APPROVING AND SIGNING CONTRACTS

Contracts should not be signed until they have been reviewed by legal counsel and approved by the board. Review and approval may be done in executive session.

Binding on Association. If an officer, such as the president, approves a contract without prior authorization by the board, the association may still be bound by the unauthorized agreement. Corp. Code §7214

Unauthorized Contracts. If liability is created because of the unauthorized actions of a fellow director, the board may need to take one or more of the following actions: (i) remove that director from his/her office as an officer, (ii) censure the director, (iii) have the membership vote to remove the director from the board, and/or (iv) take legal action against the director for damages. Before taking action, the board should seek legal counsel.

Contact us if you do not have legal counsel and need contracts prepared or reviewed.

Updated by ADAMS KESSLER 10/1/2008