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Legal problems that colleges and universities might avoid are identified. Colleges are being sued over a broad range of legal issues and are expending money for legal and court fees, settlements, and judgments. Legal problems include right of admission to particular colleges, the right to stay in school, questions of faculty promotion and tenure, and questions of tort liability. School business officers need to inform the college president about matters that might create legal problems and adverse fiscal effects on the institution. The institution might be able to settle at less expense out of court. The best way to avoid employment-related legal problems is to have policies stated in writing and to insure that the institution follows its written policy. Courts require that there be due process, which sometimes varies depending on whether the institution is public, private, or church-affiliated. Business officers should understand the legal elements of a contract and should know when to seek legal advice. In addition, the contract should not present conflicts of interest. Additional concerns are: to make certain that bequests are valid and that the institution is not placed in legal jeopardy; to provide adequate security on campus; and to take action against fraud and dishonesty committed by faculty and school employees. (SW)