O.C.G.A. § 13-4-20 (2019)

Annotations

Cross references. - Delegation of performance under Uniform Commercial Code, § 11-2-210. Effect of absence of specific time provision in sales contracts under Uniform Commercial Code, § 11-2-309. Duty of administrator or executor to fulfill, when possible, decedent’s contractual obligations, § 53-7-9.

Law reviews. - For article discussing failure of consideration, see 4 Mercer L. Rev. 327 (1953). For article surveying recent legislative and judicial developments in Georgia’s real property laws, see 31 Mercer L. Rev. 187 (1979).

JUDICIAL DECISIONS Analysis General Consideration Substantial Compliance Reasonable Time for Performance General Consideration Law leans against destruction of contracts on ground of uncertainty, and a contract which is originally and inherently too indefinite may later acquire precision and become enforceable by virtue of the subsequent acts, words, or conduct of the parties. Thus, the objection of indefiniteness may be obviated by performance and acceptance of performance. M.W. Buttrill, Inc. v. Air Conditioning Contractors, 158 Ga. App. 122, 279 S.E.2d 296 (1981). Performance as curing lack of mutuality or definiteness. - Even though a contract may be lacking in mutuality or definiteness, on account of the uncertainty, still when that party has entered into performance of the contract, and the other party has accepted as fulfilling the terms of the proposal, the contract becomes mutual, binding, and enforceable. M.W. Buttrill, Inc. v. Air Conditioning Contractors, 158 Ga. App. 122, 279 S.E.2d 296 (1981). Tender of performance must be by party bound or someone acting in that party’s behalf. Ferguson v. Bank of Dawson, 57 Ga. App. 639, 196 S.E. 195 (1938). Elements of right to recover are breach and resultant damages. - The elements of a right to recover for a breach of contract are the breach and the resultant damages to the party who has the right to complain about the contract being broken. Graham Bros. Constr. Co. v. C.W. Matthews Contracting Co., 159 Ga. App. 546, 284 S.E.2d 282 (1981). Contract to bore artesian well may be performed by agent. - Absent stipulation to contrary, one who obligates oneself by written contract to bore artesian well for another is under no obligation to perform any of the labor or to give one’s personal attention to work. Council v. Teal, 122 Ga. 61, 49 S.E. 806 (1905). Duty imposed on providers of skilled services. - The law imposes upon building contractors and others performing skilled

services the obligation to exercise a reasonable degree of care, skill, and ability, which is generally taken and considered to be such a degree of care and skill as, under similar conditions and like surrounding circumstances, is ordinarily employed by others of the same profession. Kuhlke Constr. Co. v. Mobley, Inc., 159 Ga. App. 777, 285 S.E.2d 236 (1981). Liability in tort to third party. - The mere failure of a party to a contract to carry out the contract’s terms will not give rise to a cause of action ex delicto in favor of a third person who has contracted with the opposite party to such contract, although in breaching the contract the party so failing may be charged with notice that the opposite party will not be able to perform the contract with such third person. First Mtg. Corp. v. Felker, 158 Ga. App. 14, 279 S.E.2d 451 (1981). Liability in tort for breach procured by nonparty. - A person not a party to a contract may, without justification, procure the contract’s breach, and be liable therefor in tort. First Mtg. Corp. v. Felker, 158 Ga. App. 14, 279 S.E.2d 451 (1981). Good faith implied in unilateral contract. - Where an agreement permits one party to unilaterally determine the extent of the other’s required performance, an obligation of good faith in making such a determination may be implied. Kleiner v. First Nat’l Bank, 581 F. Supp. 955 (N.D. Ga. 1984). Strict compliance required of cancellation provision. - In a lessor’s action to enforce the provisions of a commercial lease pursuant to O.C.G.A. § 13-1-11, because a lessee’s predecessor in interest failed to strictly comply with a cancellation option in the lease, and time was of the essence, the trial court erred in ruling otherwise, resulting in an expiration of the option due to the failure to timely exercise the option; thus, on remand the lessor was entitled to summary judgment on the lessor’s possession claim and to the past rent due under the lease for the term sought. Piedmont Ctr. 15, LLC v. Aquent, Inc., 286 Ga. App. 673, 649 S.E.2d 733

General Consideration (Cont’d) (2007), cert. denied, 2007 Ga. LEXIS 749 (Ga. 2007). Plaintiff ’s failure to fully perform is complete defense to action for partial performance. Main v. Simmons, 2 Ga. App. 821, 59 S.E. 85 (1907); Bateman v. Bateman, 135 Ga. 32, 68 S.E. 795 (1910). Banking transactions. - Plaintiff bank customers alleged defendant bank imposed overdraft fees when an account contained sufficient funds, in contravention of the Deposit Agreement as modified by the implied duty of good faith; thus, the customers sufficiently stated a breach of contract claim in connection with O.C.G.A. § 13-4-20. White v. Wachovia Bank, N.A., 563 F. Supp. 2d 1358 (N.D. Ga. 2008). Cited in Feltham v. Sharp, 99 Ga. 260, 25 S.E. 619 (1896); Johnson v. Bass, 142 Ga. 351, 82 S.E. 1053 (1914); Kraft v. Hendry, 150 Ga. 155, 103 S.E. 169 (1920); Morgan v. Colt Co., 34 Ga. App. 630, 130 S.E. 600 (1925); Townsend v. Hames, 40 Ga. App. 834, 151 S.E. 665 (1930); Campbell v. Rybert, 178 Ga. 28, 172 S.E. 52 (1933); Preston v. National Life & Accident Ins. Co., 196 Ga. 217, 26 S.E.2d 439 (1943); Tyson v. Nimick, 99 Ga. App. 722, 109 S.E.2d 627 (1959); Friedman v. Goodman, 222 Ga. 613, 151 S.E.2d 455 (1966); State Hwy. Dep’t v. Hall Paving Co., 127 Ga. App. 625, 194 S.E.2d 493 (1972); Elkins v. Willett Lincoln-Mercury, Inc., 141 Ga. App. 458, 233 S.E.2d 851 (1977); Davis v. Davis, 243 Ga. 421, 254 S.E.2d 370 (1979); Tallman v. Tallman, 161 Ga. App. 447, 287 S.E.2d 703 (1982); Dennard v. Freeport Minerals Co., 250 Ga. 330, 297 S.E.2d 222 (1982); TRST Atlanta, Inc. v. 1815 The Exchange, Inc., 220 Ga. App. 184, 469 S.E.2d 238 (1996); Najem v. Classic Cadillac Atlanta Corp., 241 Ga. App. 661, 527 S.E.2d 259 (1999); Stephens v. Trust for Pub. Land, 479 F. Supp. 2d 1341 (N.D. Ga. 2007). Substantial Compliance Substantial compliance with terms of agreement suffices. - O.C.G.A. § 13-4-20 requires that substantial compliance with terms of agreement is all that is required of either of party. First Nat’l Bank v. Wynne, 149 Ga. App. 811, 256 S.E.2d 383 (1979).

Compliance with spirit as well as letter of agreement. - When one party has the power to unilaterally set terms in a contract, the discretion to do so is limited by a requirement that the creditor’s action uphold both the spirit as well as the letter of the agreement. In re Royal, 75 Bankr. 50 (Bankr. S.D. Ga. 1987). Obligation of good faith is implied in every contract in Georgia. In re Royal, 75 Bankr. 50 (Bankr. S.D. Ga. 1987). Good faith comparable to substantial compliance. - Good faith is merely a shorter way of saying substantial compliance with spirit, and not letter only, of contract. Crooks v. Chapman Co., 124 Ga. App. 718, 185 S.E.2d 787 (1971). Where plaintiffs entered into a three-year ‘‘Output and Requirements Contract and Security Agreement’’ with defendant, under which defendant was to furnish all the supplies, materials, labor, advice, and other services needed to produce and harvest pecans from pecan groves owned and leased by plaintiffs and to market all the pecans produced from the groves, regardless of whether this contract falls under O.C.G.A. § 11-2-306 or O.C.G.A. § 13-4-20, defendant had a duty to perform in good faith. Flynn v. Gold Kist, Inc., 181 Ga. App. 637, 353 S.E.2d 537 (1987). Arbitration award in dispute over substantial compliance enforced. - When a party delivered cots, substantially the same as ordered, and a dispute arose that was submitted to arbitration, it was held that the plaintiff was entitled to recover the award. Sasseen, Whitaker & Co. v. Weakley & Warren, 34 Ga. 560 (1866). Employment contract. - Issue of fact existed as to whether plaintiff substantially complied with the subject conditions of employment contract, and the trial court did not err in denying defendant’s motion for directed verdict on this claim. Building Materials Whsle., Inc. v. Reeves, 209 Ga. App. 361, 433 S.E.2d 346 (1993). Termination clause. - Trial court did not err in instructing a jury that only substantial compliance, rather than strict compliance, was required with a termination clause. Rome Healthcare LLC v. Peach Healthcare Sys., 264 Ga. App. 265, 590 S.E.2d 235 (2003).

Reasonable Time for Performance Reasonable time implied when not specified. - When contract fixes no time for performance, it is to be construed as allowing reasonable time for that purpose. Bearden Mercantile Co. v. Madison Oil Co., 128 Ga. 695, 58 S.E. 200 (1907). Under contract providing no specific time for performance, reasonable time is to be allowed. Ferguson v. Bank of Dawson, 57 Ga. App. 639, 196 S.E. 195 (1938). When no definite time is stated for the performance of a contract, the presumption is that the parties intended that performance would be had within a reasonable time. Parker v. Futures Unlimited, Inc., 157 Ga. App. 520, 278 S.E.2d 99 (1981). When the contract does not specify a time for performance, the law implies that the parties contemplated that performance would be initiated within a reasonable time. Jeff Goolsby Homes Corp. v. Smith, 168 Ga. App. 218, 308 S.E.2d 564 (1983). Because a real estate sales contract did not specify a closing date other than the date that the seller was able to obtain clear title, performance under the contract was required to be completed within a reasonable time. Weeks v. Rowell, 289 Ga. App. 507, 657 S.E.2d 881 (2008). What is a reasonable time is to be determined by jury under all circumstances. Bearden Mercantile Co. v. Madison Oil Co., 128 Ga. 695, 58 S.E. 200 (1907); Berman v. Berman, 239 Ga. 443, 238 S.E.2d 27 (1977); Dwoskin v. Rollins, Inc., 634 F.2d 285 (5th Cir. 1981); Parker v. Futures Unlimited, Inc., 157 Ga. App. 520, 278 S.E.2d 99 (1981). It is the general rule that what is a reasonable time, under circumstances attending transaction, is a matter for determination by jury. Ferguson v. Bank of Dawson, 57 Ga. App. 639, 196 S.E. 195 (1938). Stipulation ‘‘to be delivered as needed’’ construed as meaning within reasonable time. - Contract whereby plaintiff agreed to deliver to defendant 100,000 cans at stipulated price per thousand, which under terms of contract, were ‘‘to be delivered as needed,’’ necessarily contemplated that cans would be needed in business of defendant,

and time as to when the cans would be needed being left indefinite by terms of contract, it will be construed as having meant within reasonable time. Newbro Mfg. Co. v. American Can Co., 56 Ga. App. 58, 192 S.E. 74 (1937). Construction of term ‘‘immediately.’’ - ‘‘Immediately’’ has been construed in many cases to mean within reasonable diligence and within reasonable length of time in view of attending circumstances of each particular case. Dwoskin v. Rollins, Inc., 634 F.2d 285 (5th Cir. 1981). Construction of term ‘‘presently.’’ - The word ‘‘presently’’ or its synonyms should be given a reasonable and substantial construction, in view of the thing to be done, and not to be considered as equivalent to instanter. Dwoskin v. Rollins, Inc., 634 F.2d 285 (5th Cir. 1981). Delivery of goods shortly means within reasonable time. - In contract for sale of personal property to be delivered shortly, it is duty of the seller to tender delivery within a reasonable time. Cincinnati Glass & China Co. v. Stephens, 3 Ga. App. 766, 60 S.E. 360 (1908). Time to obtain financing. - It was unreasonable as a matter of law for the plaintiff not to obtain financing for seven and one-half years, during which time, based on plaintiff ’s own evidence, the property was available to the plaintiff. Grier v. Brogdon, 234 Ga. App. 79, 505 S.E.2d 512 (1998). Tender of stock certificates six months after execution of contract, unreasonable as matter of law. Ferguson v. Bank of Dawson, 57 Ga. App. 639, 196 S.E. 195 (1938). Demand for immediate payment on note by its terms payable in future. - When a promissory note executed pursuant to the divorce settlement agreement and the agreement itself specifically set forth the time for payment of the note by the former husband to his former wife upon the occurrence of certain specified events, one of which will necessarily occur at some future date, there is no error in a trial court’s denial of the former wife’s demand for immediate payment on the note. McCafferty v. Herring, 157 Ga. App. 699, 278 S.E.2d 436 (1981).

RESEARCH REFERENCES Am. Jur. 2d. - 17 Am. Jur. 2d, Contracts, § 355 et seq. C.J.S. - 17A C.J.S., Contracts, § 451 et seq. ALR. - Liability of one contracting to make repairs for damages from improper performance of the work, 1 ALR 1654; 44 ALR 824. Right to enforce purchaser’s promise to pay mortgage when the grantor or promisee was not himself liable, 12 ALR 1528. Substantial performance of contract for manufacture or sale of article, 19 ALR 815. Measure of recovery by building contractor where contract is substantially, but not exactly, performed, 23 ALR 1435; 38 ALR 1383; 65 ALR 1297. Rights of parties to a timber contract upon failure of purchaser to remove timber within time fixed or within a reasonable time, 31 ALR 944; 42 ALR 641; 71 ALR 143; 164 ALR 423. Option to pay purchase price in cash or on terms, 36 ALR 857. Assignability of contract to furnish all of buyer’s requirement or to take all of seller’s output, 39 ALR 1192. Liability on the contract of one who without authority assumes to contract for another, 42 ALR 1310; 60 ALR 1348. Death of contractor as terminating building contract, 44 ALR 1345. Notice after close of period as satisfying requirement that it be given at end of period, 45 ALR 725.

Early death of vendor as affecting enforcement of contract to convey in consideration of contract for his or her support for life, 49 ALR 601. Parties or obligations to which time-of-essence clause in contract applies, 107 ALR 275. Personal liability for repayment of loan or advance under contract which expressly provides for repayment from proceeds of crop or other property and contains no express promise for repayment otherwise, 111 ALR 1062. Time factor in purchase or sale of corporate stock under contract not fixing a definite time for demand or performance, 144 ALR 895. Construction and effect of provision in private building and construction contract that work must be done to satisfaction of owner, 44 ALR2d 1114. Partial payment on private building or construction contract as waiver of defects, 66 ALR2d 570. Insurer’s acceptance of defaulted premium payment or defaulted payment on premium note, as affecting liability for loss which occurred during period of default, 7 ALR3d 414. Enforceability of contract to make will in return for services, by one who continues performance after death of person originally undertaking to serve, 84 ALR3d 930. Timeliness of notice of exercise of option to purchase realty, 87 ALR3d 805.