Adverse selection problems and moral hazard situations are commonly seen as organizational or behavioral limitations that impede institutions from attempting to reach the frontiers of their productive capacity. These agency costs are generated by informational asymmetries, high monitoring costs, and different preferences between the employer and employees. Universities have been criticized for such pathologies. This study explores explicit (hiring, promotion, and salary policies) and implicit (organizational climate) labor contracts across two public and two private universities in Argentina in order to evaluate whether or not they are, and if so, then to what degree, attentive to mitigating agency costs. It analyzes faculty handbooks and written material in each institution where faculty regimes are described. Interviews with key administrators and a faculty survey complement the data. The sample has been controlled according to the full or part-time status of academics, in order to see if the mitigation strategies for agency costs depend on the type of contract. A major conclusion drawn here shows us that sampled universities are attentive to adverse selection problems while the mitigation of moral hazard situations presents a variety of solutions, where economic rationale is not always present.