There are many types of contracts for UC's international projects:
Grant Subcontract or Subaward
A grant or an award subcontract engages a subrecipient (third-party organization) to perform a portion of a sponsored project. UC may be the primary recipient overseeing the subrecipient, or UC may be a subrecipient on a grant issued to another organization.
This type of contract is often used by UC to delegate in-country management to an organization with local knowledge or infrastructure in that country. In some cases, overseas grantors may find it advantageous to award a grant to a local organization but make UC a subrecipient for those portions of the grant that require specialized knowledge.
A service agreement or consulting agreement is between UC and the other party (a business, university, non-profit, or individual) who, wherever located, agrees to provide a service in the foreign country in exchange for a fee, but does not assume responsibility for a project beyond the deliverables specified in the agreement.
Consulting agreement can also be on behalf of UC researcher in their personal capacity - UC APM 025 is critical for researchers considering consulting.
A collaboration agreement or memorandum of understanding (MOU) is typically an agreement between two parties who share administration of a program. Sometimes the MOU articulates a standard arrangement that may apply to many programs. The MOU clarifies the nature of the work, the expectations and obligations of the parties, ownership of the work product, and allocation of costs and liabilities.
Asking for Assistance
When negotiating international agreements, it is essential that you work with the applicable listed offices and with Technology Transfer offices. In the section Contract Provisions, common provisions specific to international agreements are discussed.
- UC Risk Managers are dedicated to facilitating UC research in support of UC’s mission.
- UC Campus Legal Teams and UCOP Office of General Counsel are available to UC staff and faculty to develop the legal framework to conduct international research.
- Your Campus Research Management Services provides expert administrative support to all researchers, from pre-award through the award process on all grant mechanisms.
- Each UC has a different name for their Contracts and Grants Offices. They provide negotiation, acceptance of awards/agreements on behalf of the Regents for projects funded by federal and state agencies, foundations and other public and private sources. These offices are also responsible for drafting, negotiating, and executing subawards for collaborative research.
Tempting as it may be, try to avoid repurposing domestic-focused contract templates for international activities as some of the terms might be a poor fit for foreign partners. Instead, tailor contracts carefully and assure that all parties clearly understand the language, concepts, and their respective obligations.
Governing law will determine enforceability of the contract provisions. Some jurisdictions have mandatory statutory provisions added to the contracts. Some don’t have legal concepts (like "termination at will”) that are analogous with those in the U.S. It is important to use local counsel who can provide guidance on business climate and contracting norms, and can also help with due diligence process on the local partner that you are considering.
If an agreement is written in two languages, specify that the English version will take the precedence. Some campuses will sign a non-English version for convenience only, but that should not be a controlling document. If a sponsor insists that a non-English version be signed, in addition to the English version, it is important to have it translated by a qualified translator and reviewed by local counsel. You should always consider the translation costs.
All payments due to UC should be payable in U.S. dollars. If this is not possible, specify a mechanism for calculating the exchange value and be cognizant of the risk to the project if rates fluctuate dramatically.
- Using courts or arbitration in dispute resolution will depend on how agreeable the partner is to jurisdiction by U.S. courts. With 156 state parties to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (a.k.a. the New York Arbitration Convention or the New York Convention), international arbitration has an enforceability advantage over court litigation; an international arbitration award is enforceable in most countries in the world. Other advantages of international arbitration include the ability to select a neutral forum to resolve disputes, and that arbitration awards are final and not ordinarily subject to appeal.
- Location of Arbitration and identity of arbitrator are subject to agreement by the parties.
Data Privacy Law
Unlike U.S. laws that tend to protect data only in certain industry sectors (FERPA for education and HIPAA for healthcare), foreign data privacy laws may apply broadly to all personal data generated or collected abroad. EU Data Privacy Law has strict data collection, processing, and use rules, and related template agreements. The European Commission has so far issued two sets of standard contractual clauses for transfers from data controllers to data controllers established outside the EU and one set for the transfer to processors established outside the EU. These model EU agreements for the transfer of personal data to third countries can be found here.
Data Access Requirements
It is important to understand all applicable data access requirements, address them directly in the contract, and analyze the cost of compliance.
While intellectual property laws across countries and regions share many similarities, important differences exist across jurisdictions. (For example: U.S. permits, in certain cases, patents on software, while EU is reluctant to do so; “grace-periods” for inventors to file patent applications vary across regions; research exemptions to patent infringement exist in some countries but not others.) Government sponsors may impose specific IP obligations (including restrictions on assignment of ownership) on grantees. For example, the research funding that UC receives from U.S. government agencies is subject to the Bayh-Dole Act with respect to resultant IP.
Beyond laws and sponsor conditions, institutions have their own policies regarding obligations or lack thereof, of employees to assign IP to their employing institution.
Working with international institutions requires greater understanding of local restrictions and expectations when negotiating IP terms. You should assess contracts on a case-by-case basis.
Certain countries participate in boycotts against Israel. U.S. antiboycott laws and regulations are designed to prohibit or penalize cooperation with international economic boycotts in which the U.S. does not participate. If you come across such language, your Contracts and Grants Officer should place the transaction on hold, insist on deletion of any boycott language, and promptly forward a copy of the language to the respective campus’ export control office for further evaluation.
Use of Name
California Education Code 92000 prohibits others from using the name “University of California”, campus names or abbreviations without express permission from an authorized representative at UC. Conversely, prior written permission for the use of the name of the other party is required.
Some journals require disclosure of funding source as a condition of publication. Acknowledge in publications that the project was supported by (Award #), (Sponsor Name).
Consult “Best Practice Guidelines on Publication Ethics” for the major ethical principles of academic publishing.
Although UC is tax-exempt in the U.S., it does not automatically receive this exemption from foreign countries. Confirm whether the contract will cause UC to be taxed in the foreign jurisdiction or if taxes will be withheld from payment to or from UC. Also consider whether UC employees working in a host country may be subject to local tax on a proportionate share of their income
Flow-down of Prime Sponsor Terms for Subawards:
Be aware that many prime sponsor terms, including terms from federal sponsors most often flow down to foreign subawardees. For example, foreign subcontracts under NIH grants must adhere to the public policy requirements in the NIH Grants Policy Statement. In addition, they must have assurances filed with NIH that cover the activities that relate to the project. These requirements must be part of the formal written subcontract agreement with the grantee and include:
- Human subjects
- Research misconduct
- Research involving vertebrate animals
- Inclusiveness in research design
- Non-delinquency for any federal debts
- Restrictions on lobbying
- Drug-free workplace
- Financial conflict of interest
- Debarment and suspension—applies to all subgrantees except foreign government or public international organizations.
Note that these federal “flowdown” obligations may be novel to foreign entities, and it is the prime grantee’s obligation to work with legal counsel to carefully draft a subaward agreement and to engage in subrecipient monitoring.
For more information, please see Subaward Management.
Useful Links for International Contract Negotiation
Harvard Business Review: “Getting to Si, Ja, Oui, Hai, and Da” by Erin Meyer: on building trust and expressing disagreement across cultures.
"These Diagrams Reveal How To Negotiate With People Around The World" by Gus Lubin - on communication patterns of different countries, based on the Richard D. Lewis study.
“How Different Cultures Understand Time” by Richard Lewis.
International Business Culture and Business Etiquette: a guide to 31 European countries.