There are two types of liability: contractual liability resulting from the poor performance of the contract and liability in tort resulting from a mistake committed outside of any contract:
1. CONTRACTUAL LIABILITY
The director does not commit himself but the organization he represents.
The director is bound by a contract of mandate to the NPO and hence represents the Association plus acts on its behalf.
If he performs badly his mandate, he commits a fault of management and his contractual liability may be incurred.
The director must act with care and diligence and must respond to any fault even minor ones.
However, if the term of the director is carried free of charge, its liability shall be assessed less severely by the judge.
The Association may file an action for breach of duty against the director via a decision taken by the General Assembly (each director is told liable for the faults he commits).
If there is shared negligence between the directors, directors could be found jointly liable.
2. LIABILITY IN TORT
Liability in tort exists when the fault arises outside of any contractual relationship with the third party or aside a contractual relationship.
Therefore, this type of responsibility can only be incurred if the fault committed by the director is not exclusively contractual.
The fault must violate the “general duty of care that applies to everyone”.
Similarly, in case a contract also exists with the third-party, the damage must be distinct from the breach of contract so that in practice, directors are usually not facing individual liabilities to third parties that also experience a breach of contract with the organization.
A sound advice is to have the organization enter into a civil liability insurance policy for the duties of its directors & staff members.
