2020 Georgia Code
Title 13 - Contracts
Chapter 4 - Modification, Extinguishment, and Renewal
Article 2 - Performance
§ 13-4-20. Requirements as to Performance of Contractual Obligations Generally

Universal Citation: GA Code § 13-4-20 (2020)

Performance, to be effectual, must be accomplished by the party bound to perform, or by his agent where personal skill is not required, or by someone substituted, by consent, in his place, and must be substantially in compliance with the spirit and the letter of the contract and completed within a reasonable time.

(Orig. Code 1863, § 2811; Code 1868, § 2819; Code 1873, § 2870; Code 1882, § 2870; Civil Code 1895, § 3724; Civil Code 1910, § 4318; Code 1933, § 20-1101.)

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).

Failure to comply with written notice provision.

- After an employee made unauthorized transfers and implicated a temporary bookkeeper in the fraud, the 90-day notice provision in the contract between the employer and a temporary staffing company barred the employer's breach of contract claims because although the employer orally notified the staffing company of the bookkeeper's involvement, the employer's written notice, produced several months too late after it learned of the bookkeeper's fraud, did not constitute substantial compliance with the written notice requirement in the contract. Triad Constr. Co. v. Robert Half Int'l, F.3d (11th Cir. Feb. 7, 2017)(Unpublished).

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 (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).

Electric membership corporation (EMC) board's proxy voting bylaw amendment violated the terms of a settlement agreement reached between the EMC and the EMC's members because the amendment significantly changed the conditions under which the parties' agreed-upon plan for proposing proxy voting to the members was implemented. It therefore violated the spirit if not the letter of the agreement in contravention of O.C.G.A. § 13-4-20. Brown v. Pounds, 289 Ga. 338, 711 S.E.2d 646 (2011).

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).

Issues for jury to determine.

- Grant of summary judgment to the defendant was reversed in a breach of contract action because whether the plaintiff substantially completed work entitling the plaintiff to payment under the contract, whether the defendant ordered the plaintiff to stop work, and whether the plaintiff abandoned the work were disputed issues of material fact for the jury to decide. Southeastern Erectors, LLC v. Premier Building Sys., Inc., 347 Ga. App. 578, 820 S.E.2d 214 (2018).

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).

Summary judgment was improperly granted to the buyer as the buyer had not shown that the property owner's defense of impossibility of performance did not exist; and a jury should determine what was a reasonable amount of time within which the owner would be expected to subdivide the property. Allen v. CFYC Construction, LLC, 354 Ga. App. 890, 842 S.E.2d 297 (2020).

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).

Settlement check not negotiated in three years unreasonable as matter of law.

- Widow seeking to enforce a settlement reached with an insurer of a third-party tortfeasor failed to show that the widow performed the widow's obligations under the settlement agreement within a reasonable time (i.e. by returning the requested release and negotiating the check within a three-year period), making summary judgment for the insurer proper. DeMarco v. State Farm Mut. Auto. Ins. Co., 346 Ga. App. 882, 817 S.E.2d 360 (2018).

No genuine issue of material fact as to substantial performance.

- Trial court did not err by granting summary judgment to the Georgia Department of Transportation (DOT) as to the sureties' claims for breach of contract and violation of the Georgia Prompt Payment Act, O.C.G.A. § 13-11-1 et seq., because there was no issue of material fact as to whether a contractor's and the sureties' failure to comply with the claim notice provisions of the contract were waived by the DOT. Western Sur. Co. v. DOT, 326 Ga. App. 671, 757 S.E.2d 272 (2014).

Reasonable time to complete sale of LLC interest.

- In a dispute between a vein doctor's widow and the deceased's LLCs, because the LLCs' operating agreements provided a method for the sale of a deceased member's interest but no time for the sale, the trial court properly established a cutoff date 20 months after the doctor's death as the date beyond which the estate could no longer receive an equal share of the profits and losses of the LLCs; the trial court correctly refused to allow the widow to thwart the intent of the parties by impeding the sale. Davis v. VCP South, LLC, 297 Ga. 616, 774 S.E.2d 606 (2015).

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 A.L.R. 1654; 44 A.L.R. 824.

Right to enforce purchaser's promise to pay mortgage when the grantor or promisee was not himself liable, 12 A.L.R. 1528.

Substantial performance of contract for manufacture or sale of article, 19 A.L.R. 815.

Measure of recovery by building contractor where contract is substantially, but not exactly, performed, 23 A.L.R. 1435; 38 A.L.R. 1383; 65 A.L.R. 1297.

Rights of parties to a timber contract upon failure of purchaser to remove timber within time fixed or within a reasonable time, 31 A.L.R. 944; 42 A.L.R. 641; 71 A.L.R. 143; 164 A.L.R. 423.

Option to pay purchase price in cash or on terms, 36 A.L.R. 857.

Assignability of contract to furnish all of buyer's requirement or to take all of seller's output, 39 A.L.R. 1192.

Liability on the contract of one who without authority assumes to contract for another, 42 A.L.R. 1310; 60 A.L.R. 1348.

Death of contractor as terminating building contract, 44 A.L.R. 1345.

Notice after close of period as satisfying requirement that it be given at end of period, 45 A.L.R. 725.

Early death of vendor as affecting enforcement of contract to convey in consideration of contract for his or her support for life, 49 A.L.R. 601.

Parties or obligations to which time-of-essence clause in contract applies, 107 A.L.R. 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 A.L.R. 1062.

Time factor in purchase or sale of corporate stock under contract not fixing a definite time for demand or performance, 144 A.L.R. 895.

Construction and effect of provision in private building and construction contract that work must be done to satisfaction of owner, 44 A.L.R.2d 1114.

Partial payment on private building or construction contract as waiver of defects, 66 A.L.R.2d 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 A.L.R.3d 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 A.L.R.3d 930.

Timeliness of notice of exercise of option to purchase realty, 87 A.L.R.3d 805.

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