Georgia Business Litigation Terms - Example of use of terms
Now that the basic litigation terms have been defined, how does the process actually work in the business litigation context? One of the most commonly litigated issues is breach of contract. Here is an example of how the process would unfold.
First, the parties must enter into a contract.
Johnny and Penny have three small children and recently realized that they have outgrown their current residence. In order to purchase a larger home, they would first need to sell their current house. Unfortunately, in the current housing climate, they fear their house would sell for less than it is worth so they decide to finish their basement instead of purchasing a new home.
Johnny and Penny start interviewing contractors for the job. A+ Home Solutions puts in a bid, or an offer, to do the job for $30,000.00. Johnny and Penny submit a counteroffer, asking that A+ Home Solutions do the work for $25,000.00. The $25,000.00 counteroffer acts as a rejection of A+ Home Solutions’ initial offer. A+ Home Solutions accepts Johnny and Penny’s offer. Johnny and Penny wisely consult with their attorney who drafts a written contract for the project outlining each party’s responsibilities and duties. All of the parties sign the contract. In consideration for agreeing to finish the basement, Johnny and Penny gave A+ Home Solutions $5,000.00 to begin the work.
A+ Home Solutions subcontracts the electric work to Bright Lights Co.. The electric work in the rest of the house was done by Lights R Us, but A+ Home Solutions prefers working with Bright Lights Co. Johnny and Penny are very pleased with the finished product and A+ Home Solutions is very happy to get paid for its work. Sadly, the next week the house burns down and the cause of the fire is believed to be electric.
Naturally, Johnny and Penny are very upset. They decide they want to file a lawsuit against A+ Home Solutions and Bright Lights Co.. Because Johnny and Penny are filing the lawsuit, they are the Plaintiffs and A+ Home Solutions and Bright Lights Co. are the Defendants. Johnny and Penny’s attorney drafts the Complaint alleging breach of contract as the cause of action against each defendant. The Defendants A+ Home Solutions and Bright Lights Co. now has 30 days to file their Answer to the Complaint.
Bright Lights Co. does not file its answer within 30 days and, therefore, it is now in default.
A+ Home Solutions files its Answer. In its Answer, A+ Home Solutions also pleads, several affirmative defenses. First, it pleads that the fire was not caused by the electrical work of Bright Lights Co., but that it was caused by the electrical work of Lights R Us. Second, it pleads that it has reason to believe that after Bright Lights Co. was done with its work, Johnny changed the wiring done by Bright Lights Co. so if there was a problem with the new wiring, it was Johnny’s fault. A+ Home Solutions also files a cross-claim against Bright Lights Co., a counter-claim against Johnny and Penny and they bring Lights R Us in as a third-party defendant. The lawsuit is styled something like this:
Johnny and Penny Homeowner
Plaintiffs
v.
A+ Home Solutions and Bright Lights Co.
Defendants
v.
Lights R Us
Third-party defendant
Now begins the discovery period where the parties can use different tools to obtain information that will help them make a persuasive case at trial or position themselves to negotiate a settlement. Johnny and Penny send written discovery requests, including Interrogatories, Request for Admissions, and Request for Production of Documents to A+ Home Solutions. After they receive A+ Home Solutions’ written responses to the discovery requests, they take the deposition of the president of A+ Home Solutions. A+ Home Solutions also sends the plaintiffs written discovery requests and takes the depositions of the plaintiffs.
The plaintiffs’, however, refuse to provide complete answers the discovery requests. A+ Home Solutions files a Motion with the court asking the court to order the plaintiffs to answer the discovery requests. The plaintiffs file a Response explaining to the court that they cannot respond further because all of the information they need to respond burned up in the house fire. In support of their Response, Johnny attaches his affidavit where, under oath, he states what actions he has undertaken to respond to the discovery requests. A+ Home Solutions files a Reply explaining why the plaintiffs could have answered the discovery requests. The court then issues an order telling the plaintiff’s they must respond within 30 days.
After the discovery period ends, the parties decide to begin to negotiate a settlement. When each party is satisfied with the terms of the settlement, they enter into a settlement agreement.
