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University Contracts - Do They Generate a Profit?


As someone who has provided legal support for many years to both the private sector and the Higher Education Sector, I have noticed two quite different approaches when formulating contracts.

When I first started working for a University, I remember looking at a Research Collaboration Contract and was concerned that the University did not appear to be making any money out of it!

Why would you enter into an agreement when there is no money in it?

Whilst universities are keen to generate a profit, they have other considerations that they are interested in such as rights to:

· publish the results of research or a collaboration;

· use the results for teaching and/or further research;

· ownership of or access to other intellectual property.

Universities are in the business of education and if they come up with ground-breaking results, they often want to tell the world.

Other differences between the HE Sector and private sector contracts (particularly research contracts)

1. Research is often funded by Government Departments and is governed by Conditions of Funding. Therefore, any Research Collaboration Agreement between two universities is likely to have to tie in with a set of Funding Terms.

2. Such funding is viewed as ‘public money’ which has an effect on universities’ attitude to risk. For example: i) they often want to limit their liability as much as they can in their contracts. Whilst this desire to limit liability is probably also true in the private sector, commercial companies may have more flexibility; and ii) universities’ commercial engagements should have an element of public benefit and their contracts should reflect such. There is likely to be, therefore, a reluctance to have restrictions imposed upon academic freedoms such as publication rights.

3. Whilst there will be commitments from each of the parties to carry out certain work, as agreements are often of a research nature, contracts will often expressly state that ‘results’ are not guaranteed.

Even though there are some common objectives, we at Claric, understand that the Higher Education and private sectors are different arenas.

Contact Richard Jenkins on 024 7698 0613 or for further advice or assistance.

This should not be relied upon for legal advice.

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