By: Sharon Glenn Pratt
A contract is a promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.
OFFER + ACCEPTANCE + CONSIDERATION
WRITTEN OR UNWRITTEN – Discussion, Invoice, “Proposal,” Plans, can all be binding contracts
HOA’s use contracts for variety of things:
- Hiring Personnel
BOARD has duty to negotiate contract that is in the best interest of HOA and adequately protects HOA.
BOARD has certain limits on contracting authority in by-laws, such as length and dollar amounts, multiple bids.
Don’t just sign off on contractor’s proposal, it wasn’t written with protection of HOA in mind.
SUBJECT MATTER –
should be clearly spelled out
specs, if necessary
spelled out, can also include maintenance and disincentives, penalties,
specified or specified formula (like time and materials with hourly price for time), “not to exceed,” requirement for written change orders
PROPER PARTIES –
HOA’s official legal name, not managers or President
terms for getting out as important as getting in
particulars, proof of insurance, A.I. endorsements
INDEMNITY CLAUSES –
hold harmless or indemnify for certain things
ADR OR NOT –
RECITALS AND DEFINITIONS –
background context, intent and purpose
ATTORNEYS FEES –
to prevailing party
|BEFORE FINALIZING CONTRACT:||DURING:||AFTER:|
|owners’ buy in? licensed contractor? permits pulled? compliance with codes? references? due diligence?||follow-up on provisions re insurance purchase payment hold backs||save contract save insurance info|