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Case No. A08A1949

by: Varsha Mandiga

Case No. A08A1949 BUSA 2106

Varsha Mandiga
GPA 4.0

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Case Briefs
Legal Environment Of Business
Class Notes
BUSA, 2106, GSU, Ryan
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This 2 page Class Notes was uploaded by Varsha Mandiga on Thursday March 10, 2016. The Class Notes belongs to BUSA 2106 at Georgia State University taught by Grelecki in Spring 2016. Since its upload, it has received 33 views.


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Date Created: 03/10/16
Varsha Mandiga GENERAL STEEL, INC.   v.   DELTA BUILDING SYSTEMS, INC. et al. FACTS Case No. A08A1949 When: March 27 , 2009. Where: Court of Appeals of Georgia. Who: Appellant ­ Jones, Cork & Miller, Hubert C. Lovein Jr., Cater C. Thompson, Macon     Appellees – Duffy & Feemster, Stanley Earl Harris Jr., Benjamin S. Eichholz, Savannah.     PHIPPS, Judge.  What: General Steel, Inc. appeals ruling on cross­motions for summary judgment in connection with              its breach of guaranty claim against Benjamin Eichholz, who had executed a guaranty on              behalf of his company, Delta Building Systems, In. Because the trail court erred in the              contested rulings, we reverse. ISSUE(S)  Eichholz wanted to obligate himself personally to pay General Steel up to $30,000 of his  corporation's indebtedness so that his company could obtain on credit building materials from General Steel. It is undisputed that, after Eichholz gave General Steel the personal guaranty,  Delta obtained on credit approximately $30,000 of building materials from General Steel,  failed to pay for those materials, and submitted to a judgment for its indebtedness to General  Steel.   Eichholz cited undisputed evidence that General Steel had not sent directly to him any  invoice or payment information regarding Delta's account. o The trial court agreed with Eichholz that the provision constituted a condition  precedent that General Steel had not performed.   It thus ruled in Eichholz's favor on  the parties' cross summary judgment motions. General Steel challenges these rulings  on appeal.   General Steel claims that its failure to send the account information directly to Eichholz was  not a material breach of the guaranty. RULE(S)  OCGA § 13­2­2. Rules for interpretation of contracts generally.  OCGA § 13­2­3. Ascertainment and enforcement of intention of parties generally.  OCGA § 13­2­4. Ascertainment of intention of parties where meaning placed on contract by  one party known to other.  OCGA § 10­7­1. Contract of surety ship or guaranty defined; liability of surety generally.  OCGA § 10­7­22. Discharge of surety by increase of risk. ANAYLSIS   The case employed no explicit words of condition, and there are no expressions in the  entirety of the guaranty to the effect that the cited provision is to be construed as a condition  precedent. We conclude as a matter of law that the contractual language contained no  ambiguity as to whether a condition precedent was created­it did not. Although Eichholz  deposed that his guaranty was effective only if he received from General Steel monthly  billings, such extrinsic evidence is unavailing. Where, as here, “the contract's terms are clear  and unambiguous and do not clearly establish a condition precedent, cannot construe the  contract to create one.” In doing so in this case, the trial court erred. Consequently, the grant  of summary judgment to Eichholz was improper. CONCLUSION  Eichholz that he was aware that Delta was receiving materials from General Steel to complete a certain construction project; that had he received copies of General Steel's invoices, he  would have made sure that his company paid General Steel; and pertinently, that he could  have obtained from his company at any time copies of General Steel's invoices.    Furthermore, given that Eichholz's liability under the guaranty was expressly capped at  $30,000, there is no evidence that General Steel's failure to comply with the cited provision  exposed Eichholz to greater liability.   Because General Steel's failure to comply with the cited term was not a material breach of the guaranty so as to have discharged Eichholz from his obligation thereunder, the trial court  erred in denying General Steel summary judgment ­ Judgment reversed. 2


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