Read More »" /> The Devil is in the Details. Randal Pentiuk; Pentiuk; Couvreur & Kobiljak P.C. | National Cooperative Law Center - Part 5

The Devil is in the Details

Rule #7: Read the fine print of the vendor’s form contract. If you are not preparing the contract but instead signing the vendor’s form, take the time to have it reviewed. You may find that it is extremely unsatisfactory. For instance, if there is a dispute, you may find yourself in an out of state court. You may find an attempt to alter the statute of limitations, curtailing your rights to bring suit. Performance guarantees may be limited or essentially eliminated.

Knowing this going into the deal is important. You may wish to attempt to negotiate these and other onerous or one-sided terms out of the contract. Alternatively, you may want to use the standard “wrap around” agreement form discussed in Rule #2, or draft your own contract. In any event; as obvious as it sounds, reading the fine print is essential before you sign on with a vendor.

Many experienced attorneys can help the Board evaluate whether it should engage a vendor who presents such a contract form. For example, the Cooperative Attorney may have dealt with the vendor in other deals and can advise you of whether the pricing is reasonable. Similarly, the Cooperative Attorney may be able to check litigation histories.

As noted above, this list is just a beginning. Professionals should guide the Board to minimize risk to the Cooperative. The stakes can be rather high in even the smallest and apparently routine matters. We have seen major lawsuits over mistakes in contracting with vendors, costing literally hundreds of thousands of dollars in legal fees to fight it out in court. So the wise Board will not play Russian Roulet with the Cooperative bank account. When in doubt, err on the side of spending a little extra time, energy and money to do things right.

 

For more details please feel free to contact an attorney familiar with cooperative housing law.

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