MTSU, as a state-funded public institution of higher learning, is subject to certain limitations and restrictions and only has such authority as is granted to it under the Constitution and laws of the State of Tennessee. There are certain contract provisions that MTSU is prohibited from accepting due to the University's position as a public Tennessee institution.

Examples of Impermissible Provisions (this is not an exhaustive list)

• Provisions requiring the University to pay taxes that we are exempt from paying under Tennessee law (T.C.A. §§ 67-5-203 and 67-6-322). The University is exempt from both federal excise and Tennessee state sales taxes.
• Provisions requiring the University to pay cancellation fees, liquidated damages, incidental or consequential damages, or punitive or exemplary damages. University is liable for actual damages only (T.C.A. § 9-8-307).
• Provisions requiring the University to pay late charges, finance charges, or interest in excess of that provided under the Tennessee Prompt Pay Act (T.C.A. § 12-4-701 et seq.).
• Provisions requiring the University to pay punitive damages, attorney fees, collection costs, or costs of litigation (T.C.A. § 9-8-101 et seq.).
• Provisions requiring the University to agree to assume the risk of liability which might otherwise fall on other parties are void as both an unauthorized attempt to abrogate sovereign immunity and an unauthorized attempt to lend the State’s credit (Tenn. Const. I, § 17; Tenn. Const. art. II, § 31).
• Provisions requiring the University to insure, guarantee, or indemnify or hold harmless the Vendor or any party from claims which may arise out of the Agreement or be brought by third parties (OAG 93-1, OAG No. 99-095, OAG 04-065).
• Provisions requiring the University to purchase or obtain liability, property, or other insurance or a performance bond. The State of Tennessee self-insures its exposures in general liability, automobile liability, professional malpractice, and workers' compensation. The State's self-insurance program insures all liability created under Title 9, Chapter 8 of the Tennessee Code Annotated, for all State departments, agencies, and institutions, including State institutions of higher education.
• Provisions designating the governing law of a state other than Tennessee. As an instrumentality of the State of Tennessee, the University has sovereign immunity under Article I, Section 17 of the Tennessee Constitution and the Eleventh Amendment to the Constitution of the United States.
• Provisions designating the Venue for any claim brought against the University other than the Tennessee Claims Commission.
• Provisions requiring the University to make deposits or payments before goods are received or services are performed (T.C.A. § 12-4-703), except that the University may pay for licensing, preventive maintenance/service, subscriptions, memberships, and in other instances only if approved in accordance with University policies, upon the signing of an agreement.
• Provisions requiring confidentiality and nondisclosure that violate the Tennessee Open Records Act (T.C.A. § 10-7-101, et seq.). Except as otherwise provided by statute, all State records are public records and open to inspection by any citizen of this State (T.C.A. § 10-7-503).
• Provisions providing for a limitation of time in which the University may bring suit (T.C.A. § 28-1-113).
• Provisions limiting the Vendor’s maximum liability to an amount less than what is permitted pursuant to Tennessee law (T.C.A. §§ 12-3-701 and 12-3-1210).
• Provisions disclaiming express or implied warranties to an extent impermissible under Tennessee law.
• Provisions allowing a party to make unilateral changes to the terms of any document incorporated into the Agreement.
• Provisions requiring the University to consent to binding arbitration by a third party for claims arising out of or relating to the Agreement. Only the Tennessee Attorney General can enter into a settlement agreement that is binding upon the State of Tennessee (T.C.A. §§ 8-6-301 and 20-13-103).
• Provisions requiring the University to enter into mandatory mediation with the Vendor or third parties for any claims arising out of or relating to this Agreement. Mediation might be acceptable to the University but the details of the mediation must be negotiated between the parties.
• Provisions permitting the Vendor to take a secured interest in personal property under the Agreement.
• Provisions requiring the University to execute/deliver any security interest related documents.
• Provisions permitting the Vendor to pursue equitable remedies against the University. T.C.A. § 9-8-307 allows only monetary claims against the State of Tennessee.
• Provisions providing for the payment of travel/per diem expenses in excess of maximum limitations set forth in the Tennessee State Comprehensive Travel Regulations, Tennessee State Statutes, or University policy.
• Provisions requiring the University to obtain or pay for outside labor of persons not employed by the University (e.g., union stage-hands, teamsters) are prohibited unless such cost is included as part of the total contract price.
• Provisions passing risk of loss or title to the University before delivery and/or installation of products unless the Vendor provides shipment protection in the University's interest.
• Provisions granting the Vendor the right to enter the University's premises without notice to remove equipment or products upon alleged breach or default by University.
• Provisions permitting State of Tennessee funds to purchase alcoholic beverages. State of Tennessee funds are not to be used for the purchase of alcoholic beverages.
• Provisions requiring the University to be responsible for the acts of other individuals or entities whom the University is not responsible for under Tennessee law including, but not limited to, its students, guests, invitees, suppliers, contractors, agents, or representatives. The University is solely responsible for itself and its employees.
• Provisions allowing binding settlements against the University without the consent of the University’s Office of the University Counsel and the Tennessee Attorney General.
• Provisions stating that a remedy is the sole/exclusive remedy for the University. The University does not have the contracting authority to agree to an exclusive remedy on behalf of the State of Tennessee.