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What You Can Do in Georgia When Your Contract Partner Impermissibly Terminates Your Commercial Agreement Unilaterally

Poole Huffman, LLC

When you enter into a commercial contract, you likely have high hopes for a successful project, a mutually beneficial relationship and perhaps more business in the future. Of course that doesn’t always happen. Sometimes, the other side walks away in the middle of the project. When they do, and the contract did not give them the right to terminate the deal unilaterally, then you may be entitled to use their action as the basis to recover a sizable sum of compensation. To learn more about what you can do – and recover – in your commercial contract repudiation case, seek the advice of a knowledgeable Atlanta commercial contract attorney.

A case between a North Georgia entity and an out-of-state vendor is a good example of how to pursue damages when the other side repudiates your contract. The contract involved a Gwinnett County-based healthcare provider that hired a Seattle-area analytics firm to provide a software system that would allow the healthcare provider to access patient information in a more efficient and organized way. The contract had an initial five-year term.

However, just six months into the contract, the healthcare provider grew disillusioned and sought to end the project. The vendor, however, indicated that it remained ready, willing and able to complete the project and that the parties’ agreement did not give the healthcare provider the right to cancel the contract unilaterally.

Eventually, the parties ended up in court. The vendor argued that the healthcare provider had engaged in a repudiation of contract, which is also known as an anticipatory breach of contract. Generally, there are three ways in which anticipatory breaches occur: a party may flat-out state its intent not to perform as agreed under the contract, events may render the fulfillment of contract obligations impossible or, lastly, it may occur through deception.

So, what amount of damages can I get in an anticipatory breach case?

In some types of cases, you can only recover an amount equal to the value of services you performed up to the breach. However, the law of anticipatory breach in Georgia is not like that. The law says that the amount of damages you receive should put you in the position you would have been in had the other side performed rather than breached. Once you have proven that a qualifying anticipatory breach took place, you may recover the entire value of the contract that you would have received had the project been completed. In this vendor’s case, that meant recovering $5.1 million in contract damages plus interest.

On top of that, the vendor was able to recoup another $2.3 million in attorneys’ fees and expenses. Georgia law says that, generally, the expenses of litigation “shall not be allowed as a part of damages.” There is an exception under the law, however, if the other side “acted in bad faith, has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense.” The vendor in this case had evidence that, despite the lack of a bona fide dispute about the healthcare provider’s anticipatory breach and its liability, the healthcare provider nevertheless engaged in stubborn litigiousness, opening the door for an award of attorneys’ fees and expenses under Georgia law.

Not all breach of commercial contract cases are created equal. Some may involve damages equal to the value of the work done, some may entitle you to the full value of the deal and some may allow you to recover additional forms of compensation on top of that. To make sure you are getting everything that the law says that you should receive from your breach of contract case, look to the knowledgeable Atlanta commercial contract attorneys at Poole Huffman, LLC to provide you with the powerful representation your case needs. Contact our attorneys online or by calling 404-373-4008 to schedule your confidential consultation.

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