Atlanta Business Lawyer Blog

Over the past few years in my Atlanta, Georgia business law firm, I have found that causes of action for breach of contract are much more prevalent today than in recent history. As an Atlanta Business Litigation Attorney, I have seen this trend steadily increase and attribute it to both the current economic situation and to the fact that we live in a highly transactional society.

Contracts can be written or oral and others are merely implied, but they can all be valid contracts under Georgia law. The number of businesses that provide services to each of us on a business or personal level is staggering – lending and investment institutions, Internet service providers, hospitals, lawn care services, etc. We use contracts when we set up a Georgia business entity, buy or lease office space or hire employees. The list is endless. Thus, disputes and litigation of Georgia breach of contract cases is endless as well.

Business contracts are used to substantiate and clarify the commitment to an agreement between at least two parties or more. With the shear volume of contracts that we come in contact with, it is not surprising that legal claims for breach of contract are common. A breach of contract occurs when the promise made per a contract is not fulfilled. For example, a breach of contract exists when the service or product specified in the contract is not delivered, if payment for the service or product is not made in a timely fashion, or if there is a failure to complete or start the work specified in a contract.

When faced with a breach of contract, it is best to seek the counsel of an experienced Georgia business attorney who handles breach of contract disputes. An attorney will analyze the situation and pursue the most appropriate course of action. Once a breach occurs, the non-breaching party is usually freed from the contractual obligation. Georgia courts typically resolve these cases by awarding damages that make the non-breaching party whole, as if they had never entered into the contract. When money awarded by the court does not fully compensate for the breach, the breaching party may be ordered to fulfill the terms of the agreement anyway. If the breaching party is found to be intentionally acting in bad faith, the court may award attorney’s fees as well as punitive damages to the harmed party.

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In my Atlanta, Georgia Business Law practice, I have worked with clients who have taken their Georgia business litigation and disputes to the court system for resolution, and others who have gone through the process of arbitration. Many times, a business contract specifically states that all disputes must be resolved through arbitration, yet unless contractually mandated, arbitration is often overlooked. It is important to note that while both methods have their advantages, arbitration is often the fastest and can be very cost effective.

In Georgia it can take a minimum of a year for a case to go to trial, while the date of the final arbitration hearing can be set much sooner. Disputes are often resolved just a few months after the arbitration process is initiated. The disadvantage to arbitration is that the parties named in the dispute will pay for the time of an arbitrator. Arbitrators belong to arbitration associations that are usually private businesses, and fees for an arbitrator can cost several hundred dollars per hour. The court system, on the other hand, is funded by tax revenue and requires that the parties pay only filing fees.

Besides the timing advantage, another strong point to arbitration is that the parties can choose the arbitrator that will preside over the case. Arbitrators have been trained in specific technical areas of the law and can be picked with this in mind. Judges in court proceedings cannot be picked and, although they have a broad knowledge of the law, the judge assigned to a case may not possess proficiency in the area that the dispute covers. In complex business disputes, having the option to choose a knowledgeable arbitrator will ensure that all parties are treated fairly under Georgia law.

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As an Atlanta, Georgia, arbitration, home defect, and construction lawyer, I am noticing more and more frivolous claims from Georgia home purchasers and buyers that architects, contractors, builders, sub-contractors, and other persons involved in the construction of a new home, are failing to meet the obligations of the construction contract. These same Georgia home purchasers and buyers are refusing or failing to allow “draws”, or otherwise pay construction professionals, per the construction contract. In fact, they are finding any reason to say that the Georgia construction professionals have not met their obligations per the Georgia construction contract. In my Atlanta, Georgia, construction arbitration and real estate dispute law firm, I am finding that many of these claims, by the purchasers and buyers of these homes, are arising from the fact that these new home purchasers and buyers have fallen on hard financial times.

To be brief, they are looking for a way out of paying you under the obligations of your Georgia new construction contract. Under their theory, a penny owed and not paid, is a penny earned. This is a terrible and pitiful way to try to get of paying under the new construction or new home purchase contract or bargain for a reduction in price. This is especially true given the tough times that construction professionals are enduring in Georgia. These hard-working construction professionals must be paid every penny they have contracted for and earned. This is especially true given the harsh financial and real estate environment they must endure.

In my Georgia construction arbitration and real estate dispute law firm, I handle many matters where purchasers and buyers of new homes are refusing to pay for the design and construction of their home and complaining about upgrades, construction timing issues, “punchlist" items, quality of work, and sub-contractors issues. The list of items and excuses I have heard is endless, somewhat pathetic and every now and then, humorous.

In successfully representing countless Georgia architects, contractors, builders, sub-contractors and other construction professionals, it is important to note that arbitration clauses in new construction contracts are binding and the sole remedy for causes of action and claims, which occur on or after April 28, 2006. Any prior construction or building dispute claims shall continue to be governed by prior law.

As such, every construction professional should know that new home purchasers and buyers are looking for any and every way to avoid paying the full and just price for their new home. The fact that they may have fallen on difficult financial times is their problem, not yours.

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As an Atlanta breach of contract lawyer, I am seeing more and more Georgia breach of contract claims. My opinion is that part of the increase in frequency of breach of contract claims is attributable to the difficult economic times we have encountered. In my Georgia business litigation law firm, I have seen a dramatic increase in breach of contract claims relating to business, real estate, lease agreements, and other forms of contracts. However, the proper way to handle a breach of contract situation is to seek an experienced breach of contract lawyer as soon as you think a claim may exist.

A breach of contract in legal terms amounts to a broken promise to do, or not do an act. Under general principles of law, a breach of contract occurs when a party fails to perform any material term of a contract without having an acceptable legal reason. The contract may be written, oral, or even implied. Under Georgia law, a breach of contract may include not finishing a job, failure to make payment in full or on time, failure to deliver goods, substituting inferior or significantly different goods, not insuring goods, or even failure to begin work on an agreement. In fact, if a party conveys they will not be able to perform under a contract, this is constitutes a form of breach of contract called “anticipatory breach,” and occurs where a party indicates by words or acts that party will not begin, complete, or otherwise materially perform the promised work.

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In my practice as a commercial real estate lease lawyer, I have found the majority business owners will have to deal with the reality of entering into a Georgia commercial lease agreement at some point in during the course doing business. Commercial leases can be lengthy, complicated, convoluted, and practically impossible for even the most sophisticated businessperson to understand. They may utilize industry standard terms such as “triple net lease”, “Subordination”, “Estoppel Certificates”, “Tenant Improvement Allowance”, all of which have legal significance and significant legal implications. There are also always practical issues such as parking, signage and business hours, indemnification and insurance issues, which seem to look harmless in the lease, but may have widespread significant and destructive consequences to the business tenant and even the landlord if not thought through and considered during the due diligence period. The due diligence period is the period in which the parties to a contract, agreement or other business matter are negotiate, research, investigate and consider all issues which can be thought of before any business transaction should take place. During this due diligence period, all commercial leases should be carefully reviewed and scrutinized by an experienced Georgia lease attorney from a Georgia real estate contract law firm. This should be done prior to signing and by both the property owner, prospective tenant and any other party to the contract or agreement.

Remember that once you or your authorized representative signs a commercial lease, you will be bound by its terms. It is common for commercial leases to bind parties for many years on end or even decades or more. There are oftentimes options for additional terms in the lease or agreement that can be exercised and should be carefully thought through. That being the case, a commercial lease can be worth hundreds or thousands of dollars or more, and as such, may be a substantial asset or a liability to any business depending on your position.

There are many working parts in a commercial lease. Often times, many of these parts are negotiable and it is customary and wise to have an experienced Georgia real estate contract attorney to protect your business and personal interests. As such, each of these elements should be understood and considered when negotiating and/or entering into a lease and prior to signing. If you have concerns or fail to address them, you are likely setting yourself up for prospective trouble in the future. As you would expect, commercial landlords usually have ready and offer the initial Georgia real estate agreement to the prospective tenant. They have already paid their experienced GA real estate contracts attorney to draft these agreements in their best interests and with all terms most favorable to their interests. Both landlords and prospective tenants need someone in their corner to protect their best interests when proposing and entering into these specialized real estate contract agreements in Georgia.

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