CEB Contract Review Guidelines version 09 Oct 2019

Needs
Information which must be included in the contract: Affirmative
Attention

Legal names of the parties.

Parties: Does the contract specify the parties involved and is
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the person or people signing the agreement legally authorized
to commit to the agreement?

Purpose and scope of the contract.

Offer: Does the contract clearly explain what is being
2 proposed?

Acceptance: Has that offer been formally accepted?

Term of the contract, including a specific beginning and end

date.

Dates: Does the contract specify relevant timetables, such as

3 dates for delivery or the length of the agreement?

Renewal Term: Does the contract contain a renewal provision?

If so, does the ministry have to act to renew or will the contract
renew automatically?

Responsibilities of each party, including any time requirement

4 for performance.

Confidentiality provisions. (Vendor and its agents are prohibited

from using or disclosing financial, personal, and other sensitive
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information about Company and its members, except as
necessary to perform pursuant to contract terms.)

Compliance clause (parties agree to comply with all applicable

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federal and state laws and regulations)

Both parties have provided something of value (i.e., cash

payment for some product/service).
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Consideration: Does the contract clearly state what each party
will get in return for fulfilling the promises made in the contract?

Payment terms, including some manner for determining when

payment is to be made (i.e., specific dates when payment is to
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be made, payment to be made within thirty days of receipt of
invoice, etc.)

9 Signature lines for execution by appropriate parties.

Information which should be included, if applicable: Affirmative

Any other conditions considered essential in order for the

1
contract to occur.

2 Additional rights and/or responsibilities of each party.

Requirement of receipts if payment for expenses is being

3 made, statement of any requirements for reimbursement and a
limitation on payment.

If one party is collecting money and paying a portion to the

other party, the amount or percentage should be clear and the
4
contract should always include the right to review and audit the
records of the party collecting money. A segregated account at

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 CEB Contract Review Guidelines version 09 Oct 2019

Company is also recommended.

Clear identification of the party who will be responsible for any

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costs associated with the contract.

Right to cure in case of default (preferably between 10

business – 30 calendar days). No right to cure for breach of
confidentiality provisions.
6
Default: Does the contract list specific circumstances, actions,
or failures that will be considered breaches of the agreement?

Handling and security of non-public personal information. (Must

be handled and secured in a commercially reasonable manner
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consistent with Company’s privacy policy and applicable federal
and state privacy laws)

Reporting of data or confidentiality breach (Party required to

report any breach in security or confidentiality of information.)
8
Confidentiality Clause: Does the agreement include a
requirement that both parties protect personal information, and
is there a penalty for not doing so?

Party responsible for breach of confidentiality shall be

9 responsible for all direct and indirect costs, losses and
damages to Company and its members.

Warranties. (For services, should warrant that services to be

performed in a professional and workmanlike manner
consistent with industry standards. For software, products, or
any license granted, should warrant that it does not infringe on
any intellectual property or other proprietary rights.)
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Warranties/Disclaimers: Unless disclaimed, some agreements
automatically contain warranties. Has the ministry’s attorney
reviewed the contract to ensure that each party has the
appropriate level of responsibility?

Service Level Agreements. (Usually an attachment. Includes

performance standards; response times and requirements; and
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penalties for failure to meet performance standards (either
refund or credit against future payment)

Indemnity and hold harmless clauses (Vendor should indemnify

and hold Company harmless from liability as a result of
negligence by the party, including a material breach of the
written contract; also against software, product and/or license
infringement claims.)
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Hold Harmless and Indemnity Clauses: Does the contract
contain a provision that will “hold harmless, indemnify, and
defend” the ministry or require the ministry to do so? If so, does
the contract clarify that adequate insurance is available to cover
these responsibilities?

Limited right to subcontract. (Parties do not have the right to

subcontract responsibilities without prior written notice and
approval. Any approved subcontracting clause must also
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include language that subcontractor must adhere to terms of
the written contract and vendor assumes full liability for
subcontractor.)

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Evidence of insurance coverage. (Vendor should provide

reliable evidence of current insurance coverage in an amount
sufficient to protect Company’s interests.)

Ministry’s Insurance Requirements: Does the ministry carry the

type of insurance coverage that the contract requires?

Contracting Party’s Insurance Requirements: Does the other

party carry adequate insurance to cover the risks created by
that party while performing his duties under the contract?

15 Proof of Contracting Party Complying with Insurance

Requirements: Has the other party to the agreement shown
proof of insurance coverage with a certificate of insurance and
appropriate endorsements—indicating specific coverages,
applicable limits, and naming the ministry as an additional
insured?

Waiver of Subrogation: If the ministry is required to waive its

right to reimbursement against the other party, do you know if
your insurance provider requires the ministry to waive the right
to recover, in writing, before a loss takes place, and does the
insurance company have to approve this?

Statement of what will happen to contract if another event or

contract this contract is contingent on does not occur.
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Penalties/Fees: If there are any penalties or fees assessed if
certain actions are taken or not taken, does the contract clearly
state what has to happen for the penalties or fees to apply?

Attachment and incorporation of any underlying contract or

17 additional terms a party is required to follow the terms or
conditions of.

Vendor reporting requirements (i.e. content and frequency of

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reports)

Clear specification of the rights of the parties to any intellectual

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property at issue (i.e usage rights for software license).

Ownership of intellectual property rights of any software or

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other products/services to be developed as part of the contract.

Specification of ownership of any equipment or other personal

21 property after the contract is ended when purchased as part of
the contract.

Right to terminate for convenience (without cause) and/or for

cause. Should also include a statement of conditions which
would result if contract is terminated early; inclusion of
cancellation clause (30 days written notice, etc.)
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Termination Clause: Does the contract define the
circumstances that allow the other party to terminate the
contract, or does the contract indicate what other options will be
available to protect the interests of the non-breaching party?

Specification of anything that must take place when the

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contract terminates (i.e. return of equipment, etc.)

Right to monitor and audit for contractual compliance

24 (preferably not less than once annually) and responsibility for
payments.

25 Authorization for Company and appropriate regulatory agencies

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 CEB Contract Review Guidelines version 09 Oct 2019

to have access to vendor records.

Due diligence requirements (i.e. frequency of review of vendor

26 relationship; document/information required to perform review;
right to vendor testing)

Business continuity and disaster preparedness requirements.

(i.e. continuation of services in event of operational failure;
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maintenance of disaster recovery and contingency plans; right
to test vendor plans and see results of vendor tests)

Member complaint and service issues (i.e. party responsible for

28 handling member complaints; reporting and performance
requirements)

Non-solicitation clause (For the term of the contract and not

29 more than 1 year after termination of the contract, parties agree
not to directly solicit other party’s employees.)

Applicable legal provisions: Affirmative

Force Majeure (Acts of nature or public enemy or governmental

or judicial restraints that are out of the control of either party
1 that would result in a delay in the performance contract for
which neither party would be liable. Should not include events
that could be mitigated by a business continuity plan.)

Entirety/Merger clause (Written contract and all incorporated

attachments contains all of the agreements between parties)
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recWriting: Has the entire agreement been put into written
form?

Modification rights (No modification except in writing signed by

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all parties)

Assignment provisions (Parties do not have right to assign their

rights and responsibilities without the other party's approval)

Assignment Clause: If the ministry wants the other party to

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specifically perform the contract, is there a provision stating that
the ministry must give its written permission before the other
party can engage someone else to fulfill its responsibilities?
(This is called an “assignment.”)

Enforceability/waiver clause (If party does not enforce its rights

under the contract at a particular time, this will not constitute a
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waiver of its right to enforce the terms and conditions of the
contract at any later date)

Independent contractor clause (describes legal relationship

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between parties)

Third party beneficiaries (Identifies any third party beneficiaries

7 and specific rights. Generally, contract is for sole benefit of
contracting parties.).

Notice clauses (Specifies manner in which notice should be

8 given under the contract, including person and address where
notice should be received)

Applicable state law (North Carolina should be designated for

9 performance, or applicable law; secondary choice is neutral law
of either NY or DE)

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 CEB Contract Review Guidelines version 09 Oct 2019

Venue and jurisdiction (Wake County, NC; secondary choice is

in the federal and state courts located in the county and state of
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the defending party’s headquarters; final option, federal and
state courts located in New York County, NY.)

Execution provisions (i.e. Contract may be executed in

counterparts; each counterpart deemed an original; all
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counterparts considered one/same agreement; electronic
copies [email only/no fax] deemed an original)

Language & Provisions to strike: Affirmative

Vague and/or indefinite terminology (e.g., party is supposed to

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do something "promptly" or no end date

Unreasonable limited liability clauses (proposed damage

limitation must be reasonable compared to the amount of loss
Company could experience if vendor fails to adequately
2 perform)

Limitation of Damages: Does the contract limit the type or

amount of damages the ministry can recover?

Binding mediation and/or arbitration clauses

Alternative Dispute Resolution Clause: If the contract requires

mediation or arbitration, is it clear that the parties can only
settle disputes in this way or does it require that alternative
dispute resolution be attempted before any dispute can be
heard in court?
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Arbitration Clause: If arbitration is required, are rules clearly
stated for selecting an arbiter from a reputable organization; for
example, the American Arbitration Association?

Choice of Law Clause: If another state’s law governs the

contract dispute, has the ministry considered the difficulties this
could create, such as finding an attorney licensed to practice in
that state?

4 Waiver of jury trial (NC law prohibits waiver.)

5 Change "warrant" or “represents” to "agrees"

Agreement for Company to purchase or provide liability

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insurance

Agreement for Company to enter into a partnership or agree to

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be the agent for another party, vice versa)

Statement of assumption of personal liability on the part of

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whoever signs the contract.

Exclusivity clauses (unless exclusivity is desired, then keep

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term short)

10 Liquidated damages clause

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