Monday, December 7, 2009

Read the fine print

The New York Court of Appeals (the state's highest court) just issued a decision finding that a CBA-like agreement could not be enforced against the project's owner because, by its terms, the agreement had expired. (The lower court opinion is available here.)

The contract expressed quite clearly that it would expire after 10 years, but the corporation that was formed to implement the agreement challenged it anyway. One of the corporation's arguments was that it couldn't have intended such a short duration because the project couldn't have been completed within 10 years. The court didn't buy this, admonishing the corporation that it could have written a longer term into the agreement had it so desired.

While this case doesn't say anything about the general validity of CBAs, it does underscore the importance of paying attention to durational terms and other contract details. Most CBAs specify a term of 30 to 40 years, although the Gateway Center CBA has a duration of less than 10 years and the SugarHouse CBA will remain in effect indefinitely.

No comments: