Education institutions worldwide have and continue to seek opportunities to spread their offerings abroad. While the provision of courses to students located overseas through partner institutions has many advantages, it raises questions about quality control that are not as applicable to other forms of international education. This paper uses a transaction cost approach to analyse quality control issues. Australian University Quality Agency reports supply the data. The paper concludes that there is a risk of opportunism and bounded rationality in license arrangements, thus universities need to monitor the contracts and their implementation very carefully. Specifically, systems are required to ensure equivalence of entry, teaching and assessment standards, the financial viability of the partners and the accuracy of their marketing material. (Contains 1 note.)