Subscriber Login
Join Now!
The subscriber’s version of the memorandum is much more detailed than the basic version, offering significantly more information each issue. You’ll have full access to recent back-issues and detailed memorandums on numerous tax and legal topics of vital importance to nonprofit organizations and churches. Click here to sign-up!
Nonprofit Board May Be Sued Personally For Fraud under Contract
Nonprofit and Church Legal Trends - Free Edition - November December 2008 (free edition)
A federal District Court in Arizona has refused to dismiss a complaint against the Chair of the Board of the nonprofit Frank Lloyd Wright Foundation for alleged intentional misrepresentation of the Foundation’s intent to pay a contractor.
Application: Directors are very seldom found personally liable for their work on behalf of a nonprofit, especially in connection with what are primarily contractual claims. But nonprofit directors must be aware that they are liable for their personal misconduct. The allegation of intentional misconduct, even in connection with contractual disputes, may be sufficient to preclude dismissal of the complaint and application of volunteer protection laws. Thus, the allegations will be decided by fact finders costing the board members at least substantial legal fees to defend and then personal judgments if they lose.
| < Prev | Next > |
|---|