Administrative decision-making encompasses three levels on which increasing legal challenges and liability and their implications need to be considered. At the local level, this may involve violations of procedural due process. A second level concerns state laws and regulations. Line administrators, who frequently make decisions on programs, personnel, and operations, are insufficiently knowledgeable about state authority in these areas. The third level, related to federal policy issues, involves administrators at higher echelons. In the 1960's, when college administrators accepted federal support through the Constitutional Welfare Clause, they also accepted federal guidelines, regulations, and procedures. In the 1970's, the Interstate Commerce Clause has become more critical because it establishes federal authority in interstate trade. The Federal Trade Commission, which has jurisdiction over proprietary institutions, also deals with consumer protection and false advertising. Principles of consumer protectionism invite federal supervision and instructional administrators must understand concepts such as truth in advertising and that the college catalog is a contract. Also related to the Commerce Clause are limits of autonomy placed upon multi-state institutions, which should be considered by state boards of education and state legislatures. (RC)