Legal Question in Business Law in Georgia

Breach of contract on business partnership

Several months ago I bought into a construction-related business. Unfortunately we drew up the ''contract'' ourselves. There are very few clauses, but one of them states that all proceeds will be split 50/50.

Three months into the partnership my partner began collecting checks and living off the money without paying me or our sub-contractors, telling me the whole time that the invoices had not been paid.

He's done this on at least 3 jobs I know of that I've yet to be paid for.

I intend to sue him in Magistrate Court for breach of contract. My main question is do I have to continue to abide by the contract despite his breaching it?

Shortly after finding out about this I went out and formed an LLC on my own (we'd intended to do this but I found out about his embezzlement just before we set it up). Since I'd come up with the company name I used the same name we had intended to use.

A couple of weeks before I found out about all this we received a purchase order for a pretty large job that was made out to the company that I set up, but we did the job together right after I found out about all this.

I contend that he has no rights to that money since it's made out to a company of which I'm the sole officer.


Asked on 9/26/07, 6:42 pm

2 Answers from Attorneys
Scott Riddle Law Office of Scott B. Riddle, LLC

Re: Breach of contract on business partnership

It looks like a mess, and you may have given your partner reason to accuse you of the same thing. Either way, it is beyond what can be resolved here.

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Answered on 9/26/07, 6:46 pm
Glenn M. Lyon, Esq. MacGREGOR LYON, LLC, Business Attorneys

Re: Breach of contract on business partnership

Generally, if one party to a contract breaches, the party is excused from performance, but that is a very general rule. You should have a local business attorney review all of the facts and advise you. You also have to potentially look out for a potential breach of fiduciary duty by you as well.

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Answered on 9/26/07, 6:58 pm


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