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contract.jpgWe have discussed the definition of what a contract is in the state of Georgia. We’ve also discussed the different types of contracts in Georgia. And we’ve discussed rules for interpreting contracts here in Georgia.

Today we are going to discuss when a contract needs to be in writing. Another name for this is called “statute of frauds” which is a defense someone can use when they are sued for a breach of contract. It is a good defense because it keeps people from making up lies that aren’t true.

For example, even though a contract can at times be in the form of an oral agreement, what keeps my Uncle Bob from fraudulently filing a lawsuit and then telling a judge that I promised to pay him a million dollars in exchange for his rickety old shack that is falling apart? Obviously, I never would promise Uncle Bob, or anyone else that matter, one million dollars to buy their rickety old shack that is falling apart. But what keeps Uncle Bob or someone else from fraudulently claiming such an oral contract exists? Well, the answer lies in something called the statute of frauds: the requirement that certain contracts need to be in writing so you can prove the truthfulness of their existence and show that someone is not committing “fraud” by lying about a contract that does not exist.

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Morrow_1069660l.jpgThe AJC reported that a Cherokee County wrestling coach Robert Leslie Morrow, age 28, has been charged with sexual assault involving a 16 year old; and a teacher Kristin May, age 32, who failed to report it was also arrested.

The victim, who reported being assaulted, no longer attends school in Cherokee County.

Morrow confessed to the assault when interviewed by detectives. The victim reported the incident to a teacher, Kristin May, in January, but May did not contact police, according to the Cherokee County Sheriff. May, 32, of Canton, was arrested Thursday afternoon and charged with failure to report.

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MB900383616.JPGYesterday, the Department of Justice and four states filed a multibillion-dollar fraud suit against EMC, the Education Management Corporation, known as the nation’s second-largest for-profit college company. The states joining in the suit are California, Florida, Illinois and Indiana. The suit filed that EMC was not eligible for the $11 billion in state and federal financial aid it obtained from the United States government from 2003 through 2011.

The CEO of EMC was previously the head of the University of Phoenix, which has settled suits in the past related to very similar behavior.

While the civil lawsuit is one of many charging the ever growing for profit college industry, the case is the first where the U.S. government agreed to intervene on the whistle-blowers’ claims that they consistently violated federal law by paying recruiters based on how many students it enrolled. The lawsuit alleged that each year, the for profit company falsely certified that it complied with the law, making it eligible to receive student financial aid.

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Contract Newer.jpgGood Georgia Lawyer is sometimes asked by our business owners: “Can I sue for both fraud and breach of contract?” The answer is: “Yes you can!”

We have discussed this issue in a previous article, but we’ll offer further reasoning: It has been well established for decades in Georgia law that the Plaintiff can plead alternative theories of both breach of contract and fraud and is entitled to pursue inconsistent remedies until judgment. See Estate of Sam Farkas, Inc. v. Clark, 238 Ga. App. 115, 517 S.E. 2d 826 (1999) (referring to both causes of action); Carpenter v. Curtis, 196 Ga. App. 234, 236, 395 S. E. 2d 653 (1990) physical precedent) (“Affirmance of the contract by the defrauded party does not necessarily deprive him of the right to sue for damages for fraud, as the right to affirm and the right to fraud damages coexist.”)

Under O.C.G.A. § 13-5-5, fraud renders contracts voidable at the election of the injured party. Fraud ordinarily gives injured party option either to rescind contract so induced, or, by affirming contract, to claim damages as compensation. Barfield v. Farkas, 40 Ga. App. 559, 150 S.E. 600 (1929); Nalley & Co. v. Moore, 51 Ga. App. 718, 181 S.E. 429 (1935); Brown v. Ragsdale Motor Co., 65 Ga. App. 727, 16 S.E.2d 176 (1941).

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footballs.JPGDear Dr. John Barge:

Our law firm urges you to submit a DOE proposed rule pursuant to O.C.G.A. §50-13-4(b) that protects our young Georgia student athletes from further injury and death due to heat related illnesses as a result of sports practice in high temperatures during the most dangerous months of the summer. As you know, just last week, two Georgia high school students have died from heat exposure during football practice – two deaths that should have been completely treatable and avoidable. These deaths are two too many.

Consequently, we ask that you take action by issuing State DOE recommendations to local county school districts, in addition to submitting a proposed rule concerning school sports safety before another student’s life is put at risk.

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bizz.JPGQuestion: Dear Good Georgia Lawyer,

Recently my husband purchased a set of used mechanical engines from a dealer who advertised the engines had “never been in previous wrecks.” The dealer also never provided us with any implied “as is” warranty disclaimer until after we bought the engines. Shortly after buying the engines, we learned that they had been salvaged from previous wrecks. What are our legal rights under the Georgia Fair Business Practices Act?

Answer: Defendants engaged in unfair and/or deceptive business practices which violated the Georgia Fair Business Practices Act O.C.G.A. §10-1-390 et seq by failing to provide the implied warranty disclaimer prior to this consumer transaction. Defendant further engaged in unfair and/or deceptive business practices by expressly warranting that the engines “had never been in wrecks.”

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boat.JPGOftentimes our clients hire us to resolve interesting questions and problems. Here is a recent one that addresses the issue of express warranties:

Question:

Dear Good Georgia Lawyer,

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handshake.JPG

The Official Code of Georgia § 13-4-101 explains the elements and requirements of what is known as “accord and satisfaction.” Accord and satisfaction happens when two parties to a contract, by a subsequent contract, have satisfied the first previous contract, and the subsequent contract has been executed.

What does this mean in simple, plain English?

Well, there are two parts to this law. In a nutshell, the execution of this new, second agreement may amount to a satisfaction of the first, older former contract for two reasons:

1. First, where it is so expressly agreed by the parties (both people state so); or
2. Second, if there was no such agreement to satisfy the first contract, if the new promise is founded on a new consideration (a promise to do something like pay money), the taking of it is a satisfaction of the former agreement.

Here is a good and easy example to understand what it means:

What if I had a contractual agreement with my Uncle Bob that I would hire him to build me a backyard shed for $30,000? Uncle Bob and I agree that I will pay him $10,000 to start the project and $5000 at the end of each week until he is finished.

Unfortunately, during the course of the shed building, Uncle Bob starts drinking again and can barely pick up a hammer to nail a board in straight. The shed turns out completely lopsided and crooked. I tell Uncle Bob that there is no way I am paying him $30,000 for this shed that looks like the leaning tower of Pisa. So, Uncle Bob and I make a new agreement, subsequent from our first contract where I pay him $20,000 rather than the $30,000 I originally promised him.

What is the consideration in this new subsequent agreement? The consideration is that for a $10,000 savings, I gave up what I was entitled to: a well-constructed shed. Uncle Bob gives up his right to full price to avoid being sued for a shoddy performance. Once accord and settlement has occurred, Uncle Bob and I have given up the right to sue for more money under this settlement agreement.

Months later when Uncle Bob is back on the wagon, can he sue me for the $10,000 I was supposed to pay him from the first contract? Can I sue him because I am still mad about the ugly crooked eyesore in my backyard? No! Accord and satisfaction has occurred.

As the Georgia courts have ruled: “Accord and satisfaction is an agreement between two parties to give and accept something in satisfaction of the right of legal action which one has against the other, which when performed is a bar (a blockade) to all actions on this account. Woodstock Rd. Inv. Properties v. Lacy, 149 Ga. App. 593, 254 S.E.2d 910 (1979); M.W. Buttrill, Inc. v. Air Conditioning Contractors, 158 Ga. App. 122, 279 S.E.2d 296 (1981).

Have more questions? Read more here and consider contacting us today to schedule an appointment.
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