chase and Sale Agreement is the inclusion of a new “At- torney’s Fees” section. This new language provides that:
“In any litigation or arbitration arising out of this Agreement, including but not limited to, breach of contract claims between Buyer and Seller and commission claims brought by a broker, the non-prevailing party shall be liable to the prevailing party for its reasonable attorney’s fees and expenses.”
Prior to this change, each party would normally pay
their own attorney’s fees as is normally the case in breach of contract claims. This made it hard for a party to go after a breaching party because even if they won, the costs of bringing the legal action were often prohibitive. Changing this provision will make it easier for the party who honors the contract to pursue a party who breaches the contract. While this may arguably increase litigation, the hope is that it will actually decrease litigation by causing parties who are considering breaching the con- tract to think twice before doing so. This change will also make it easier for brokers to
pursue commission claims because they are now enti- tled to their attorney’s fees if they win the lawsuit.
8 >>Changes to the “Other Terms and Conditions” Section
Several changes were made to this section of the
Purchase and Sale Agreement. First, the “Entire Agree- ment, Modification and Assignment” section was mod- ified to provide that, “This Agreement may not be assigned by Buyer except with the written approval of Seller which may be withheld for any reason or no reason”. The GAR Purchase and Sale Agreement has always provided that the seller’s written permission was required before the contract could be assigned. However, the change in this language fixes a loophole created by Georgia case law where sellers were arguably required to act reason- ably in denying a request of a buyer to assign the con- tract. The change in this language accomplishes the goal of the GAR Forms Committee, which was to give the seller an absolute right to approve or disapprove all assignments for any reason or for no reason.
The second change was made to the “Governing Law
and Interpretation” section by adding what is known as a severability provision. This new clause provides that, “If
C Newhanges New Year,
any provision herein is unenforceable, it shall be severed from this Agreement while the remainder of the Agree- ment shall, to the fullest extent permitted by law, con- tinue to have full force and effect as a binding contract.” This language was added with the intent of trying to save a contract where an unenforceable provision might oth- erwise render the entire contract unenforceable. The third change was to the “No Authority to Bind”
section. This section was modified to clarify that the broker does not have any authority to bind any party hereto “to any contract, provisions herein, amendments hereto or termination hereof”. On occasion, a party to a contract will argue that the broker has authority to bind the client of the broker. This language tries to make it clear that no such authority exists on the part of the broker. In addition to this change, language was also added that notwithstanding the above, “if authorized in this Agreement, Broker shall have the right to accept notice on behalf of a party”. This section was added to clarify that even though the broker cannot bind a party, they do, in certain circumstances, have the right to ac- cept notice on behalf of a party. Finally, a new “Condemnation” section was added which provides as follows:
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