Pub. 6 2016 Issue 1

11 of the business assets or the value of good will and intangible as- sets – the scope required for the appraisal may differ. The scope of work should be clear in the engagement. Valuations are generally performed as of a date certain. The appraiser’s engagement should identify this date of valuation. Other aspects of the appraisal, such as the standard of value (e.g., fair market value, investment value, etc.) under which the appraisal is to be performed may be defined in the engagement. The same is true for the premise of value used by the appraiser (e.g., going concern, liquidation, etc.). Terms of this nature can be addressed in the engagement – they can also vary depending on the type of property being valued (e.g., real estate, equipment). The dealer should address in the engagement the expectation of the end-product of the appraiser’s work and the due date for re- ceipt. That is, spell out whether the appraiser is required to provide a formal report and in what form, including whether the dealer wants to see a draft and the time frame within which the dealer expects or needs all of this to be completed. The end-product for litigation purposes might also include the appraiser’s availability to appear in a legal proceeding regarding the valuation report. Finally, the engagement should address the fees to be paid for the appraisal work to be performed, including whether they are charged hourly or based on some other calculation, payment dates, retainer, related expenses, and other payment terms. As with other professional services agreements, the appraisal engagement should also address other material terms, such as any limitations or contingencies, and other aspects of the relationship, such as confidentiality, default or termination of the relationship, and the like. Once the parties have adequately memorialized the terms of the appraiser’s engagement for the appraisal service to be performed, the parties may sign the engagement letter indicating their agreement with and acceptance of the terms. Documenting the terms and conditions of the appraisal work to be performed is an important first step to procuring the desired appraisal that satisfies the dealership’s expectations, needs and purpose for the appraisal. Paying attention to the details of the engagement on the front end avoids wasted time, energy and re- sources on the back end, and helps facilitate the desired appraisal end-product.  Julie A. Cardosi is Principal of the private firm, Law Office of Julie A. Cardosi, P.C., of Springfield, Illinois, and has exclusively represented the unique business interests of automobile dealers state-wide for nearly 25 years. Formerly in-house staff legal counsel for the Illinois Automobile Dealers Association, she concentrates her practice in the areas of dealership ownership transfers (asset purchases and stock acquisitions), mergers and acquisitions, franchise law and franchise issues, factory relations, corporate law, add points, commercial real estate transfers, advertising, and other issues impacting day-to-day dealership operations. She authored the original versions of IADA’s Employment Policies Manual and Job Description Manual. Dealers may wish to seek the advice of their own counsel on the subject matter of this article.