[Lnc-business] Clarification Regarding the Role of Counsel in Approval of Contracts

[Oliver Hall]

Dear LNC:

Section 2.04(3) of the Policy Manual provides that contracts greater 
than one year in duration or involving more than $25,000 "shall be 
reviewed and approved" by the LNC's counsel.

I think that is a sound policy. Review and approval of contracts is one 
of the primary reasons for the LNC to retain counsel. Accordingly, I 
frequently review contracts and request changes to reduce the LNC's 
liability and protect its interests prior to approving the contracts.

With respect to the Rosen Shingle Creek contract, I identified several 
provisions that concerned me because of the potential liability they 
placed on the LNC -- most important, the Liquidated Damages clause. 
During the course of the LNC's discussion of that contract, I indicated 
that I do not think it is counsel's role to withhold approval of a 
contract on the ground that it is unwise, but only to advise the LNC of 
the legal issues and risks involved, so that members can make a fully 
informed decision.

As it happened, I never had to decide whether to approve a contract that 
I considered to be inherently risky and to impose an unacceptable level 
of liability on the LNC, because the terms of the final contract 
addressed my concerns. The Liquidated Damages clause, for example, was 
deleted, among other changes. I therefore approved that contract.

It is and always has been my view that the LNC should continue to rely 
on counsel for review and approval of contracts in accordance with 
Section 2.04(3) of the Policy Manual.

Thank you,

Oliver