Show Me the Contract: Why Attorney Review of Vendor Contracts is So Important


Douglas P. Bickham, Esq., of Nordberg | DeNichilo, LLP


Oneofthe greatest andmostunder-utilizedbenefits community associations can receive from their legal counsel is the revision and/or preparation of vendor contracts. When associationclients go to theirattorneys withaproblem concerning their vendor, the attorney’s usual first response is “show me the contract.” Often, the contract was provided by the vendor and signed by the board without attorney review and consequently contains little to no legal protections for the association that could have prevented the problem or at least mitigated the potential impact on the association.


Association managers and board members need to keep in mind that a contract proposed by a vendor is not written for the association’s benefit. Vendor contracts are typically written by the vendor’s attorney (or sometimes just by the vendor)and,not surprisingly,favor thevendor. Vendor contracts are often incomplete, inconsistent, and lack any legal protections for the association.


Attorneys frequently receive a proposed vendor “contract” from their client that is nothing more than a bare proposal to do the work with no terms and conditions on how the work will be performed. Managers and board members need to keep in mind that a “proposal” is basically just a vendor price quote for a particular scope of work. It is not the same thing


20 July | August 2024


as a comprehensive contract containing all the details of how, when, and where the work will be performed and under what conditions.


Proposed vendor contracts are often reminiscent of the old commercial where the lady looks inside her hamburger bun and asks: “Where’s the beef?” They may look like a “contract” from the outside but there is no substance inside, at least not from the association’s perspective.


If we lived in a perfect world where nothing ever went wrong and disagreements never happened, then associations wouldn’t need to have a comprehensive written contract. Of course, that is not the world we live in. Things often do go wrongand disagreementsand even innocent misunderstandings do arise. That is why having a balanced, well-written contract is worth the cost of having an attorney prepare it for the association.


We were recently involved in a contract dispute between a client association and its vendor concerning a contract to perform fire inspection and testing. The “contract” (which had been provided by the vendor and signed by the board without legal review) consisted of just three pages with little more than a price and a sparse scope of work.


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