Articles Posted in Contracts

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.

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.

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.

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.