What, if any, liability does a trustee assume for the actions of a board of trustees?

I am on the board of trustees of a private school that is signing a long-term lease. If the school in the future cannot meet the terms of the lease, what liability do I have? The school says it has directors and Officers Insurance.

Asked on September 7, 2011 under Business Law, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If you are on the board of trustees as to a private school and you approve a lease on behalf of the shcool (which I presume is a registered tax exempt organization under Internal Revenue Service guidelines, regulations and rules) you would have no personal liability for the lease assuming you sign the lease or approved it as a trustee for the school and not personally as an individual.

Hopefully the school has independent legal counsel assisting it and its board of trustees concerning any and all questions that may arise as well as safeguarding their interests.

The school's director's and officer's insurance policy supposedly in place will protect you as to any claims of negligence as a trustee for the school but will not insulate you from any claims for breach of the contract for the long term lease you have written about. This is why the person signing the lease for the school signs on behalf of the school and not individually.


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