(Orig. Code 1863, § 2687; Code 1868, § 2683; Code 1873, § 2725; Code 1882, § 2725; Civil Code 1895, § 3643; Civil Code 1910, § 4228; Code 1933, § 20-112.)
Law reviews.- For annual survey of law on labor and employment law, see 62 Mercer L. Rev. 181 (2010).
JUDICIAL DECISIONSANALYSIS
General Consideration
Discussion of criterion for determining whether contract is entire or severable.
- See Dolan v. Lifsey, 19 Ga. App. 518, 91 S.E. 913 (1917); Carlton v. Moultrie Banking Co., 170 Ga. 185, 152 S.E. 215 (1930); Burns v. Mitchell, 55 Ga. App. 862, 191 S.E. 870 (1937); Evans v. Hartley, 57 Ga. App. 598, 196 S.E. 273 (1938); Piedmont Life Ins. Co. v. Bell, 103 Ga. App. 225, 119 S.E.2d 63 (1961); Yeargin v. Bramblett, 115 Ga. App. 862, 156 S.E.2d 97 (1967).
Issue of severability of contract is determined by intention of parties, as evidenced by the terms of the contract. Horne v. Drachman, 247 Ga. 802, 280 S.E.2d 338 (1981).
Whether contract is upon one consideration important in ascertaining parties' intent.
- If contract is upon one consideration, this fact is of great importance in determining whether parties intended contract to be entire or severable. Bearden Mercantile Co. v. Madison Oil Co., 128 Ga. 695, 58 S.E. 200 (1907); Spalding County v. Chamberlain & Co., 130 Ga. 649, 61 S.E. 533 (1908).
Contract of guaranty as entire or divisible, depending on when consideration passes.
- There is entire consideration in guaranty contract when all of it passes at time of execution of contract, but when guaranty is to apply not only to indebtedness already incurred, but as well to future obligations, it is divisible and separable. Haynie v. First Nat'l Bank, 117 Ga. App. 766, 162 S.E.2d 27 (1968).
Global settlement agreements would tend to be entire rather than severable; thus, the trial court erred in ruling that an agreement was severable since appellee's agreement to execute the mutual releases provided part of the consideration for appellant's agreement to pay money. Imerman v. London, 255 Ga. App. 140, 564 S.E.2d 544 (2002).
Courts are not bound by severability provisions in antenuptial agreements.
- Husband's argument that an antenuptial agreement contained a severability clause and that, under O.C.G.A. § 13-1-8(a), the failure to abide by the portion of the agreement concerning attachment of lists showing property owned or held did not void the entire agreement was without merit; the trial court was not bound by the language of the agreement as to severability, but the question was whether there was a misrepresentation or nondisclosure of a material fact. Alexander v. Alexander, 279 Ga. 116, 610 S.E.2d 48 (2005).
Cited in Harden v. Lang, 110 Ga. 392, 36 S.E. 100 (1900); Atlantic Coast Line R.R. v. Sweat, 177 Ga. 698, 171 S.E. 123 (1933); Gower v. Ozmer, 55 Ga. App. 81, 189 S.E. 540 (1936); Fulenwider v. Fulenwider, 188 Ga. 856, 5 S.E.2d 20 (1939); Stafford v. Birch, 189 Ga. 405, 5 S.E.2d 744 (1939); Irvindale Farms, Inc. v. W.O. Pierce Dairy, Inc., 78 Ga. App. 670, 51 S.E.2d 712 (1949); Blue Ridge Apt. Co. v. Telfair Stockton & Co., 205 Ga. 552, 54 S.E.2d 608 (1949); Dumas v. Dumas, 84 Ga. App. 265, 66 S.E.2d 129 (1951); Littlegreen v. Gardner, 208 Ga. 523, 67 S.E.2d 713 (1951); Southern Airways Co. v. DeKalb County, 102 Ga. App. 850, 118 S.E.2d 234 (1960); Spindel v. National Homes Corp., 110 Ga. App. 12, 137 S.E.2d 724 (1964); Union Camp Corp. v. Dyal, 460 F.2d 678 (5th Cir. 1972); Clarke's Super Gas, Inc. v. Tri-State Sys., 129 Ga. App. 650, 200 S.E.2d 472 (1973); Austin v. Benefield, 140 Ga. App. 96, 230 S.E.2d 16 (1976); Dozier v. Shirley, 240 Ga. 17, 239 S.E.2d 343 (1977); Genins v. Geiger, 144 Ga. App. 244, 240 S.E.2d 745 (1977); Toole v. Brownlow & Sons Co., 151 Ga. App. 292, 259 S.E.2d 691 (1979); O.H. Carter Co. v. Buckner, 160 Ga. App. 627, 287 S.E.2d 636 (1981); Atlanta Professional Ass'n for Thoracic & Cardiovascular Surgery, P.C. v. Allen, 163 Ga. App. 400, 294 S.E.2d 647 (1982); Kem Mfg. Corp. v. Sant, 182 Ga. App. 135, 355 S.E.2d 437 (1987); Gray v. Higgins, 205 Ga. App. 52, 421 S.E.2d 341 (1992); Toncee, Inc. v. Thomas, 219 Ga. App. 539, 466 S.E.2d 27 (1995); Turnipseed v. Jaje, 267 Ga. 320, 477 S.E.2d 101 (1996); Chaichimansour v. Pets Are People, Too, No. 2, Inc., 226 Ga. App. 69, 485 S.E.2d 248 (1997); Penso Holdings, Inc. v. Cleveland, 324 Ga. App. 259, 749 S.E.2d 821 (2013); SunTrust Bank v. Bickerstaff, 349 Ga. App. 794, 824 S.E.2d 717 (2019), cert. denied, No. S19C1080, 2019 Ga. LEXIS 862 (Ga. 2019).
Entire Contracts
If contract was to take whole or none, then contract would be entire. Horne v. Drachman, 247 Ga. 802, 280 S.E.2d 338 (1981).
If each party's promise is only part consideration for other party's promise, contract is entire. Pittsburgh Plate Glass Co. v. Jarrett, 42 F. Supp. 723 (M.D. Ga. 1942), modified, 131 F.2d 674 (5th Cir. 1942).
An entire contract is one in which consideration is entire on both sides. Entire fulfillment of promise by either in absence of any agreement to contrary, or waiver, is condition precedent to fulfillment of any part of promise by other. Carlton v. Moultrie Banking Co., 170 Ga. 185, 152 S.E. 215 (1930).
In indivisible contract, fulfillment of promise by either is condition precedent to performance by other.
- In indivisible contract, entire fulfillment of promise by either, in absence of any agreement to contrary, or waiver, is condition precedent to fulfillment of any part of promise by the other. Hill v. Balkcom, 79 Ga. 444, 5 S.E. 200 (1888); Dolan v. Lifsey, 19 Ga. App. 518, 91 S.E. 913 (1917); Williams v. Claussen-Lawrence Constr. Co., 120 Ga. App. 190, 169 S.E.2d 692 (1969).
Contract may be an entire one and yet contain stipulation for delivery by installments. Branch, Sons & Co. v. Palmer, 65 Ga. 210 (1880).
Entire contract not apportionable at law or in equity.
- Contract to pay a gross sum for certain and definite consideration is an entire contract, and is not apportionable either at law or in equity. Carlton v. Moultrie Banking Co., 170 Ga. 185, 152 S.E. 215 (1930); Williams v. Claussen-Lawrence Constr. Co., 120 Ga. App. 190, 169 S.E.2d 692 (1969).
Entire contract void in part is void in toto.
- Contract made for sale of real and personal property, which is entire and founded upon one and same consideration, if void in part is void in toto. Mims v. Gillis, 19 Ga. App. 53, 90 S.E. 1035 (1916).
Repudiation of one of two vital obligations in an entire contract is repudiation of all of contract. Unity Life Ins. Co. v. Beasley, 64 Ga. App. 277, 13 S.E.2d 32 (1941).
Where contract is entire, purchaser cannot accept part of goods and reject remainder.
- Where purchaser rejects part of goods sold under an entire contract, because rejected goods are of quality inferior to those contracted for, purchaser is not bound for full amount of agreed price, but is to be treated as if the purchaser had accepted goods of quality inferior to that covered by express warranty. Fleischer Knitting Mills, Inc. v. Greenberg, 54 Ga. App. 552, 188 S.E. 458 (1936).
Where single promise based on single consideration, whole contract void if either is illegal.
- Where agreement consists of single promise, based on single consideration, if either is illegal, the whole contract is void. But where agreement is founded on legal consideration containing a promise to do several things or to refrain from doing several things, only some of which are illegal, promises which are not illegal will be held valid. Martell v. Atlanta Biltmore Hotel Corp., 114 Ga. App. 646, 152 S.E.2d 579 (1966).
Statute of limitations begins running when work under indivisible contract terminates or is completed.
- As against cause of action to recover compensation for services rendered under an entire indivisible contract, statute of limitations begins to run when services are terminated or work is completed, although work may consist of numerous parts or items, and although contract provides that compensation shall be made at stated intervals, or in installments. Burns v. Mitchell, 55 Ga. App. 862, 191 S.E. 870 (1937).
Six year limitation period was applicable as contract obligation was entire.
- Contract obligation was entire as the contractual consideration at issue was a single sum certain to be paid in one lump sum; the fact that the whole sum could have been due at different times, whichever came first, according to the contract, did not render the contract divisible; accordingly, the six year statute of limitations found in O.C.G.A. § 9-3-24 for breaches of written contracts applied and time barred defendant's counterclaim. Bridge Capital Investors II v. Small, F. Supp. 2d (M.D. Ga. Aug. 11, 2005).
Where claims arise from entire contract for continuous services, demand will be considered entire. Burns v. Mitchell, 55 Ga. App. 862, 191 S.E. 870 (1937).
In action on entire contract, defendants pleading breach by plaintiff need not allege amount damaged.
- Where in contract which is basis of action was an entire contract, and defendants can plead that plaintiff had breached in certain particulars, setting the particulars forth, it is not incumbent upon the defendants to allege amount that the defendants had been damaged by reason of such breaches. Dolan v. Lifsey, 19 Ga. App. 518, 91 S.E. 913 (1917).
On facts, contract of sale covering lot of goods not severable. Smith v. Harrison, 26 Ga. App. 325, 106 S.E. 191 (1921); Fleisher Knitting Mills, Inc. v. Greenberg, 54 Ga. App. 552, 188 S.E. 458 (1936).
In entire contract, appreciable material deficiency in quantity delivered defeats recovery by seller.
- Where contract is entire any appreciably material deficiency in quantity of goods delivered would ordinarily defeat recovery by seller, since whole contract must stand or fall together. Frank & Meyer Neckwear Co. v. White, 29 Ga. App. 694, 116 S.E. 855 (1923), later appeal, 32 Ga. App. 613, 124 S.E. 116 (1924).
Note for purchase price, stated only in aggregate, is an entire contract.
- In suit upon note for purchase price of various kinds and quantities of fertilizers, price of which is stated only in aggregate, there can be no recovery for any of purchase price if sold in violation of law. The contract sued upon, being entire, must fail altogether if consideration is in any part illegal. Bartow Guano Co. v. Adair, 29 Ga. App. 644, 116 S.E. 342 (1923).
Contract for complete construction of building at stipulated price not divisible.
- Contract whereby one agrees to furnish all material and labor for construction of building, and to turn over the building in finished state to another on payment of stipulated price, such contract is an entire one and is not to be held as divisible because the contract contains a stipulation that when building has arrived at certain stage of completion owner may suspend further work, and that, if owner elects to do so, a stated sum is to be compensation for labor done and material furnished. Hunnicutt & Bellingrath Co. v. Van Hoose, 111 Ga. 518, 36 S.E. 669 (1900).
Lease contract held to be entire.
- Lease contract was entire and not severable, where the agreement provided a lump sum monthly rental rate of $2,250 for all laboratory "systems" provided, but did not segregate the laboratory equipment nor assign a monthly rental value for each system, and the lease designated a single sale price for the equipment. Medical Doctor Assocs. v. Lab-Quip Co., 201 Ga. App. 880, 412 S.E.2d 625 (1991).
Leasehold use limited.
- A requirement in a lease that the space be used solely as an attorney's office cannot be considered merely an ancillary covenant but must be considered central to the contract. Merren v. Plaza Towers Ltd. Partnership, 161 Ga. App. 543, 287 S.E.2d 771 (1982).
Tuition contract stipulating no reduction in charges although payable periodically upon voluntary withdrawal not severable.
- Where parties to contract for tuition contemplate that school contracts for services a year in advance and that places are limited, and where contract incorporates provision that charges will not be reduced upon voluntary withdrawal, contract is entire and not severable notwithstanding that payments are payable for separate periods of academic year. Matthews v. Riverside Academy, 45 Ga. App. 30, 163 S.E. 238 (1932).
Employment contract containing anticompetitive clause and pretermination notice requirement not severable.
- Contract of employment containing restrictive provisions as to right of employee to work for competitor of employer in territory within one year after termination of employment and requiring one week's notice before employment can be terminated is an entire contract and the contract's provisions must stand or fall together. If employer discharges employee in violation of provision requiring one-week's notice, the employer is not entitled, in equity, to enjoin employee from working for competitor. Felton Beauty Supply Co. v. Levy, 198 Ga. 383, 31 S.E.2d 651 (1944).
Employment contracts.
- It was a significant indication of the parties' intent that the employment agreement did not contain a severability clause; thus, the contract was obviously intended to be entire, and the defective provisions go to the essential elements of the contract: the duration of the contract and the employee's period of employment and salary were not subsidiary to the essential purpose of the contract. Therefore, the indefinite statements regarding the employee's duties, the term of the employee's employment, and the employee's salary made the contract unenforceable. Key v. Naylor, Inc., 268 Ga. App. 419, 602 S.E.2d 192 (2004).
Contractor cannot recover on indivisible contract absent performance in accordance with contract's terms.
- Contract to perform certain work on building which is entire and not divisible cannot be recovered upon by contractor until the contractor has performed work in accordance with terms of contract. Barnes v. Goodner, 77 Ga. App. 448, 49 S.E.2d 128 (1948).
Absent acceptance of part performance, contractor denied recovery on contract for labor or materials.
- Absent acceptance of part performance, contractor failing to perform work in accordance with contract cannot recover on contract for labor performed or material furnished. Hillhouse v. Adams, 44 Ga. App. 315, 161 S.E. 274 (1931).
No recovery on indivisible employment contract by rightfully discharged employee for partial performance.
- Where contract between employer and employee is an entire one, and employee is rightfully discharged, in suit by the employee on contract there can be no recovery for partial performance. Parker v. Farlinger, 122 Ga. 315, 50 S.E. 98 (1905).
No recovery on indivisible contract for part performance, although action in quantum meruit may be for accepted part performance. Dolan v. Lifsey, 19 Ga. App. 518, 91 S.E. 913 (1917).
Severable Contracts
Contract containing mutual, legal promises and illegal promises is severable and former are enforceable.
- Where contract contains mutual, binding, legal promises independent of two allegedly illegal, void provisions, the contract is severable, and legal portions are not annulled by illegal ones and can be enforced. Martell v. Atlanta Biltmore Hotel Corp., 114 Ga. App. 646, 152 S.E.2d 579 (1966).
Because the settlement agreement did not consist of a single promise based on a single consideration, but rather was founded on a legal consideration containing a promise to do several things or to refrain from doing several things and only the promise regarding college education payments was legally unenforceable, the remaining promises, that were not illegal, remained valid. Charles v. Leavitt, 264 Ga. 160, 442 S.E.2d 241 (1994).
Waiver of nonwaivable matter does not void whole contract if severable.
- When loan agreement contains waiver of provision for notice of sale, which was nonwaivable under former Code 1933, § 20-305, unenforceable nature of this clause did not void entire contract if contract was severable. Lowe v. Termplan, Inc., 144 Ga. App. 671, 242 S.E.2d 268 (1978).
A vehicle loaner agreement between a garage and the garage's customer could be severed to eliminate the waiver by the customer of the garage's liability insurance, which would violate both statute and public policy, and allow the remainder of the contract, which did not violate a statute or public policy, to remain enforceable. Nolley v. Maryland Cas. Ins. Co., 222 Ga. App. 901, 476 S.E.2d 622 (1996).
Party free to accept performance of remaining part of severable contract although severed portion illegal.
- Where contract is severable, even if there is partial failure of consideration because of illegality, one party to contract may not object if opposite party is willing to accept performance of remaining portions of contract. Jones v. Clark, 147 Ga. App. 657, 249 S.E.2d 619 (1978).
Mere statement of two accounts does not make defendant debtor of one party alone where account of each arose out of separate contract for defendant's services. Oliver v. Hall County Mem. Hosp., 65 Ga. App. 59, 15 S.E.2d 257 (1941).
Statement containing doctor's and hospital's accounts does not necessarily render them indivisible.
- Mere presentation by hospital to patient of single statement containing account of doctor and account of hospital does not necessarily merge account of doctor into indivisible part of account of hospital, and, upon failure of defendant to pay either or both accounts, doctor or hospital may subsequently sue in doctor's or hospital's own name for value of doctor's or hospital's services, and this is true even though in meantime either may have brought suit in their own name and recovered for their services only. Oliver v. Hall County Mem. Hosp., 65 Ga. App. 59, 15 S.E.2d 257 (1941).
Option to purchase not severable from unenforceable contract.
- A trial court erred in finding that a lease-purchase agreement was enforceable because, though it satisfied the statute of frauds, it was invalid for failure of consideration in that the lessee/proposed purchaser never paid the rent owed nor any of the property taxes, which not only invalidated the agreement but voided the purchase option under O.C.G.A. § 13-1-8(a). Further, the trial court erred in holding that the lessee/proposed purchaser was entitled to specific performance of the agreement based on repairs made since there was no legal authority to support the trial court's proposition that part performance of an otherwise unenforceable written agreement, as modified by subsequent oral agreements between the parties, transformed it into an enforceable parol contract. Estate of Ryan v. Shuman, 288 Ga. App. 868, 655 S.E.2d 644 (2007), cert. denied, No. S08C0664, 2008 Ga. LEXIS 482 (Ga. 2008).
On facts, contract divisible. Bearden Mercantile Co. v. Madison Oil Co., 128 Ga. 695, 58 S.E. 200 (1907); Atlantic Steel Co. v. R.O. Campbell Coal Co., 262 F. 555 (N.D. Ga. 1919).
Contract with multiple promises based upon multiple considerations severable.
- Although an arbitration provision in an employment agreement was found to be unenforceable because the agreement was not initialed by all of the signatories, as required by O.C.G.A. § 9-9-2(c)(9), the remainder of the agreement was enforceable because the agreement was severable from the arbitration clause; it was found that the contract was severable under O.C.G.A. § 13-1-8(a) because the contract contained multiple promises based upon multiple consideration. ISS Int'l Serv. Sys. v. Widmer, 264 Ga. App. 55, 589 S.E.2d 820 (2003).
Causes of action accrue from time to time as services rendered under severable contract.
- Where account grew out of implied undertakings that amounted to severable contract, it follows that rights of action accrued and statute of limitation began to run as services were rendered and charges were made from time to time on the account. Yeargin v. Bramblett, 115 Ga. App. 862, 156 S.E.2d 97 (1967).
Because the arbitration agreements contained a central promise, favored by federal law, to arbitrate their employment agreement, and an ancillary agreement to initiate arbitration claims within a year, the court inferred from the nature and structure of the agreement that the parties intended for the promises to be separate, so the agreement to arbitrate was severable from the agreement to initiate arbitration within a year, and on this basis the agreements between the parties to arbitrate the dispute had to be enforced unless there was an independent state law basis for refusing to enforce the contract. Zulauf v. Amerisave Mortg. Corp., F. Supp. 2d (N.D. Ga. Nov. 23, 2011).
Provision regarding payment of development impact fees severable.
- Trial court did not err by denying a county's motion for summary judgment and concluding that the county's obligation to provide water and sewer lines under a 2006 agreement was not affected by the Georgia Court of Appeal's decision in another case invalidating the prepayment of development impact fees under a similar agreement because the invalid portion of the contract regarding the impact fees was severable under the agreement, which included an explicit severability clause. Effingham County v. Roach, 329 Ga. App. 805, 764 S.E.2d 600 (2014), overruled on other grounds, Rivera v. Washington, 298 Ga. 770, 784 S.E.2d 775 (2016).
Amusement machine location lease agreement.- Lease was severable. The sum to be paid was not fixed but varied based on the revenue generated by the game machines; the three different locations could operate independently of one another under the lease so separate causes lay for each breach. Merchant v. Ultra Grp. of Cos. (In re Al-Karim, Inc.), 529 Bankr. 366 (Bankr. N.D. Ga. 2015).
Class action waiver contained in unenforceable jury trial waiver was not severable.
- In a bank customer's action alleging that a bank's charges for overdraft of ATM funds were usurious interest, the customer agreements' waiver of jury trials were not enforceable because the agreements' class-action waiver was not an independent provision and was contained in the unenforceable jury trial waiver provision, it was not severable. SunTrust Bank v. Bickerstaff, 349 Ga. App. 794, 824 S.E.2d 717 (2019).
Contract was severable and enforceable.
- Option contract, in which potential buyers of hotel were given a 60-day option to obtain financing in return for $10,000, was severable and enforceable; buyers were not allowed to escape contract obligations for lack of a specified interest rate in contract. Bulloch South, Inc. v. Gosai, 250 Ga. App. 170, 550 S.E.2d 750 (2001).
Under O.C.G.A. § 13-1-8(a), it was proper to sever an illegal limiting provision of arbitration clause and to then compel arbitration of discrimination claims because the employment agreement contained a severability clause and Georgia law provided that a valid part of a contract was not invalidated by a separate part that was unenforceable and it was the intent of the parties to allow severance. Jackson v. Cintas Corp., 425 F.3d 1313 (11th Cir. 2005).
Running of limitation.
- An action alleging that defendant company breached a sales representative agreement by removing areas from the representative's territory and by repeatedly reducing the commission rate below that provided in the agreement was not time barred as to sales within the six-year limitation period prior to the suit, even though the removal of territory and rate reduction occurred more than six years before the suit was brought, since the commissions were not due until sales were consummated. Douglas & Lomason Co. v. Hall, 212 Ga. App. 475, 441 S.E.2d 870 (1994).
RESEARCH REFERENCES
Am. Jur. 2d.
- 17 Am. Jur. 2d, Contracts, §§ 239 et seq., 315 et seq. 29 Am. Jur. 2d, Evidence, § 860.
C.J.S.- 17A C.J.S., Contracts, §§ 331 et seq., 458, 502, 511, 627.
ALR.
- Right of beneficiary to enforce contract between third persons to provide for him by will, 2 A.L.R. 1193; 33 A.L.R. 739; 73 A.L.R. 1395.
Failure to comply with statute of frauds as to a part of a contract within the statute as affecting the enforceability of another part not covered by the statute, 71 A.L.R. 479.
Severability of invalid arbitration provisions of contract, 90 A.L.R. 1305.
Validity of stipulation, in contract between attorney and client, prohibiting or restricting right of latter to compromise without former's consent, and effect of invalid stipulation in regard upon rest of contract, 121 A.L.R. 1122.
Entirety or divisibility of building construction contract for two or more separate buildings, 147 A.L.R. 933.
Severability of provisions in collective bargaining labor contracts, 14 A.L.R.2d 846.
Liabilities or risks of loss arising out of contract for repairs or additions to, or installations in, existing building which, without fault of either party, is destroyed pending performance, 28 A.L.R.3d 788.
Construction of provision in real-estate mortgage, land contract, or other security instrument for release of separate parcels of land as payments are made, 41 A.L.R.3d 7.
Limitation to quantum meruit recovery, where attorney employed under contingent fee contract is discharged without cause, 92 A.L.R.3d 690.