Articles Posted in Contracts

When it becomes necessary to sue a supplier, a distributor, a designer, or another commercial contract partner, you probably have some general expectations. This includes facing vigorous opposition. So, you may wonder, what do you do if the entity you sued simply does… nothing? Fortunately, the law has a process for that but, like all other civil litigation procedures, it is vitally important you complete every step correctly. To that end, even when yours is a lawsuit in which the defendant is not participating, it is still extremely valuable to have a knowledgeable Atlanta commercial contracts lawyer on your side.

A contract dispute from here in Atlanta shows what we mean. An architectural designer, as part of its work erecting a canopy system at the Atlanta international airport, inked a deal with a supplier to purchase steel and other materials.

The supplier allegedly shipped non-conforming materials and also failed to pay all of its own suppliers and subcontractors as required by the agreement. Based on those breaches, the designer terminated the agreement and later sued.

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When you’re negotiating a commercial contract, there are many things on which you may be focusing during that process. Most of them will probably relate to aspects of what will transpire during the life of the arrangement. What’s essential not to overlook, though, is also getting the best “out” options possible. A good termination clause in your agreement can be vital in allowing you to escape a bad deal without potentially running into breach-of-contract issues. A knowledgeable Atlanta commercial contracts lawyer can help you as you negotiate that deal, and then defend the terms of the contract you signed.

A supplier agreement case from here in north Georgia shows a practical example of this in action. The parties were a large nationwide chain of high-end grocery stores and a small Norcross-based Greek yogurt manufacturer.

Six and one-half years after the sides negotiated and executed their supplier agreement, the manufacturer received a letter from the grocery terminating the contract immediately. The letter did not indicate that the manufacturer had breached the terms of the contract; in fact, it stated no reason at all for the termination. This spurred the manufacturer to go out of business and assign its rights to an asset recovery firm, which sued the grocery.

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In the early days of the COVID-19 pandemic, shelter-in-place and other “lockdown” orders had many impacts, including impacts on the performance of commercial contracts. Once again, a commercial contract and COVID-19 are together in the news, although this time it has nothing to do with lockdown orders. Nevertheless, this latest development once again makes for a good time to look at the significance of force majeure clauses in commercial contracts, and to remind readers of the vital importance of a skilled Atlanta commercial contracts lawyer when negotiating, drafting, or enforcing a commercial contract and its force majeure clause.

The newest development regarded a manufacturer of one of the COVID-19 vaccines and one of its billion-dollar contracts. Earlier today, the government of Poland announced that it was unilaterally backing out of commitments to buy large quantities of the BioNTech/Pfizer vaccine.

The country’s health minister told TVN24 that Poland “used the force majeure clause and informed both the European Commission and the main vaccine producer that we are refusing to take these vaccines at the moment and we are also refusing to pay.” The value of the Polish commitment to buy from Pfizer, which ran through the end of 2023, was $1.4 billion (US).

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A character in a famous 1980s comedy film, at one point in the movie, looked at his friend and opined that “strange things are afoot.” Even if your business hasn’t come into contact with time-travelers from the future, that doesn’t mean that you may not face strange things from time to time, including peculiar legal claims against your business. Whether strange or mundane, never ignore or otherwise fail to act on these legal matters. Instead, retain an experienced Atlanta commercial contracts lawyer and get them dealt with.

Depending on the specifics, there may be ways to handle these kinds of lawsuits very efficiently. Take, for example, a contract dispute involving a world-famous rapper that went before the 11th Circuit Court of Appeals… twice.

The rapper was the defendant. The plaintiff was a woman with whom the rapper allegedly had a romantic relationship before his emergence into stardom. The woman, who did not retain an attorney, asserted that a 1992 agreement called for her to receive $40 million “after 20 years was up.” She alleged that a written contract (signed by her and the rapper and witnessed by another man) existed, but she did not provide the court with a copy of that 1992 document.

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In many settings, the acronym “KBYG” stands for “know before you go.” In the world of commercial contracts, an experienced Atlanta contracts lawyer can help you with an essential task that might potentially be abbreviated as “KBYS,” or “know before you sign.” The right legal counsel can tell you exactly what is in your agreement, what is not, and exactly where your rights and responsibilities start and stop. That way, you can be sure you’re armed with complete knowledge before you make a binding decision.

A recent breach of contract case before the 11th Circuit Court of Appeals potentially looks like an instance where this sort of problem arose. The underlying contract, inked in 2012, covered the co-production of a new telenovela that was based upon the life and times of a one-time leader of a Mexican drug cartel. The co-producing entities were a Colombian television network and a U.S.-based Spanish-language network

The networks’ contract said that the two entities would jointly own “all elements” of the telenovela series. If either network decided it wanted to create a spinoff or other “derivative work,” it had to offer the other network the option to co-produce the derivative series together.

When you sign a commercial contract, you do so with the expectation that the other side dealt with you openly and honestly. Sometimes, though, that’s not reality. When you encounter a situation where your contract partner has made a mistake or engaged in fraud with relation to one or more essential contract terms, you have certain legal rights. You must, however, know exactly what to do and when to do it because, if you take the wrong step or act at the wrong time, you could lose those rights due to something called a “waiver.” To make sure you are safeguarding all of your rights and those of your business, you need the protection of an experienced Atlanta commercial contracts lawyer, who can advise and guide you through this potentially tricky process.

Here’s an example of how things can go wrong with a misstep. The underlying commercial contract was one between a healthcare company and a supplier of COVID-19 rapid tests. Before signing the deal, the healthcare company made sure to inquire about the tests’ “general availability.” The healthcare company agreed to the deal based upon the supplier’s assurances that it could supply 3.75 million tests immediately.

The buyer asked the supplier to begin delivering the 3.75 million tests, but the supplier balked. The buyer contacted the manufacturer, who informed the buyer that it only had 1.2 million tests. The buyer asked the supplier to provide it with the 1.2 million tests that the manufacturer had available, but the delivery was not forthcoming.

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In today’s business world, commercial transactions cross state lines with regularity. What may start as a lawsuit in Texas could later spawn action in New York. As a result, now more than ever, it is important to understand when a choice of law provision is (and isn’t) triggered. When it comes to drafting an agreement that will do what you want in the event of future litigation, be sure that you have representation from a skilled Atlanta business contract attorney.

A contracts case recently dismissed by a federal judge here in Georgia (and affirmed by the 11th Circuit Court of Appeals) is a good example. It all started with a Kansas construction project that went awry. The subcontractor on the project filed suit and eventually settled its case against both the general contractor and the insurance company that operated as the general contractor’s surety.

That didn’t resolve everything, however, as the subcontractor and the insurance company continued to contest the amount of attorney’s fees the surety owed. The courts in Kansas determined that the insurance company owed $0. Eventually, the subcontractor went bankrupt and, in 2017, assigned its legal rights related to the case to its Kansas attorney.

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