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

Current through all regulations passed and filed through July 1, 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.