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William B. Esq.
William B. Esq., Attorney
Category: Legal
Satisfied Customers: 3237
Experience:  Civil litigation attorney for individuals and businesses.
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I was a subcontractor for an HOA in colorado. The contract

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I was a subcontractor for an HOA in colorado. The contract was for three years. The year I was awarded the contract the mother of the previous contractor got on the board, then the father became apart of the ECC committee. For three years I plowed snow and maintained the road with little complaint. This year the contract came up for renewal. The RFP was for three years, and I was the low bidder. The board was divided. A compromise was agreed upon by the board members that I would be offered a one year contract. I gave them a new proposal, but later I decided to retract the one year proposal and told them I would wait the one year for the new RFP that they said they would work on over the course of the one year contract. I received word tonight that they have awarded a three year contract to the board members son. My question is do I have any recourse? Can the board offer me a one year contract to bid on, and then when I turn down the one year contract (that was 3 years in the original RFP and bid) offer the previous 3 year contract to the other bidder who is the son of one of the one of the board members? Can they legally offer different contracts and parameters to different bidders and in essence steering the board members son into place, and effectively taking away an equal opportunity to bid on the same contract?
Submitted: 1 year ago.
Category: Legal
Expert:  William B. Esq. replied 1 year ago.

William B. Esq. :

Dear Customer, thank you for choosing Just Answer. My name is XXXXX XXXXX I would like to assist you today.

William B. Esq. :

I am very sorry to learn of this situation, and I must tell you up front that you are most likely not going to have any recourse in this matter. I will run through the contract law below, but I want to be clear upfront. If, as I go through this, you think there are any facts or issues that would change this analysis, please let me know, and I will certainly address that as well (and it may give a different outcome.

Customer:

Hi Bill

William B. Esq. :

Good evening.

Customer:

ok

William B. Esq. :

The first issue you have is that this is a private entity. Unlike a public agency or group where there is a requirement that they provide equal opportunity for contractors or service providers, a private entity can send out bids, retract bids, and basically hire whoever they wish. The only limitations they have is based on those set by the internal standards within the entity (it appears the HOA board went around this when it installed 2 family members on the governing bodies).

William B. Esq. :

The next issue is that you had a contract awarded to you, you then responded to that with a counter-offer that you would wait (I am not judging this, it is likely a perfectly reasonable position, I just am stating it for purposes of clarity). Under contract law, when a party receives an offer, and provides a counter, it is rejecting that offer, it is no longer on the table. So that opportunity was lost (it may not have been much of an opportunity in the first place).

William B. Esq. :

The fact that they did an end run and gave the 3 year to the son after they had the votes in place was a matter for the governance of the HOA. If the HOA body is upset about it, they can act to reverse this, but it is difficult to do and takes a majority vote by a majority of the members (it differs from one HOA to the next, but this type of thing is incredibly difficult to do and usually it is easier to simply recall one board member - such as one of these parents - and install an impartial board member, but even then you are still dealing with the fact that the son has a contract).

Customer:

The board directed me to add an amount for the change in terms.

William B. Esq. :

For the one year contract?

William B. Esq. :

You gave a bid, they instructed you to change terms, and you decided that you would wait, or did you change terms?

Customer:

For the one year contract, they instructed me to make change to my three year bid, so I change the price and gave it to them. Then after research I figured a one year contract would leave my company to exposed to excessive snow fall or equipment repairs.

William B. Esq. :

Was there ever an agreement between you and the HOA as to the price? (Even if it was one where they said if you agree to do it for xx we will give you a 1 year contract, and you returned a bid for xx ?)

Customer:

no

Customer:

well they orginally said will you agree to a one year contract at the price of the first year of the three year contract

William B. Esq. :

Okay, so there would not be a contract for 1 year, and it appears that the HOA used the delays in negotiations to take in new bids which they used the re-organized governance to award the bid through nepotism. Unfortunately, the board has great discretion here through what is called the "business judgment rule" which allows boards to resolve business decisions "in their best judgment" and absent extraordinarily bad decisions, they can do pretty much as they please to conduct the HOA's business.


Does that sound about right, or am I missing something in your case (I know I only have a very limited view given this forum, but these are the general rules that apply to governance and business decisions for HOAs, plus contract law for service providers).

William B. Esq. :

Did the HOA promise you anything or enter into any contract (The HOA will pay you to do this, and you agreed to do that for any period of time - it has to be very specific, or a "meeting of the minds")

Customer:

It was a phone call the ask will you take a one year contract so I guess no

William B. Esq. :

Without a contract you are unprotected. (A phone call would work, but it needs to contain the "material terms" which would need to contain at least an idea of the compensation involved and the scope of your work - it may be understood to some extent, but you would have to at least have a dollar amount to make any real headway with a contract complaint - assuming you agreed to the one year deal at the time).

Customer:

I never agreed to the one year until the board told me to adjust the price to compansate for one year

William B. Esq. :

Was there ever an agreement as to the price you came up with?

William B. Esq. :

(You may have already answered that)

Customer:

no

William B. Esq. :

In that case, I believe you are left without a contract. Unfortunately that means you do not have a legal claim in this situation. (Do you have any other relationship to this HOA besides being a service contractor?)

Customer:

I live in the subdivision

William B. Esq. :

Are you singled out for any reason other than losing this particular contract?

Customer:

no

William B. Esq. :

Unfortunately (just from what we have discussed here) I do not see a viable claim regarding this issue. This does not mean that there is not some other issue that may arise if you speak with a local attorney who could review all of the facts, but I just don't see anything through this chat forum that would lead to a cause of action.

Customer:

ok thanks for the advice

William B. Esq., Attorney
Category: Legal
Satisfied Customers: 3237
Experience: Civil litigation attorney for individuals and businesses.
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