A member of a nonprofit association is not liable for a contractual obligation of the association unless one of the following conditions is satisfied:

(a) The member expressly assumes personal responsibility for the obligation in a signed writing that specifically identifies the obligation assumed.

Terms Used In California Corporations Code 18610

  • Contract: A legal written agreement that becomes binding when signed.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.

(b) The member expressly authorizes or ratifies the specific contract, as evidenced by a writing. This subdivision does not apply if the member authorizes or ratifies a contract solely in the member’s capacity as a director, officer, or agent of the association.

(c) With notice of the contract, the member receives a benefit under the contract. Liability under this subdivision is limited to the value of the benefit received.

(d) The member executes the contract without disclosing that the member is acting on behalf of the association.

(e) The member executes the contract without authority to execute the contract.

(Added by Stats. 2004, Ch. 178, Sec. 11. Effective January 1, 2005.)

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