Covenant of Good faith and fair dealing
Our association has a contract that expired in March 2010, was never renewed, and the vendor continues to provide the service. I think the Board and the Mgmt Co. just didn’t notice the contract expired until it was brought it was brought to their attention. The Board indicated the following:
In some cases, a contract may have passed its expiration date, however all parties involved continue on with business as usual as if there was
no expiration date. As this continues, it becomes a case of established past practice which can be considered a good faith implied contract. This agreement
can continue until the parties involved determine otherwise.
It appears that the Association and this Vendor may have a good faith implied contract.
Does the Associatiin havea good faith
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Does the Association have a good faith implied contract if the contract expired back in 2010? Why not just update the contract?
Kathy,
Once a contract expires it expires and that is all. there is no residual implied contract from one that expired and is no longer valid. I will note that is the association is actually working on an expired contract they could be subject to litigation for spending association money without a contract and in a manner that was never approved and authorized by the board.
Dennis
Kathy,
While implied contract do exist in some situations, the contract for services rendered between a vendor and a contractor is never implied. it is either current or expired. If the contract is allowed to expire it is no longer valid. To imply anything otherwise would essentially render the expiration terms of the contract in valid.
Dennis