The “Sales” chapter of the Uniform Commercial Code (referred to as “Article 2 of the UCC”), which was adopted by Tennessee in 1963, was designed to bring uniformity and efficiency to transactions involving the sales of goods. Article 2 is thorough, to say the least. In any breach of contract…
Articles Posted in Business Litigation
An LLC Member’s Obligation to Contribute to Loan Debt for Which All Members Are Personally Liable
In Thompson v. Davis, an LLC dispute case, the Court of Appeals of Tennessee issued an opinion that is informative on two different fronts: (1) An LLC member’s obligation to contribute his pro rata share to repay loans taken for the benefit of the LLC, but for which all members…
Preliminary Injunctions in Tennessee Non-Compete Cases: A Comparison of Two Cases
In cases involving non-competition agreements, the battle is almost always fought, and won or lost, at the preliminary injunction stage. Once the court rules on whether the former employer (or other party which has obtained a non-compete agreement) is, or is not, entitled to a preliminary injunction, in my experience,…
When a Written Change Order Requirement May be Waived Under Tennessee Law
Most construction contracts, including those based on the American Institute of Architects (“AIA”) forms, contain terms requiring that any change orders be in writing and signed. Tennessee courts have, with some frequency, not enforced those provisions. Usually, the legal theory used by those courts is waiver. Two Tennessee construction cases…
Contract Still Enforceable Even Though Signed by Only One Party
In a recent breach of contract case, In re Estate of John E. Mayfield, the Court of Appeals of Tennessee reversed the decision of the trial court which had held that a contract for the sale of a storage facility was unenforceable because there was no mutual assent of the…
New Opinion and New Law on Economic Loss Doctrine in Tennessee
The economic loss doctrine prohibits a party, which is seeking only damages for economic loss, from recovering those damages pursuant to a tort cause of action. Under the doctrine, economic losses are the damages suffered by a party, other than damages for personal injury or property damage to “other” property. …
Sales Commissions Denied Where Employee “Procured” Business, but Did Not “Develop” It
The United States District Court for the Northern District of Tennessee decided against a former employee in a breach of contract case for failure to pay sales commissions on the grounds that he was required to do more than just connect the new customer with his employer (“Employer”). It should…
First Material Breach Defense Fails in Tennessee Commission Case
With some frequency, we see the first material breach defense raised in cases where a sales representative is owed commissions. After placing the account, the party with whom it was placed desires to keep the revenue, but resents continuing to pay the agreed commissions. So, it alleges that it should…
General Contractors’ Liability to Subcontractors for Delay Under Tennessee Law
With some frequency, subcontractors incur extra expense, or lose other opportunities to make money, because another subcontractor did not complete its work within the time by which it was represented it would be completed. There are situations in which it is possible that the general contractor might be responsible for…
Supreme Court of Tennessee Issues Opinion Related to Joint Bank Accounts
In a recent opinion in a breach of contract case brought against a Bank by a joint account owner, the Supreme Court of Tennessee overruled two lower courts which had decided in favor of the Bank. For owners of joint bank accounts, often referred to as “joint tenants,” the Court’s…