Articles Posted in BUSINESS CONTRACT DISPUTES, LEASE DISPUTES & NEGOTIATIONS

As an Atlanta, business lawyer, I deal with non-competition (non-compete) and Non-Solicitation laws on a regular basis. The Atlanta Small Business Lawyers at The Libby Law Firm specialize in Georgia Contract Law for small to medium sized businesses. The Libby Law Firm is a well-known and well-respected Atlanta Law Firm. Our Firm represents a numerous small and medium sized businesses in an abundance of capacities. In this Blog, I analyze the “Georgia Restrictive Covenants Act”, which I believe will significantly change relationships between employers and employee in small and medium sized businesses. I believe this will be especially true in small to medium sized businesses and businesses that employ in specialty areas.

THE “GEORGIA RESTRICTIVE COVENANTS ACT” – THE “BLUE PENCIL” COMES OUT

I write this Blog as an Atlanta Attorney, to let you know a most recent change in Georgia Contract Law, which is bound to have a profound affect on Atlanta Small Business Employer – Employee relations. Georgia voters have favored a constitutional amendment on November 2nd, 2010, which speculated on stringent trade laws; thereby setting constraints on trade and its laws for workers in Georgia. The newly enabled law allows Georgia Courts to repair Restrictive (Non-Compete) Covenants in Georgia Contracts, which bind the employee. In the past, any illegality in the Georgia Restrictive Non-Compete Covenants would have caused the whole contract to fail.


To put it plainly, a fatally drafted Georgia Non-Compete clause or Non-Solicitation Clause drafted by an employer will be given effect as if it were drafted within the limits of the law. Thus, it alters already existing law, which previously rendered the entire restrictive covenant ineffective. This means if any of the restrictive covenants in the contract were unenforceable, whether because of geographical restrictions, scope of work restrictions, or time constraints, the whole contract will be held void ab initio. Now, the Judge can write in the restrictive covenants so that they are enforceable. This action is referred to as “blue penciling” and is tantamount to the judge correcting the contract so that the restrictive covenants are enforceable.

The new law is viewed as dubious, given the incongruity/discrepancy in the date of it being effective. While those who drafted the Georgia House Bill 173 declared that it would be enforced from November 3rd, 2010, the Georgia Constitution asserts that new laws should come into effect from the beginning of the coming year, January 1st. How this drafting error will affect anyone legally is uncertain and chances are that it may have to do the rounds of the courts to determine how it will be applied.

In its most practical aspect, what concerns those employees who intend to start a new business venture, is that; (a) An employment contract implemented before November 3rd, 2010, consisting of a restrictive covenant (a Georgia Non-Compete or Non-Solicitation Clause) will not be qualified for the new law; and, (b) Conversely, any employment contract implemented after November 3rd, 2010, with restrictive covenants; in particular, the restrictive covenants referred to as Non-Compete or Non-Solicitation Clauses, will fall under the new law. However, given the discrepancy in the dates, employment contracts may not be carry the power of this law as the date of commencement, or the new law may be held unconstitutional. This grey area in Georgia Contract Law may be of great concern to those workers aspiring to compete with their previous employers. This is particularly true in a densely populated competitive area such as Atlanta.
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Yes, partnership nightmares are common. . . How common? Read on . . .

I have noticed many individuals are stepping away from their employment with large companies to start their own Georgia businesses. Some feel that the current economic situation has provided a golden opportunity that should be seized and others are forced to move on after being downsized by their companies. Often, these businesses are Georgia partnerships formed with friend, family and/or former work colleagues. Unfortunately, a great percentage of people begin these Georgia partnerships without the proper legal guidance or documentation based on Georgia’s partnership laws. Unwittingly, these would be business partners believe that long time personal relationships between partners, their own personal business knowledge, or other such reasons, will sufficiently protect their Georgia business partnership from internal strife, power struggles, and/or economic failure.

The fact is, even under ideal circumstances, Georgia partnerships are complex and should not be left unchecked. While partnership agreements do keep the “honest people honest,” they also stop abuse by others with less than honorable intentions. As an Atlanta Business Partnership Lawyer, I have handled many cases where even the best intentions between business partners could not stop Georgia partnership litigation from arising. In cases when the business entity does survive, the resulting chaos usually proves to be costly and detrimental to the business.

Thus, preventing Georgia partnership disputes is paramount. This involves retaining an experienced Georgia partnership attorney at the beginning of the partnership to construct a fair and manageable business relationship between partners. The next best thing to beginning a business relationship, in which a Georgia partnership lawyer skillfully guides you, is to catch a Georgia business partnership dispute before it gets serious in order to protect your interests. Usually, the first partner who realizes this and seeks legal guidance has the upper hand in the outcome of any Georgia partnership dispute, litigation, or dissolution.

Georgia partnership disputes can surface between and among anyone with an interest or influence on the company, including Georgia partnership shareholders and family members. Once disputes do arise, business partners are inclined to blame one another for any business failures. Common issues to address when a business is failing include whether or not to sell the company, employee retention, and company management. An experienced Georgia Business Partnership Attorney can help sort out these issues and provide the most beneficial solution to all involved.

The Georgia business partnership attorneys at The Libby Law Firm can assist you in determining and implementing solutions to resolve disagreements between partners, protect Georgia partnership interests, or effectuate partnership dissolutions. While litigation is the most common way Georgia partnership disputes are resolved, mediation or arbitration are also wise dispute resolution options. Other alternatives include buy-outs, settlements and distribution or sale of the business entity.
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As an ATL business lawyer, handling numerous Non-Competition (non-compete) and Non-Solicitation laws on a regular basis. The Atlanta Small Business Lawyers at The Libby Law Firm specialize in Georgia Contract Law for small to medium sized businesses. The Libby Law Firm is a well-known and well-respected Atlanta Small Business Law Firm. Our Firm represents a numerous small and medium sized businesses in an abundance of capacities. In this Blog, I analyze the “Georgia Restrictive Covenants Act”, which I believe will significantly change relationships between employers and employee in small and medium sized businesses. I believe this will be especially true in small to medium sized businesses and businesses that employ in specialty areas.

THE “GEORGIA RESTRICTIVE COVENANTS ACT” – THE “BLUE PENCIL” COMES OUT

I write this Blog as an Atlanta, Georgia, Small Business Attorney, to let you know a most recent change in Georgia Contract Law, which is bound to have a profound affect on Atlanta Small Business Employer – Employee relations. Georgia voters have favored a constitutional amendment on November 2nd, 2010, which speculated on stringent trade laws; thereby setting constraints on trade and its laws for workers in Georgia. The newly enabled law allows Georgia Courts to repair Restrictive (Non-Compete) Covenants in Georgia Contracts, which bind the employee. In the past, any illegality in the Georgia Restrictive Non-Compete Covenants would have caused the whole contract to fail.


To put it plainly, a fatally drafted Georgia Non-Compete clause or Non-Solicitation Clause drafted by an employer will be given effect as if it were drafted within the limits of the law. Thus, it alters already existing law, which previously rendered the entire restrictive covenant ineffective. This means if any of the restrictive covenants in the contract were unenforceable, whether because of geographical restrictions, scope of work restrictions, or time constraints, the whole contract will be held void ab initio. Now, the Judge can write in the restrictive covenants so that they are enforceable. This action is referred to as “blue penciling” and is tantamount to the judge correcting the contract so that the restrictive covenants are enforceable.

The new law is viewed as dubious, given the incongruity/discrepancy in the date of it being effective. While those who drafted the Georgia House Bill 173 declared that it would be enforced from November 3rd, 2010, the Georgia Constitution asserts that new laws should come into effect from the beginning of the coming year, January 1st. How this drafting error will affect anyone legally is uncertain and chances are that it may have to do the rounds of the courts to determine how it will be applied.

In its most practical aspect, what concerns those employees who intend to start a new business venture, is that; (a) An employment contract implemented before November 3rd, 2010, consisting of a restrictive covenant (a Georgia Non-Compete or Non-Solicitation Clause) will not be qualified for the new law; and, (b) Conversely, any employment contract implemented after November 3rd, 2010, with restrictive covenants; in particular, the restrictive covenants referred to as Non-Compete or Non-Solicitation Clauses, will fall under the new law. However, given the discrepancy in the dates, employment contracts may not be carry the power of this law as the date of commencement, or the new law may be held unconstitutional. This grey area in Georgia Contract Law may be of great concern to those workers aspiring to compete with their previous employers. This is particularly true in a densely populated competitive area such as Atlanta.
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As an experienced ATL Business Lawyer and Real Estate Lease Lawyer, I always recommend that my clients have a lawyer review all lease agreements. This is especially true with Georgia commercial leases in Atlanta, which when entered into carelessly can severely limit your success. Without the proper due diligence, your business may suffer if the Georgia commercial lease prevents you from addressing important issues such as signage, parking and physical expansion. This is definitely where spending money to protect your interest is a good idea. Of course, this is my opinion, but I have seen Commercial Landlords become more and more ruthless. The reason? This economy has them losing money and scared, like the rest of us. Therefore, I tender to you the following suggestions:

Keep an eye out for leases that contain the following five pitfalls, and remember to always consult with a qualified real estate contract attorney before signing any lease.

1) Short lease term with a vague renewal clause. It is risky to sign a short lease that gives you no option to renew or that has only vague renewal terms. Lease renewal options give you flexibility and should be clear and concise. The renewal clause should state when you must renew and the percentage that the rent may increase when renewing. Long-term leases are fine for established businesses, but if you are signing a lease for a start-up, then a shorter lease with an option to renew may be ideal.

2) Unfavorable relocation terms. In a relocation clause the landlord states his right to move your business to a different part of the building in order to accommodate another tenant. It is not always possible to avoid this clause, but you can make sure that you have a written agreement that states the terms of the relocation. In the clause you can ensure that the rent will not increase and that the landlord will pay for moving expenses and any required renovations to bring the space up to the same standard as the previous space. It is a good idea to make sure that the clause gives you a minimum of one-month notice if relocation is required.

3) Undefined Fees. All fees to be paid must be stated in the lease agreement. It is not uncommon for landlords to charge fees that were not agreed upon in the lease. In these cases, it is best not to pay these undefined fees. Consult an attorney if the landlord insists.

4) Restrictions that limit growth of your business. All businesses grow and change. Your lease should not restrict you from improving and modifying your space to meet your business needs. This should be negotiated with the commercial landlord and written into the lease before signing.

5) Verbal Agreements. All negotiated terms should be included in the written lease agreement. Verbal or handshake agreements are hard to enforce and can risk your business. Put everything in writing.

Georgia Commercial Leases are generally landlord friendly. Our Firm’s specialty practice areas. From our Atlanta-based Main-Office, Our Atlanta Lease Lawyers handle Georgia Contract Drafting, Negotiating, and Disputes, all over Georgia. Some of the counties and cities include Atlanta, Buckhead, Sandy Springs, Fulton County, Gwinnett County, Duluth, Lawrenceville, Forsyth County, Cumming, Cobb County, Marietta, Acworth, Kennesaw, DeKalb County, North Atlanta, Decatur.
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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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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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