When business ventures are first starting out, the parties involved are usually on good terms in an amicable relationship. But what happens when the relationship breaks down? Hopefully the parties had a detailed contract that outlined the appropriate actions for each party and next steps to either terminate or modify the relationship so they can move on to their next business opportunity.
But sometimes even a detailed contract may not be enough to help the parties resolve their differences. In this case, it’s time to review the contract’s dispute resolution process. Many agreements may include language selecting a specific venue for traditional litigation or (as we are seeing more often these days) electing to arbitrate disputes. As of last fall, Georgia businesses have a new option to consider for dispute resolution.
Georgia’s State-Wide Business Court (the “GA Business Court”) officially began accepting filings on August 1, 2020. Here are a few points to consider, if you are dealing with a potential business dispute in Georgia:
- What kind of cases can be handled by the GA Business Court?
Briefly and broadly, the Georgia Business Court has jurisdiction over the following types of cases, if the parties are looking for more than $500,000 in damages or equitable relief:
- Cases where the parties have agreed in writing to arbitration;
- Cases under Georgia’s Trade Secrets Act;
- Cases involving securities, including those covered by the Georgia Uniform Securities Act of 2008;
- Cases covered under the Uniform Commercial Code (everything under Title 11 of Georgia’s code);
- Claims under Georgia’s corporate code, including issues involving corporations, partnerships, limited partnerships, and limited liability companies;
- Broadly, any claims that deal with internal affairs of businesses, including rights or obligations between business participants, like liability or indemnification concerns (“business participants” includes but is not limited to officers, directors, managers trustees or partners);
- Cases under federal law where Georgia courts have concurrent jurisdiction;
- Tort claims between two or more businesses or individuals involving their investment or business activities, like contracts, transactions, or business relationships;
- Claims for breach of contract, fraud, or misrepresentation between businesses or coming from a business transaction or relationship;
- Cases involving e-commerce agreements (licensing agreements, software and biotech agreements, or licensing of intellectual property rights right patent rights);
- Cases involving commercial real property (but only if the parties are seeking more than $1 Million in damages or equitable relief)
The Georgia Business Court specifically may not handle cases for personal injury or death, mental or emotional injury, physical contact, threat of physical violence, domestic disputes, residential landlord and tenant disputes, foreclosures, individual consumer claims involving retail goods or services, or collections from family owned farms or individual farmers.
Further details on which cases can be handled by the Georgia Business Court can be found at OCGA § 15-5A-3.
- Do Businesses Have to Use the GA Business Court?
No. Unless both parties to a dispute are both businesses that agreed in a contract to handle disputes in the GA Business Court, then both parties in the dispute must agree to use the GA Business Court. If one party initially files with the GA Business Court and a defendant properly objects, the claim will be moved to the superior court or state court.
- What benefits could the GA Business Court offer?
The GA Business Court may offer businesses a faster option for resolving disputes, with a court that is highly knowledgeable and has expertise in the area of Georgia law as applied to businesses. So, even though parties may be feeling a little “sticker shock” with the initial $3,000 filing fee for the GA Business Court, the parties may ultimately save legal fees and businesses expenses simply as a result of getting the dispute handled faster.
- Should businesses revise contract “venue” language to push the parties to the GA Business Court?
Perhaps, but Georgia businesses may want to give the GA Business Court some time before making the GA Business Court the default option in their business agreements. The court is still very new (its first opinion was released only last week). And even if an agreement does not include the GA Business Court as the elected venue in a disputed agreement, the businesses may mutually agree to move to the GA Business Court at a later time.
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection, including many Georgia businesses with respect to establishing new businesses, negotiating business arrangements, mergers and acquisitions. If you need assistance with such a matter, please contact us today.