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Georgia Court of Appeals Allows a Dispute Over a Commercial Contract’s Terms and Conditions to Proceed to Trial

Poole Huffman, LLC

For many years, lawyers and other scholars of contract law have spoken of a “meeting of the minds.” This refers to a state, sometimes called mutual assent, where there is a common understanding of an agreement’s terms between all of the parties. When there appears to be a meeting of the minds, but subsequent disputes potentially reveal otherwise, then it may require litigation to reach a resolution. Wherever you are in the process, it helps to a knowledgeable Georgia commercial contracts attorney to provide advice and representation to meet your need.

A recent case involving a dispute between a cold storage facility and one of its clients was an example of this issue of assent. The dispute arose after the grass and sod company noticed that some of its stored seed had been damaged by water and rodents, and notified the storage provider of the problem. The grass company eventually sent the storage provider an invoice for $9,625.

A week later, the storage provider sent the grass company a check, but it wasn’t for $9,625. The $275 check represented 50 cents for each pound of damaged product. The storage provider arrived at the 50-cents-per-pound rate based on a set of “Contract Terms and Conditions” that were printed on the reverse side of its warehouse receipt.

The grass company did not cash the check. That was likely a wise move. If it had cashed the check, that potentially could have provided the storage facility with an argument that the $275 was an offer to settle the dispute and the grass company’s cashing of the check amounted to an acceptance of the offer. Certainly, the decision not to cash the check may be easier when it’s a sum as small as $275; nevertheless, it is wise to consult counsel before taking important steps like cashing a check in a circumstance like this.

Later that year, the grass company discovered more problems with damage to its seed. It removed all of its product and subsequently sued the storage facility for the total value of all of the seed, which came to almost a half-million dollars.

The storage facility asserted that it did not owe $492,000, but rather only owed 50 cents for every pound, as stated in the terms and conditions. According to a storage facilities employee, clients received, in addition to the warehouse receipt which contained the terms and conditions on its reverse side, a letter that reminded them of the facility’s terms and conditions.

While the case was a unique one in Georgia, the Court of Appeals concluded that the grass company was not bound by the terms and conditions in question. Georgia law defines a “bailment” as “a delivery of goods or property upon a contract, express or implied, to carry out the execution of a special object beneficial either to the bailor or the bailee or both and to dispose of the property in conformity with the purpose of the trust.” The grass company’s delivery to the facility for storage met these criteria for a bailment and Georgia law, according to the court, clearly says that bailments require an assent of the bailor in order to limit the bailee’s liability. In other words, the grass company had to acknowledge and assent to the terms and conditions in order for those terms and conditions to limit the grass company’s compensation in a court case.

There was no evidence the grass company expressly approved of the terms and conditions, so the grass company was entitled to go to trial seek the full value of the damaged seed.

This dispute will (unless settled) proceed to trial because a failure of both sides to be “on the same page” with regard to the specifics of their contractual relationship. Whether you are negotiating a commercial contract or battling over a contract dispute, talk to the experienced Atlanta contract attorneys at Poole Huffman, LLC. Our attorneys spent many years putting together clear and effective business litigation strategies to advance our clients’ interests. Contact our attorneys online or by calling 404-373-4008 to schedule your confidential consultation.

More blog posts:

Facing Jurisdictional Issues in a Breach of Contract Case in Georgia, Atlanta Business Litigation Attorneys Blog, July 16, 2018

How Procedural Errors Can Derail Your Judgment Collection Activity in Georgia, Atlanta Business Litigation Attorneys Blog, July 12, 2018

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