GA Code § 13-3-4 (2021)
2021 Georgia Code|Title 13 - Contracts|Chapter 3 - Elements and Formation Generally|Article 1 - General Provisions|§ 13-3-4. Effect of Conditions Precedent or Subsequent Upon Rights of Parties Under Contracts

 Conditions may be precedent or subsequent. A condition precedent must be performed before the contract becomes absolute and obligatory upon the other party. The breach of a condition subsequent may destroy the party's rights under the contract or may give a right to damages to the other party, according to a true construction of the intention of the parties.   (Orig. Code 1863, § 2684; Code 1868, § 2680; Code 1873, § 2722; Code 1882, § 2722; Civil Code 1895, § 3639; Civil Code 1910, § 4224; Code 1933, § 20-110.)   Law reviews.   - For article surveying developments in Georgia contracts law from mid-1980 through mid-1981, see 33 Mercer L. Rev. 67 (1981).   JUDICIAL DECISIONS    Condition precedent must be performed before contract becomes absolute and obligatory upon other party. Roush v. Dan Vaden Chevrolet, Inc., 155 Ga. App. 372, 270 S.E.2d 902 (1980).    Condition precedent requires performance before estate vests. Winn v. Tabernacle Infirmary, 135 Ga. 380, 69 S.E. 557, 32 L.R.A. (n.s.) 512 (1910).    No recovery allowed on contract containing conditions precedent unless such conditions have been complied with. Thurmond v. Sovereign Camp, W.O.W., 171 Ga. 446, 155 S.E. 760 (1930).   Condition precedent in guaranty not shown to be met.    - Plain language of guarantee agreements provided that the lender could enforce the obligations only if the primary obligor failed to take required action within thirty days after the lender demanded it; this was a condition precedent, and the guarantees could not be enforced absent evidence of the lender's compliance pursuant to O.C.G.A. § 13-3-4. Murphy v. BCCTC Associates, Inc., 335 Ga. App. 132, 780 S.E.2d 115 (2015).   Rescission of a contract was inappropriate because of condition precedent.    - Rescission of a contract was inappropriate under O.C.G.A. § 13-4-62 because the purchasers premised the purchasers' rescission for nonperformance claim upon the failure of a contingency that acted as a condition precedent in a purchase agreement and the failure to satisfy the condition precedent, that the franchisor would agree to the purchaser's obtaining the seller's ice cream store franchise, excused the parties' obligations and performance under the purchase agreement. Yi v. Li, 313 Ga. App. 273, 721 S.E.2d 144 (2011).    Plaintiff cannot recover upon express contract, entire and indivisible, unless plaintiff has performed all obligations. Sellers v. City of Summerville, 208 Ga. 361, 67 S.E.2d 137 (1951).    Condition precedent requires performance before performance by other party. Daniel v. Dalton News Co., 48 Ga. App. 772, 173 S.E. 727 (1934); Mutual Benefit Health & Accident Ass'n v. Hulme, 57 Ga. App. 876, 197 S.E. 85 (1938).    Triable issues of fact did not remain on a counterclaim by a former son-in-law (SIL) for breach of contract because the SIL had failed to meet the condition precedent of completing the construction of a home before the former father-in-law could purchase the home; thus, even if a valid contract existed, the contract was not enforceable under O.C.G.A. § 13-3-4. Hunt v. Thomas, 296 Ga. App. 505, 675 S.E.2d 256 (2009).    Pleading and proof requirements relating to conditions precedent, O.C.G.A. §§ 9-11-9 and13-3-4, inapplicable to contractual claim. See Cowen v. Snellgrove, 169 Ga. App. 271, 312 S.E.2d 623 (1983).    Mutual covenants must go to whole consideration on both sides when one is precedent to other. Jordan Realty Co. v. Chambers Lumber Co., 176 Ga. 624, 168 S.E. 601 (1933).    Statutory law recognizes that a right may be lost or destroyed by breach of condition. Franklin v. Mayor of Savannah, 199 Ga. 426, 34 S.E.2d 506 (1945).    Condition subsequent may cause forfeiture of vested estate. Winn v. Tabernacle Infirmary, 135 Ga. 380, 69 S.E. 557, 32 L.R.A. (n.s.) 512 (1910).    Forfeiture provisions in contracts are not favored, and the law inclines to construe such conditions as remediable by damages rather than by forfeiture. J.G.T., Inc. v. Brunswick Corp., 119 Ga. App. 719, 168 S.E.2d 847 (1969).   Preference for conditional subsequent rather than precedent, and for remedy by damages rather than forfeiture.    - Law inclines to construe conditions to be subsequent rather than precedent, and to be remediable by damages, rather than forfeiture. Doe v. Roe, 39 Ga. 202 (1869); Winn v. Tabernacle Infirmary, 135 Ga. 380, 69 S.E. 557, 32 L.R.A. (n.s.) 512 (1910).    Performance of condition precedent may be waived. Heitmann v. Commercial Bank, 6 Ga. App. 584, 65 S.E. 590 (1909).   Condition precedent did not exist.    - Condition precedent requiring performance under O.C.G.A. § 13-3-4 did not exist in a guaranty as the provision at issue regarding invoices being mailed to the surety on a monthly basis employed no explicit words of condition and there were no expressions in the entirety of the guaranty to the effect that the cited provision was to be construed as a condition precedent; as the provision was not ambiguous, the surety could not introduce parol evidence under O.C.G.A. § 13-2-2(1) that the guaranty was only effective if the surety received monthly billings. General Steel, Inc. v. Delta Bldg. Sys., 297 Ga. App. 136, 676 S.E.2d 451 (2009).    Parties to a business buyout agreement mutually assented to all of the essential terms of the complete agreement, as shown by their signatures, so the agreement and the agreement's arbitration clause was valid and enforceable; the agreement addressed a lease assignment, and the assignment was not made a condition precedent to enforceability. Extremity Healthcare, Inc. v. Access to Care America, LLC, 339 Ga. App. 246, 793 S.E.2d 529 (2016).    Party for whose benefit condition precedent operates may be estopped from complaining of nonperformance. Heitmann v. Commercial Bank, 6 Ga. App. 584, 65 S.E. 590 (1909), later appeal, 7 Ga. App. 740, 68 S.E. 51 (1910).    Forfeitures resulting from breach of condition may be expressly released, or waived, and waiver may result from circumstances as well as express language to that effect. Jones v. Williams, 132 Ga. 782, 64 S.E. 1081 (1909).   Plaintiff must allege and prove performance or excuse for nonperformance of condition precedent.    - When plaintiff's right to recover on contract depends on condition precedent to be performed by plaintiff, the plaintiff must allege and prove performance of such condition precedent, or allege a sufficient legal excuse for the condition's nonperformance. Daniel v. Dalton News Co., 48 Ga. App. 772, 173 S.E. 727 (1934); Mutual Benefit Health & Accident Ass'n v. Hulme, 57 Ga. App. 876, 197 S.E. 85 (1938); Irvindale Farms, Inc. v. W.O. Pierce Dairy, Inc., 78 Ga. App. 670, 51 S.E.2d 712 (1949); Sellers v. City of Summerville, 208 Ga. 361, 67 S.E.2d 137 (1951); Wolverine Ins. Co. v. Sorrough, 122 Ga. App. 556, 177 S.E.2d 819 (1970).    When right to recover under contract depends on condition precedent, a petition seeking recovery under such contract must allege compliance with condition precedent or allege a legal excuse for noncompliance. Nutting v. Wilson, 75 Ga. App. 148, 42 S.E.2d 575 (1947).    In order to set out plainly the breach of a bond from which arises a cause of action, it is necessary to show a valid obligation and to do this there must be alleged facts showing performance or a sufficient legal excuse for nonperformance of conditions precedent upon which contract becomes obligatory upon surety. Jenkins v. Gordy, 105 Ga. App. 255, 124 S.E.2d 303 (1962).    Generally, cooperation clauses have been regarded as conditions precedent, so that no rights accrue until the conditions are satisfied. The rule is otherwise when contract or policy does not make performance of obligation a condition precedent. Wolverine Ins. Co. v. Sorrough, 122 Ga. App. 556, 177 S.E.2d 819 (1970).   Words "subject, however, to," create a condition precedent.    - Conditions of a contract are either precedent or subsequent. The words, "subject, however, to," create a condition precedent. Blue Ridge Apt. Co. v. Telfair Stockton & Co., 205 Ga. 552, 54 S.E.2d 608 (1949).    Code makes no distinction between conditions precedent as to personalty and realty. Winn v. Tabernacle Infirmary, 135 Ga. 380, 69 S.E. 557, 32 L.R.A. (n.s.) 512 (1910).   If condition subsequent becomes illegal, no forfeiture results, but if condition precedent, right never vests.    - If condition subsequent becomes illegal, there is no forfeiture; for the estate having once vested, it shall not be divested because party fails to do an illegal or impossible act. But it is different with condition precedent. If that be illegal right never vests. It is not a question of forfeiture, but a failure to do the thing necessary to acquire the right. Dillard v. Manhattan Life Ins. Co., 44 Ga. 119, 9 Am. R. 167 (1871).   When performance of condition subsequent rendered impossible by act of God, nonperformance of condition excused.    - If condition is subsequent, and title has vested subject to be divested in event of nonperformance of condition, and such condition becomes impossible of performance by act of God, nonperformance is excused, and estate which has vested in grantee will not be divested. Winn v. Tabernacle Infirmary, 135 Ga. 380, 69 S.E. 557, 32 L.R.A. (n.s.) 512 (1910).   Doctrine of equitable conversion.    - The presence of an unfulfilled condition precedent in a sales contract provides an exception to the application of the doctrine of equitable conversion so as to prevent the risk of loss - as well as the chance of benefit - from falling on the vendee. Simmons v. Krall, 201 Ga. App. 893, 412 S.E.2d 559 (1991), cert. denied, 201 Ga. App. 904, 412 S.E.2d 559 (1992).   No recovery allowed on contingent fee contract unless specified contingency is brought about.    - An attorney at law cannot recover whole or any part of contingent fee based upon express contract of employment, where contingencies provided for by contract have not been brought about, although entire service of attorney has been performed. Sellers v. City of Summerville, 208 Ga. 361, 67 S.E.2d 137 (1951).   Financing contingency failure did not void contract or right to commission.    - Denial of the sellers' motion for summary judgment was proper because, since the deadline to pay the commission was before the deadline to satisfy the financing contingency, it was clear that the financing contingency was not a condition precedent to the obligation to pay the commission; accordingly, the failure of the financing contingency did not void the entire contract or the company's right to claim a commission under the terms therein. Krogh v. Pargar, LLC, 277 Ga. App. 35, 625 S.E.2d 435 (2005).   Insurance policy may require proof of loss within 90 days as condition precedent to recovery.    - Provisions of insurance policy requiring the furnishing of proof of loss to home office of insurer within 90 days after death of insured from accidental means, and making strict compliance therewith a condition precedent to recovery are valid, and beneficiary is bound thereby unless circumstances are such as to excuse a delay in complying therewith. Mutual Benefit Health & Accident Ass'n v. Hulme, 57 Ga. App. 876, 197 S.E. 85 (1938), later appeal, 60 Ga. App. 65, 2 S.E.2d 750 (1939).    It is inconsequential whether insured's failure to perform condition precedent may not have prejudiced an insurer. Wolverine Ins. Co. v. Sorrough, 122 Ga. App. 556, 177 S.E.2d 819 (1970).    When performance of condition precedent is in issue, court to instruct, without request, on O.C.G.A. § 13-3-4. - If in suit on written contract, sole contested issue was whether or not admitted condition precedent of contract had been performed, it was duty of court, without request, to instruct jury as to substance of legal rules embodied in former Code 1933, §§ 20-109 and 20-110 (see O.C.G.A. §§ 13-1-7 and13-3-4), controlling conditional contracts and conditions precedent. Rice v. Harris, 52 Ga. App. 42, 182 S.E. 404 (1935).   Condition precedent prevented summary judgment.    - Summary judgment was not properly granted in a breach of contract claim because a plain reading of the contract showed that the parties intended that a condition precedent existed, in that the seller should be given an opportunity to find replacement clients before the buyer was entitled to deduct payments due, and the evidence indicated that the buyer never gave the seller the opportunity to do so. Hall v. Ross, 273 Ga. App. 811, 616 S.E.2d 145 (2005).   Payment of rent did not negate conditions precedent of lease.    - Making the first two months' rental payments to lessor did not waive the performance of the condition precedent where the lease agreement stated that the granting of two curb cuts was a condition precedent, and in both letters accompanying the rental payments, lessee stated that the payment of the rent should not have been construed as a waiver of the lessee's right to declare the lease null and void. Chastain v. Spectrum Stores, Inc., 204 Ga. App. 65, 418 S.E.2d 420 (1992).    Lease provision requiring lessor to modify building in accordance with blueprint and city requirements was a covenant, and not words of condition; and the remedy for a breach was an action for damages, and not a forfeiture of the estate for condition broken. Fulton County v. Collum Properties, Inc., 193 Ga. App. 774, 388 S.E.2d 916 (1989).   Directed verdict error if issue remains as to party's good faith in meeting prerequisite.    - Though a buyer's failure to get financing, a condition precedent to a contract, was not a breach of contract, the buyer was required to pursue it diligently, in good faith and, as there was a question of a material issue of fact on the reasonableness of the buyer's actions, a directed verdict was error. Patel v. Burt Dev. Co., 261 Ga. App. 436, 582 S.E.2d 495 (2003).   General allegations of performance of precedent conditions sufficient.   - Performance of conditions precedent was adequately pled by alleging generally that all conditions precedent had been satisfied or waived; the documents did not contradict this allegation. Ralls Corp. v. Huerfano River Wind, LLC, 27 F. Supp. 3d 1303 (N.D. Ga. 2014).    Cited in Mathis v. Harrell, 1 Ga. App. 358, 58 S.E. 207 (1907); Equitable Mfg. Co. v. J.B. Davis Co., 130 Ga. 67, 60 S.E. 262 (1908); Atlantic Steel Co. v. R.O. Campbell Coal Co., 262 F. 555 (N.D. Ga. 1919); Board of Drainage Comm'rs v. Williams, 34 Ga. App. 731, 131 S.E. 911 (1925); Hollomon v. Board of Educ., 168 Ga. 359, 147 S.E. 882 (1929); Pope v. Harper, 40 Ga. App. 573, 150 S.E. 470 (1929); Campbell v. Rybert, 178 Ga. 28, 172 S.E. 52 (1933); Fulenwider v. Fulenwider, 188 Ga. 856, 5 S.E.2d 20 (1939); Webb v. National Life & Accident Ins. Co., 81 Ga. App. 198, 58 S.E.2d 548 (1950); Bregman v. Rosenthal, 212 Ga. 95, 90 S.E.2d 561 (1955); Standard Oil Co. v. Mansfield, 97 Ga. App. 82, 102 S.E.2d 85 (1958); Crescent Brass & Pin Co. v. Owen, 109 Ga. App. 369, 136 S.E.2d 141 (1964); Peacock Constr. Co. v. West, 111 Ga. App. 604, 142 S.E.2d 332 (1965); McMurray v. Bateman, 221 Ga. 240, 144 S.E.2d 345 (1965); Stribling v. Ailion, 223 Ga. 662, 157 S.E.2d 427 (1967); Abco Bldrs., Inc. v. Peavy Concrete Prod., Inc., 123 Ga. App. 167, 179 S.E.2d 695 (1971); Ansley v. Atlanta Suburbia Estates, Ltd., 230 Ga. 630, 198 S.E.2d 319 (1973); Clarke's Super Gas, Inc. v. Tri-State Sys., 129 Ga. App. 650, 200 S.E.2d 472 (1973); Columbia Nitrogen Corp. v. Dean's Power Oil Co., 136 Ga. App. 879, 222 S.E.2d 602 (1975); Maine v. Strange, 138 Ga. App. 24, 225 S.E.2d 484 (1976); Kiser v. Warner Robins Air Park Estates, Inc., 237 Ga. 385, 228 S.E.2d 795 (1976); Washington Rd. Properties, Inc. v. Home Ins. Co., 145 Ga. App. 782, 245 S.E.2d 15 (1978); Walter E. Heller & Co. v. Aetna Bus. Credit, Inc., 158 Ga. App. 249, 280 S.E.2d 144 (1981); Complete Trucklease, Inc. v. Auto Rental & Leasing, Inc., 160 Ga. App. 568, 288 S.E.2d 75 (1981); Riverside Place, Ltd. v. B & D Asphalt Paving, Inc., 161 Ga. App. 773, 288 S.E.2d 730 (1982); Breedlove v. Hurst, 181 Ga. App. 4, 351 S.E.2d 212 (1986); Brooks v. Forest Farms, Inc., 182 Ga. App. 901, 357 S.E.2d 604 (1987); Panfel v. Boyd, 186 Ga. App. 214, 367 S.E.2d 54 (1988); Budget Car Sales v. Boddiford, 189 Ga. App. 316, 375 S.E.2d 632 (1988), cert. denied, 189 Ga. App. 911, 375 S.E.2d 632 (1989); Grier v. Brogdon, 234 Ga. App. 79, 505 S.E.2d 512 (1998); Department of Human Resources v. Citibank F.S.B., 243 Ga. App. 433, 534 S.E.2d 422 (2000); Sheridan v. Crown Capital Corp., 251 Ga. App. 314, 554 S.E.2d 296 (2001); Shah v. Taco Del Sur, Inc., 257 Ga. App. 224, 570 S.E.2d 654 (2002); Woody's Steaks, LLC v. Pastoria, 261 Ga. App. 815, 584 S.E.2d 41 (2003).   RESEARCH REFERENCES   C.J.S.   - 17A C.J.S., Contracts, §§ 325, 338, 339, 400, 407, 412, 436 et seq., 456, 491, 512, 525, 537, 549, 566, 590.   ALR.    - Admissibility of parol evidence to show that a bill or note was conditional, or given for a special purpose, 20 A.L.R. 421.    Conclusiveness of certificate or decision of architect or engineer under building or construction contract, 110 A.L.R. 137.    Waiver of arbitration provision in contract, 117 A.L.R. 301; 161 A.L.R. 1426.    Provision in contract for sale of real property which makes performance conditional upon purchaser's or third person's satisfaction with condition of property, 167 A.L.R. 411.   Vendor and purchaser: contract provision referring to purchaser's uncompleted arrangement for financing balance of purchase price as creating condition precedent, 81 A.L.R.2d 1338.   Construction and effect of clause making lease contingent or conditional upon the lessee obtaining a use permit from public building or zoning authorities, 90 A.L.R.2d 1031.   Necessity for payment or tender of purchase money within option period in order to exercise option, in absence of specific time requirement for payment, 71 A.L.R.3d 1201.   Right of architect to compensation under contractual provision that fee is to be paid from construction loan funds, 92 A.L.R.3d 509.   Limitation to quantum meruit recovery, where attorney employed under contingent fee contract is discharged without cause, 92 A.L.R.3d 690.