Reading The Fine Print: The Importance of Vetting Contracts Before Signing
Anyone who has ever taken part in a business transaction with any type of company or corporation has more than likely been faced with a contract of some sort. Most people know and understand the importance of reading a contract prior to "signing on the dotted line;" however, there are still individuals who will do a quick or cursory reading of a contract and disregard what we commonly refer to as the "fine print." Reading a contract from the first line all the way through to the very end is crucial, and it is especially important for condo board members and managers who often deal with pages and pages of contracts that concern issues that are of great importance to those who have an interest in the condo community.
Board members and managers routinely consider and enter into contracts with vendors or individuals who provide services to the community, such as landscapers, maintenance workers and repairmen. That said, it should come as no surprise that many of the individuals who review those contracts have become so accustomed to some of the standardized wording of the documents that they simply do not read them as closely as they should. But failing to read a contract thoroughly can lead to mistakes that might ultimately lead to costly litigation.
Things to Keep in Mind When Reviewing Contracts
Depending on the relationship of the parties, some contracts might appear to be less formal than contracts of the past. For example, the contract might not include the full proper name of the business or individual parties, and that could potentially lead to confusion in the future. In order to avoid conflicts or issues that may arise during the length of the contract, the full name of the individuals and/or businesses should be properly noted.
Additionally, there may be occasions when certain items are left blank within the contract; however, it is typically not a good idea to leave any empty blanks or spaces on a contract. Doing so could result in someone else filling in those blanks without a party's knowledge, which could lead to major surprises that may or may not reflect the true wishes of the parties.
Watch Out for Auto-Renewals
With so many boards and managers searching for ways to cut costs while still being able to retain the services that are necessary for the upkeep of their communities, companies and individuals who offer services have started to offer rock-bottom pricing in an effort to build up their own businesses. But in order to do that, they sometimes throw in unfavorable terms in contracts that some board members and managers may miss, particularly if they have had long-running relationships with certain vendors.
For instance, some contracts might include "evergreen" clauses, which are clauses that allow for the contract to renew automatically at the expiration of the stated term, unless the parties advise each other of their plans not to renew. This can be problematic, as it will be very important for the affected party to remember to cancel the contract in the appropriate amount of time as specified by the contract.
Given the importance of contracts in business, managers and board members should consider working with skilled attorneys who know how to properly vet and draft contracts in order to ensure that the terms are appropriate with no hidden surprises. Associations should be strongly discouraged from ever signing contractor's proposals. If you are a board member or manager of a condo or some other property, and you have questions or concerns about your contracts, contact Griffin Alexander, P.C. today.