranties
Since research by its nature is unpredictable and without guarantee of predictable results, research is conducted on a reasonable basis. Agreement provisions cannot be accepted that guarantee results, impose penalties for failure to make progress by firm deadlines, or provide for withholding of payment if the sponsor is not satisfied with the results. In the performance of research we must explicitly disclaim certain warranties that may attach by operation of law. The disclaimer that appears in our research contracts are as follows:
INSTITUTION MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING ITS PERFORMANCE UNDER THIS AGREEMENT. INSTITUTION DISCLAIMS ANY WARRANTY OF MERCHANTABILITY, USE OR FITNESS FOR ANY PARTICULAR PURPOSE AND NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS WITH REGARD TO STUDY DATA, RESULTS, INVENTIONS, COPYRIGHTABLE WORKS, TANGIBLE RESEARCH PROPERTY, OR OTHER RESEARCH RESULTS PROVIDED BY INSTITUTION.
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Governing Law
As an agency of the State of Illinois, the University cannot agree to the governing laws of another state other than Illinois. In the alternative, we can remain silent on this provision.
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Indemnification
The University expects that the Sponsor will indemnify and hold harmless the University, its trustees, Principal Investigator, officers, agents and employees from any and all liabilities, claims, actions or suits made by third parties arising from the University’s performance of a study, including the Sponsor’s use of the Study data, results and inventions and the negligence or willful misconduct of the Sponsor. Indemnification by the University will be limited to the extent permitted by Illinois law, and only for University’s negligence or non-compliance with applicable laws.
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Insurance
To support the sponsor’s indemnification obligations the sponsor must maintain a sufficient level of insurance (e.g., $3 million dollars per occurrence). The University is self-insured – see plan documents at University of Illinois Liability Self-Insurance Plan.
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Intellectual Property
The University cannot agree to broad ownership language that allows the sponsor to own inventions that “result from” or “arise out of” a research study. In addition, the University adheres to its own Intellectual Property Policy that limits the ability to assign inventions to a sponsor of research.
UIC owns all inventions of its personnel which are conceived of or first actually reduced to practice as part of or as a result of a University research; activities within the scope of the inventor’s employment by the University; or activities involving the use of University time, facilities, or materials. This includes all sponsored research projects whether from public, non-profit or private sponsors.
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Limitation of Liabilities
It is the University’s expectation that each party will be responsible for its own negligent acts or omissions. As a state entity subject to laws that limits the University’s ability to take on liabilities over and above the amount in its treasury, the University must specifically exclude any contingent unlimited liability that may or may not be covered by legislative appropriations or any funds the University may have on hand. Following is sample limitation of liability language that is in all of our research contracts:
INSTITUTION SHALL NOT BE LIABLE TO SPONSOR FOR INDIRECT, SPECIAL, CONSEQUENTIAL, PUNITIVE, INCIDENTAL OR OTHER DAMAGES (INCLUDING LOST REVENUE, PROFITS, USE, DATA OR OTHER ECONOMIC LOSS OR DAMAGE) HOWEVER CAUSED AND REGARDLESS OF THEORY OF LIABILITY (WHETHER FOR BREACH OR IN TORT, INCLUDING NEGLIGENCE) ARISING FROM, RELATED TO, OR CONNECTED WITH SPONSOR’S USE OF RESEARCH DATA, RESULTS, INVENTIONS, COPYRIGHTABLE WORKS, TANGIBLE RESEARCH PROPERTY, OR ANY OTHER RESEARCH RESULTS PROVIDED BY INSTITUTION, EVEN IF INSTITUTION WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGE
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Publication
University research is conducted openly and is intended to lead to the publication and dissemination of the results of research activities. The University recognizes the legitimate need of sponsors to protect their proprietary or confidential information. When appropriate, publications may be reviewed by sponsors in order for the sponsor to request the removal of their defined confidential information and to allow for a reasonable amount of time to secure protection of patent rights. The University cannot accept any agreement language which prohibits the publication of research results or allows for the sponsor to approve or disapprove the publication in whole or in part.
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Term of Agreement/Period of Performance
For University accounting purposes, there must be an estimated termination date for the agreement. In the event a sponsored agreement is terminated, the sponsor will be expected to reimburse the University for all costs incurred through the date of termination and for all non-cancellable financial commitments.