{"data":{"id":"us-ky/krs-272a.1-080","jurisdiction":"us-ky","citation":"KRS 272A.1-080","heading":"Supplemental principles of law.","body":"(1) It shall be the policy of the General Assembly through this chapter to give\nmaximum effect to the principles of freedom of contract and to the enforceability of\norganic rules. Unless displaced by particular provisions of this chapter, the\nprinciples of law and equity shall supplement this chapter.\n(2) Although this chapter is in derogation of common law, the rules of construction that\nrequire strict construction of statutes which are in derogation of common law shall\nnot apply to its provisions.\n(3) This chapter shall not be construed to:\n(a) Impair the obligations of any contract existing when this chapter, or any\namendment of it, becomes effective;\n(b) Affect any action or proceeding begun before the chapter or amendment takes\neffect; or\n(c) Affect any right accrued before the chapter or amendment takes effect.\n(4) Written organic rules may provide that the interest of any member who fails to\nmake any contribution that the member is obligated to make or who otherwise\nviolates an obligation undertaken in the  organic rules shall be subject to specified\npenalties or specified consequences for failure. The penalty or consequence may\ntake the form of:\n(a) Reducing or eliminating the defaulting member's proportionate interest in the\nlimited cooperative association;\n(b) Subordinating the member's interest to that of nondefaulting members;\n(c) A forced sale of that interest;\n(d) Forfeiture of his or her interest;\n(e) The lending by other members of the amount necessary to meet the defaulting\nmember's commitment;\n(f) A fixing of the value of his or her interest by appraisal or by formula and\nredemption or sale of the interest at such; or\n(g) Other penalty or consequence.\n(5) Written organic rules may provide rights to any person, including a person who is\nnot a member or not otherwise a party to the organic rules, to the extent set forth\ntherein.\n(6) Except to the extent set forth in the written organic rules, a limited cooper ative\nassociation is bound by and is a party to the organic rules.\n(7) Action validly taken pursuant to one (1) provision of this chapter shall not be\ndeemed invalid solely because it is identical or similar in substance to an action that\ncould have been t aken pursuant to some other provision of this chapter but fails to\nsatisfy one (1) or more requirements prescribed by such other provision.\n(8) No member or other person shall have a vested property right resulting from any\nprovision of the organic rules w hich may not be modified by its amendment or as\notherwise permitted by law.\n(9) Each party to the organic rules shall discharge all duties and exercise all rights\nconsistently with the obligation of good faith and fair dealing. The obligation of\ngood faith  and fair dealing may not be eliminated in the organic rules, but the\nparties may prescribe the standards by which the performance of the obligation is to\nbe measured provided the standards are not manifestly unreasonable.\n(10) To the extent the organic ru les do not otherwise provide, this chapter shall govern\nrelations among the limited cooperative association, the members, the directors, and\nthe assignees.\n(11) For purposes of KRS 141.0401, each limited cooperative association with investor\nmembers shall be a limited liability pass -through entity, except to the extent of\npatronage activities or dividends.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=40984","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:53:21Z","sha256":"d4dd9c5358fb87655fbc2539c4b056dccdfd6484a779d8eb35e2837e45ae8eb5","source_id":"us-ky","stale":false,"prev":"us-ky/krs-272a.1-070","next":"us-ky/krs-272a.1-090"},"notice":"GroundRules: Original legal text. Not legal advice."}