The good faith acts of directors of profit or non-profit corporations which are within the powers of the corporation and within the exercise of an honest business judgment are valid.  Rywalt v. Writer Corp, 526 P.2d 316, 317 (Colo. App. 1974).

It is educational to review the Rywalt case, above, to show the deference the courts will give to Board decisions. In this case, a group of homeowners sued the Association in an attempt to prevent the Association from entering into an agreement with the developer to build a second tennis court on the common area close to the plaintiffs’ homes. The cost of the tennis court would be borne by the developer. The plaintiffs argued, among other things, that the Association’s decision was arbitrary and capricious. Continue Reading Court Deference to Board Business Decisions