Ohio Administrative Code
Title 109 - Attorney General
Chapter 109-3 - Contracts for the Provision of Services Benefiting Individuals or the Public
Section 109-3-03 - Remedies in the event of a breach of contract
Universal Citation: OH Admin Code 109-3-03
Current through all regulations passed and filed through September 16, 2024
(A) In the event of a breach of a contract entered into pursuant to section 9.231 of the Revised Code, a governmental entity shall have remedies including but not limited to the following:
(1) A governmental
entity may bring a civil action for the recovery of money due to the
governmental entity from a recipient under division (A) of section
9.236 of the Revised Code. In
such an action, any person with which the recipient has contracted for the
performance of the recipient's material obligations to a group of beneficiaries
under the recipient's contract with the governmental entity may be made a party
defendant if the person is unable to demonstrate to the satisfaction of the
governmental entity that the person has materially complied with the terms of
the contract with the recipient. In such a case, the person may be made a party
defendant and the governmental entity may obtain a judgment against the person
in accordance with division (B)(2) of section
9.236 of the Revised
Code.
(2) If a governmental entity
obtains a judgment against a recipient in a civil action brought under division
(B)(1) of section 9.236 of the Revised Code and
the judgment is uncollectible, the governmental entity may recover from the
person with which the recipient contracted an amount not exceeding the lesser
of the following:
(a) The unsatisfied amount
of the judgment;
(b) The total
amount received by the person from the recipient minus the total amount spent
by the person on direct costs for services actually performed and retained by
the person as allocable non direct costs, associated with those direct costs,
as those terms are defined in section
9.231 of the Revised
Code.
(3) If a
governmental entity, pursuant to section
9.236 of the Revised Code,
obtains a judgment against a recipient or against a person with which the
recipient contracted and that judgment debtor does not voluntarily pay the
amount of the judgment, that judgment debtor shall be precluded from
contracting with a governmental entity to the extent provided in divisions (A)
and (B) of section 9.24 of the Revised Code for a
debtor against whom a finding for recovery has been issued.
(4) In addition to other remedies provided in
divisions (A) to (C) of section
9.236 of the Revised Code and
paragraph (A)(1) to (A)(3) of this rule, a governmental entity may void a
contract between a recipient and another person for the performance by the
other person of the recipient's obligations under the recipient's contract with
the governmental entity to the extent that the other person has not yet
performed its obligations under the contract or cannot demonstrate that the
money it received was expended on direct costs or retained as allocable non
direct costs.
(5) If a recipient is
liable to repay money to a governmental entity under section
9.236 of the Revised Code and
the judgment obtained by the governmental entity against the recipient is
uncollectible, then in addition to other remedies provided in divisions (A) to
(C) of section 9.236 of the Revised Code, and
after the governmental entity has obtained a judgment against any necessary
third party, the governmental agency may void any of the following contracts:
(a) A contract made not more than one hundred
eighty days before the judgment against the recipient became uncollectible
between the recipient and a director, trustee, or officer of the recipient or a
business in which a director, trustee, or officer of the recipient has a
material financial interest, if either of the following applies:
(i) The recipient has paid substantial value
for the property received and the property can be returned to the other person.
If the property has experienced only normal wear and tear, the person shall be
liable to the governmental entity for the full amount the recipient paid for
the property. Otherwise, the person shall be liable to the governmental entity
only for the market value of the property.
(ii) The person with whom the recipient
contracted has received money that the recipient obtained pursuant to the
contract with the governmental entity and the money was not expended on direct
costs or retained as allocable non direct costs. In such a case, the
governmental entity may void the contract to the extent the money was not
expended on direct costs or retained as allocable non direct costs, and the
person shall be liable to the governmental entity for that amount.
(b) A contract made not more than
one hundred eighty days before the judgment against the recipient became
uncollectible between the recipient and an employee of the recipient or a
business in which an employee of the recipient has a material financial
interest, if the employee has direct knowledge of the use of the money that the
recipient obtained pursuant to the contract with the governmental entity and
either division (E)(1)(a) or (E)(1)(b) of section
9.236 of the Revised Code
applies;
(c) A contract is entered
into between the recipient and another person pursuant to which the recipient
has paid or agreed to pay money to the other person to the extent that the
other person has not yet performed its obligations under the
contract;
(d) A contract made not
more than one year before the judgment against the recipient became
uncollectible between the recipient and a person other than the governmental
entity if the other person has not given or agreed to give consideration of
reasonable and substantial value for the consideration given by the
recipient.
Effective: 1/19/2017
Five Year
Review (FYR) Dates: 11/01/2016 and
01/06/2022
Promulgated
Under: 119.03
Statutory
Authority: 9.237
Rule
Amplifies: 9.23,
9.231,
9.232,
9.233,
9.234,
9.235,
9.236,
9.237,
9.241
Prior
Effective Dates: 01/13/2006
Disclaimer: These regulations may not be the most recent version. Ohio may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
