Draft Association-Favorable Contract Termination Clause
Unfortunately, as community association managers know all too well, sometimes the contractors your association hires for such jobs as snow plowing, painting, or providing security don’t perform up to the standards you expect. Your association doesn’t want to be in a position in which it’s unable to terminate the contract of an underperforming service contractor when it wants. But if you just sign the boilerplate contract that a service contractor submits without making changes, the association is likely to end up in precisely this fix. Even reputable contractors include restrictions in the fine print that make it hard for customers to end their contract.
Contractors will do their best to make you believe that the contract is a take-it or leave-it proposition, but you don’t have to accept a contract without negotiating it. Remember that everything is negotiable, even if you don’t have a lot of leverage. If it isn’t negotiable, look for another contractor. If you must accept an automatic renewal, be sure you mark in your diary when you must give notice that you want to end the contract.
For four steps you should incorporate into the strategy you’ll use when contractors ask you to sign contracts that limit your termination rights, and a model termination clause you can adapt, see “Use Four-Step Strategy to Preserve Contract Termination Rights,” available to subscribers here.