Top 10

Creating business partnerships with Native American communities can be rewarding and fruitful, but not without risk. Consider the following when negotiating a contract with a tribal governmental entity. 

  1. Sovereign Nation. You are negotiating with a sovereign nation, which means the laws within a Native American community supersede state or local government laws. 
  2. Tribal Council. The tribal government within Native American communities abide by the laws of business conduct within its borders. These are enacted by a legislative body, traditionally referred to as a tribal council. 
  3. Tribal Ordinances. Tribal laws are usually referred to as tribal ordinances. Make sure you obtain, review and understand them, as they oftentimes differ from state or local government laws. 
  4. Business License. Determine if a tribal business license is required. Be sure to comply with all requirements and fees included as part of the process to avoid delays or loss of business opportunities. 
  5. Tribal Employment Preference Ordinance. Obtain, understand and comply with this ordinance. Oftentimes, sovereign nations require that contractors working within Native American communities adhere to Native American hiring preferences.  
  6. Tribal Gross Receipts Tax. Determine whether the tribe levies a gross receipts (sales) tax on the revenues it pays you. Understand how the tax works and whether it makes good business sense in your deal. 
  7. Sovereign Immunity. Understand that the tribe will have “sovereign immunity” from being sued in relation to most commercial matters in any court, without its consent.  
  8. Effective Dispute Resolution. A properly drawn contract can provide meaningful, two-way dispute resolution procedures. 
  9. Tribal Court. Be aware vendors may be subject to suit by the tribal government in tribal court. The Arizona courts have authority to permit execution of tribal court judgments against vendors here. 
  10. Bottom Line. Work with counsel who understands the laws and customs of the tribe with which you wish to do business. Tribes understand the need to earn a reputation as good business partners, and will work with vendors in good faith.

John Kofron is a director with Fennemore Craig in Tucson. He concentrates his practice in construction law, with a primary focus on preparing and negotiating design and construction contracts. Reach him at jkofron@fclaw.com.