Avoiding Common Pitf ...

Avoiding Common Pitfalls when Contracting with Public Boards in Mississippi

June 6, 2023 | by Sam Gregory

In addition to generally applicable contract law principles, special care should be taken when contracting with public boards in Mississippi.  Otherwise, you may find yourself with a contract that is unenforceable or exposes you to more liability than anticipated.  This article addresses (1) the ability to bind future boards, (2) the “minutes rule,” and (3) whether statutes of limitations or statutes of repose apply to political subdivisions of the State.

A. Ability to bind future boards

 “[T]here is a long-standing rule in Mississippi that predecessor boards generally cannot bind a successor board.”  Broadband Voice, LLC v. Jefferson Cnty., 348 So. 3d 305, 308 (Miss. 2022).  Thus, long-term contracts that could extend into the terms of future boards are subject to being cut short.  That is not to suggest that you cannot or should not enter into long-term contracts with public boards, but this issue should be carefully evaluated when doing so.

B. The “Minutes Rule”

Under the “minutes rule” or “minutes requirement,” contracts with public boards must be evidenced through the board’s minutes.  “‘[T]he entire contract need not be placed on the minutes,’ [b]ut ‘enough of the terms and conditions of the contract [must be] contained in the minutes for determination of the liabilities and obligations of the contracting parties without the necessity of resorting to other evidence.’” Jackson Cnty. v. KPMG, LLP, 278 So. 3d 1124 (¶ 11) (Miss. 2019) (quoting Wellness, Inc. v. Pearl River County Hosp., 178 So. 3d 1287, 1291 (Miss. 2015)).  Recent opinions have placed the burden on private parties to ensure that their contracts are properly recorded in board minutes.  See Lefoldt for Natchez Regional Medical Center Liquidation Trust v. Horne, L.L.P., 853 F.3d 804, 822 (5th Cir. 2017), as revised, (Apr. 12, 2017); Dukes v. City of Lumberton, 2019 WL 1522225, *2 (S.D. Miss. 2019).

Importantly, the “minutes rule” must be satisfied as to each public board involved. See Singing River MOB, LLC v. Jackson Cnty., 342 So. 3d 140 (Miss. 2021) (although County Board attached lease to its minutes, it was not spread upon the minutes of the Singing River Health System Board).  Moreover, if the prime contract does not satisfy the “minutes rule,” downstream contracts will be invalid as well.  Id.  Thus, if you contract with a public board, or if you are a subcontractor or supplier for a project involving a public board, it is imperative that you ensure the contract (or enough of the contract) is spread upon the minutes.

C. Statutes of Limitations and Repose May Not Apply to State Entities

Lastly, if you are satisfied that a contract does not run afoul of the prohibition of binding future boards and that it complies with the minutes rule, it is still important to be mindful that the statute of limitations does not run against the State of Mississippi or its political subdivisions.  See Miss. Const. Art. 4, § 104; Miss. Code. Ann. § 15-1-51. 

Further, although no Mississippi appellate court has addressed the issue, at least one trial court has held that this limitation extends to the statute of repose.  This is particularly relevant to construction contracts, where the statute of repose is six years.  See Miss. Code. Ann. § 15-1-41.  While claims amongst private parties related to public projects would be subject to the six-year statute of repose, claims against the State or its political subdivisions may not be.  

Again, this article is not intended to discourage participation on public projects.  But it is important to be mindful of potential risks and plan for them on the front end.  This will benefit everyone involved down the road.