Billy Gillispie, like many college basketball coaches, was hired--and fired--in a hurry. But the contract negotiations that dragged on for nearly two years while he coached the University of Kentucky's men's basketball team showed little of the same urgency that defined his entrance and exit. Mr. Gillispie worked for Kentucky under a memorandum of understanding, a legal document that he says served as his employment contract. But when the university fired him in late March, the murky details of the agreement left the university in a precarious position. Mr. Gillispie sued in federal court late last month, claiming Kentucky owes him $6-million. The university has countersued, claiming the agreement was not valid. The risky combination of big money and hastily written employment agreements can pose a major problem for colleges. In the intoxicating whirlwind of nabbing a name-brand coach, many of the safeguards used in high-level hirings elsewhere on the campus are often shelved. While it's no fun to talk about divorce during the honeymoon, an exit strategy that is acceptable to both the coach and the university must be put in writing, experts say. Universities that fail to spell out the specific conditions of a coach's employment and termination run the risk of costly and uncomfortably public contract disputes if the relationship sours. In many cases, a memorandum of understanding, or an MOU, is all there is. But the casual documents--"an agreement to agree," as Kentucky dubbed Mr. Gillispie's MOU in its lawsuit against him--should ideally serve as only a placeholder. "MOU's are great when everything is going well," says Michael S. Garrison, a former president of West Virginia University, who helped the university win a $4-million legal battle with a former head football coach, Rich Rodriguez, last year. However, Mr. Garrison says, a contract is needed "when the marriage goes bad."