Articles Posted in Contracts

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In a commercial litigation situation, there may be multiple different ways to achieve success. There can also be a variety of ways to damage or destroy your case. One of these is failing to complete various procedural necessities, or failing to do them on time. Procedural compliance, even though it is often completely independent of the facts of your case, can still make all of the difference between a favorable and an unfavorable outcome. To be sure your case doesn’t get tripped up by these types of problems, make sure that you retain skilled Georgia business litigation counsel.

A recent lawsuit between a contractor and a financier of commercial equipment was an example of this risk. The finance company asked for, and received, a summary judgment in its favor. The trial court’s summary judgment order effectively ended the case.

Not satisfied, the contractor sought to appeal the summary judgment in favor of the finance company. The contractor filed its notice of appeal in a timely manner. Unfortunately for it, it fell short with regard to several other procedural requirements. When you are seeking to appeal a court order that went in favor of your opponent, several things need to be done. A notice of appeal must be filed within the time period allotted by the law. Additionally, you must also make a timely request to the trial court to have a transcript created of the hearing that produced the order you are appealing. Furthermore, there may be certain court costs that you must pay and pay within a specific deadline.

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Whenever any business person or entity decides to create a new joint venture, the people behind that venture likely hope for great success. Sometimes these joint ventures do go on to yield positive results. Other times, however, the venture doesn’t work out. When joint ventures fail and break up, that can sometimes lead to litigation. When they do, the exact language that was contained in your operating agreement may prove to be the key to resolving the case. Whether your joint venture has failed and entered into the court system, or you are at the beginning phase and are fleshing out the terms of an operating agreement, it is important to make sure you have experienced Georgia business attorneys handling your case.

An example of a joint venture that didn’t meet with success and did trigger litigation was an Athens-based LLC formed to develop medical technology. Ownership of the joint venture was split equally between a holding company and another LLC, Healthy-IT, that was formed expressly for the purpose of entering into the joint venture. Specifically, the venture’s goal was to develop electronic medical record software.

Eventually, the venture devolved into a dispute, and the joint venture LLC, along with the holding company and others, sued Healthy and related entities for, among other things, breach of contract, breach of fiduciary duty, and misappropriation of trade secrets. The defendants filed a counterclaim that accused the plaintiff of breach of contract, among other things.

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When you decide to pursue a breach of contract lawsuit, it is very important to make sure that all T’s are crossed and I’s dotted. Even seemingly small imperfections may do grave damage to your case. In one recent case, the lack of a contractor’s license proved to be a major problem for the plaintiff who sought damages for an alleged breach. Whether you are pursuing or defending a breach of contract action, you need to make sure you have an experienced Georgia commercial litigation attorney on your side.

The plaintiff in the lawsuit was a home building company that signed a contract for the construction of a residence in Cumming. After the builder had partially constructed the house, disputes arose between the owner and the builder. The owner terminated the contract before the job was completed. The sole owner of the building company, who had signed the contract on behalf of the building company, did not have a Georgia builder’s or contractor’s license when the builder did its work on the house.

After the owner terminated the agreement, the builder sued for breach of contract. The owner, in opposition, filed a motion with the court asking the judge to grant summary judgment, which would end the builder’s case before it even got to trial. The owner’s argument was that the owner of the building company was not properly licensed in Georgia, and Georgia law prohibits unlicensed contractors from enforcing a contract “or the performance of work for which a license is required.”

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In any commercial contract, there are likely several things you desire to get from the arrangement, which is why the agreement you sign hopefully has been carefully negotiated prior to execution. To make sure that you get the benefit for which you negotiated, it is important to understand what types of clauses are, and which are not, enforceable under Georgia law. To be sure your contract or any of its clauses won’t be thrown out as unenforceable, ensure you’re relying on representation from a knowledgeable Georgia commercial contracts attorney.

A recent case decided by the federal 11th Circuit Court of Appeals was one that looked at what type of fee provisions could, or could not, be enforced under Georgia law. The underlying deal was one between a chain of “quick service” Mexican restaurants and a supplier of tortillas. The deal called for the tortilla company to supply the restaurant’s tortilla needs. The deal had a provision in it for the imposition of something called a “resolution fee.” In this agreement, the obligation to pay a resolution fee was triggered only if the restaurant didn’t order at least $2.5 million worth of products from the supplier over the span of contract term.

So, if the restaurant cleared $2.5 million, the resolution fee was $0. If it fell short of $2.5 million, the resolution was equal to 5% of the difference between $2.5 million and the value of the products that the restaurant actually ordered and accepted. The deal called for the restaurant to pay the fee within 30 days, if one was owed.

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Winning your commercial litigation matter is about more than just making sure that you have the facts on your side. It is about having the law on your side and also making sure that you have cleared all of the necessary procedural hurdles, like pursuing your case in the correct venue. These are all areas in which knowledgeable Georgia business litigation counsel can help you ensure that you are equipped to succeed.

One recent case in which venue was an issue was an action pitting against each other two former business partners whose relationship had definitely deteriorated. The defendant was a Norcross-based real estate developer. The plaintiff was an Israeli company that raises capital for real estate investments. In 2008, the two businesses consummated a Solicitation Agreement. The agreement came with an arbitration clause. That provision said that the parties agreed to arbitrate their disputes. If the capital company brought the case, the arbitration would proceed in Atlanta. If the developer brought the case, it would be arbitrated in Tel Aviv.

Some time later, once the relationship had soured, the capital company brought a breach of contract claim. In that same action, which was handled in Atlanta, the developer brought a counterclaim that accused the capital company of defaming the developer in statements made to other Israeli investors.

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One of the types of provisions that you might negotiate to include in your commercial lease is an exclusivity term. Many commercial leases contain exclusive use clauses, particularly in situations in which the space is located in a larger shopping center that contains numerous tenants. What an exclusive use provision does for you, as a tenant, is allow you to use your leased space to operate your specific type of business (such as a clothing store, grocery store, electronics store, or restaurant) and to restrict or bar other tenants from operating a similar or identical type of business in that same shopping center.

Obtaining these provisions, and then making sure that they are enforced, can be vital for your business. The chances are that the calculations you made regarding whether or not a particular space’s lease terms made business sense for you included assumptions that you would have a certain zone where you were free from direct competition. If you end up facing competition within that zone, you aren’t getting the benefit of the bargain for which you negotiated. Effectively negotiating lease terms, and then aggressively working to enforce those terms, are areas where it pays to have experienced Georgia business counsel.

As an example, consider the federal litigation undertaken recently by a Florida-based supermarket that has several locations here in Georgia. The supermarket had negotiated and signed certain leases in Florida that included exclusivity provisions regarding groceries and pharmacies. The problem came after certain other stores, including a “closeout” retailer and a dollar store, opened locations in the same shopping centers and began selling food. This, according to the supermarket, was a violation of the exclusivity clause.

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An old adage says “caveat emptor” or “let the buyer beware.” Similarly, the law requires parties to a contract to understand what they’re signing before they sign. That obligation is especially high when the contract parties are both equally strong and sophisticated commercial entities. If you are a corporation, trust, LLC, or any other sophisticated business entity, you need to be especially sure that the contract you sign is the agreement you negotiated and wanted. To facilitate that goal, make sure that you have skillful Georgia contract attorneys handling your representation.

An example of this played out in the federal courts earlier this year. The origins of what would become the case began with a contract between a Swiss trust and a U.S. bank headquartered in Ohio. The agreement called for the bank to take possession of bonds worth $428 million (U.S.), hold the bonds for safekeeping, and provide the trust with some additional services. In exchange, the trust agreed to pay the bank $90,000.

A problem arose, and the bank sent the bonds back to the original issuer. The bank notified the trust, but the trust initially took no action. Two years and two months after that took place, the trust sued the bank for breach of contract in federal court in Florida. The bank was in breach because it didn’t maintain possession as promised, and it didn’t safeguard the bonds as promised.

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There are several essential things that go into pursuing or defending a commercial lawsuit. As a plaintiff, you want to bring your case in your preferred location, but you want to take care to be certain that the law will permit you to sue that defendant in that place, lest you lose your case on jurisdictional grounds. As a defendant, it may be necessary to challenge jurisdiction in order to avoid litigation in some faraway place with which you have little to no ties. Regardless of which side you’re on, Georgia business counsel can help you deal with the jurisdictional questions in your commercial case.

A recent federal breach of contract case is an example of how the process can work. The dispute that ended up in federal court was a breach of contract case that pitted a firearms manufacturer against a sales representative. The representative brought his case in state court in Florida, but the manufacturer successfully persuaded the court that the case should be moved to federal court. There are several reasons why a case might be tried in federal court. One is if there’s an allegation of a violation of federal law, which is called “federal question” jurisdiction. Another is if the opposing parties are citizens of different states, and the amount in question exceeds $75,000, which is called “diversity jurisdiction.”

Regardless of whether a case proceeds in federal court or in state court, the court that ultimately handles the case has to have what’s called “personal jurisdiction” over the parties, which means that the parties must either have a certain degree of contact with that state or else voluntarily consent to the case proceeding in that court.

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As the title suggests, this is the beginning of a five-part discussion about contract for deeds.  In this series, I will discuss several topics relating to this contract, including the four remedies that a seller has upon borrower default and why most Georgia attorneys do not recommended this type of agreement for either buyers or sellers.  I begin by providing a description of a contract for deed, its background and application.As the title suggests, this is the beginning of a five-part discussion about contract for deeds.  In this series, I will discuss several topics relating to this contract, including the four remedies that a seller has upon borrower default and why most Georgia attorneys do not recommended this type of agreement for either buyers or sellers.  I begin by providing a description of a contract for deed, its background and application.

A contract for deed is an archaic legal contract, which is seeing recent revival.  Originally referred to as a bond for title, a contract for deed can be called several other names including a land contract, agreement for deed or installment sales contract.  Under Georgia law, all these agreements are treated synonymously.

When a seller of real estate agrees to finance some or all of the purchase price to the buyer, he may use a contract for deed.  While a contract for deed is one way of many to “seller-finance” a transaction, many sellers find it advantageous for the reasons outlined below.  Other ways to seller-finance include a mortgage, security deed or lease-option contract.

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