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A contract or an agreement involves a promise, or set of promises, for which the performance is recognized as a legal obligation. The contract contains a statement of work or a description of the services provided and has more specificity than a grant. It should be drafted with great care, for failure by the University or contractor to deliver the results anticipated, or to perform what is defined in the statement of work, is a breach of contract.
A U-M researcher can propose research activity with external sponsors/collaborators, but they do not have the authority to negotiate and approve the legal aspects of any research agreement on behalf of U-M.
Also, see signature authority and cooperative agreement.