Occasionally, two municipal corporations in Ohio may decide to collaborate to manage or construct a facility. In this situation, both corporations need to draft a contract so that this agreement is legally binding.
According to the Ohio Revised Code, municipal contracts need approval from city officials. If officials think that the agreement needs more clarity, they ask both corporations to revise the document. There are several elements that municipal corporations need to consider as they draft this agreement.
What will the collaboration look like?
As members of these corporations draft their agreement, they need to give careful consideration to all the terms. The agreement has to explain how they will collaborate on the project. Which aspects of construction will each corporation handle? How will they split the management duties? City officials use the answers to these questions to determine that the partnership is a fair one.
Additionally, people need to include a financial estimate for the project if they want it to be valid. This breakdown should include the following elements:
- The price of each aspect of construction.
- The estimated cost to maintain the building each year.
- The amount that each corporation will contribute to the project.
Both municipal corporations should work together closely to develop the contract. This ensures that everyone is in agreement about what this partnership will look like.
Is the contract fair?
As people draft this agreement, they should make sure that the contract will be enforceable. According to FindLaw, Ohio courts may not enforce the contract if they think that the agreement is not fair to both corporations. Does one corporation have more say in the management of the building? Is one of them paying more than their fair share of the construction costs? If a court sees either of these elements in the contract, they may say that the document is unconscionable and refuse to enforce it.
Once corporations work out all these details, they can proceed with their collaboration.