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A Georgia Case Transformed by One Word Illustrates the Importance of Precision in Your Commercial Contracts

Poole Huffman, LLC

When it comes to protecting yourself from a contract partner failing to perform as promised, there are numerous keys. One is to ensure you have a contract drafted with skill and precision. Another is to avoid making missteps that could cost you the opportunity to assert contractual rights you otherwise would have had. In both of these areas, representation from a skilled Atlanta commercial contract lawyer can be essential in protecting your business interests.

A recent breach of contract case from South Georgia involves both of these issues.

The underlying agreement regarded the development of a new firearm. Specifically, an entity based in Savannah company wanted to bring to market a new pistol caliber carbine gun, which the company had never sold before, so it contracted with a Tennessee company for the design and manufacture of component sets.

The production process faltered and the relationship went south, so the component purchaser sued, alleging breach of contract and other claims. The heart of the company’s case alleged that the component seller “breached the agreement to supply Plaintiff with conforming sets by the prescribed deadlines.”

The seller countersued, alleging that it met its contractual obligations and that the purchaser breached by failing to pay in full.

The purchaser moved for summary judgment but lost, despite having developed some strong evidence.

The agreement discussed the delivery of 700 compliant component sets by June 28, 2021, 700 more by July 28, 2021, and an additional 700 by August 28, 2021. The purchaser gave the court extensive evidence that the seller failed to perform, delivering fewer than 30 sets, none of which could be “integrated into a saleable firearm.”

A Strong Case… But for the Inclusion of One Word

This would seem to provide the purchaser with a slam-dunk case, but the purchaser had one critical flaw. Its documents listed the three dates — June 28, July 28, and August 28 — as desired dates of receipt. This unraveled the purchaser’s case for summary judgment on its breach claim. As the court pointed out, “a delivery date … is the date upon which goods are expected or required to be delivered, whereas a desired delivery date is the date upon which delivery is merely wanted or hoped for.”

The inclusion of the word “desired” completely altered the purchaser’s ability to succeed in its summary judgment motion.

When Your Actions Can Constitute a Damaging Waiver

This case also highlights how crucial it is to respond wisely and strategically if you think your seller has breached by providing non-compliant goods.

The contract gave the purchaser the right to cancel. However, even when your agreement contains a right to cancel and you purported to exercise it, your other actions could undermine that cancellation. Specifically, there’s the legal issue of waiver. If you continue to request the seller’s performance after a purported cancellation — as the purchaser in this case did — it’s possible that those requests constitute a waiver of your right of cancellation.

If you have entered an agreement and the other side has failed to do what they promised, you potentially have multiple options available to you from allowing the other side to continue on the project all the way to suing. The knowledgeable Atlanta commercial contracts attorneys at Poole Huffman, LLC can help you to identify and weigh all your options and assess which best protects you and your business interests. Contact us online or by calling 404-373-4008 to schedule your confidential consultation today.

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