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Dues

In a club or organization, dues is the charge or fee levied from its members.  Expenses of an organization will be shared among the members.  The term dues can be defined as the payment which a member makes to the expense of a club or organization.  There is no assertion upon the uniformity between the proportion of an individual contribution and the benefits s/he receives.  Usually, the articles of association or bylaws impose upon members a liability for non payment of dues.  An individual’s membership with an organization continues until the association or organization remains a going concern.

Generally, courts do not interfere with any association’s internal management.  However, courts determine the issue of liability of a member for non payment of dues, when the act complained of constitutes:

  • allegations of fraud;
  • allegation of bad faith;
  • gross mismanagement;
  • unlawfulness; or
  • outside of the association’s powers.[i]

Courts need not interfere with decisions of the directors of a corporation unless the decisions complained of constitute fraud, bad faith or gross mismanagement or are unlawful or ultra vires.[ii]

Courts can interfere with the liability of payment of dues only when the dues are enforceable.  The dues must be levied pursuant to regulations prescribed by the articles of association or the bylaws.  Moreover, the liability to pay dues can be enforced only against voluntary members of the association.  Some members may benefit from an association, but may not like to be members of the association.  Such members need not be compelled to make payment to the association.

Moreover, an unincorporated association cannot sue for unpaid dues.  However, an incorporated association can move against a person guilty of an offence for unpaid dues.  A member properly resigned or withdrawn from an association cannot be sued for dues recurring after his/her withdrawal or resignation.  However, an individual member’s membership with an organization does not cease on his failure to pay dues within the stipulated period.  Moreover, a member is not relieved from liability for dues even when he/she is placed under suspension.

[i] Williams v. Salisbury Ice Co., 176 Md. 13 (Md. 1939)

[ii] McDonald v. Lake Hauto Club, 1979 Pa. Dist. & Cnty. Dec. LEXIS 3 (Pa. C.P. 1979)


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