If the consideration for a promise, apparently good or valuable, fails either wholly or in part before the promise is executed, the failure of consideration may be pleaded in defense to the promise as provided for in subsection (c) of Code Section 9-11-8. If the failure of consideration is partial, an apportionment shall be made according to the facts of each case.
(Orig. Code 1863, § 2712; Code 1868, § 2706; Code 1873, § 2748; Code 1882, § 2748; Civil Code 1895, § 3665; Civil Code 1910, § 4250; Code 1933, § 20-310.)
Law reviews.- For article discussing failure of consideration, see 4 Mercer L. Rev. 327 (1953). For comment on Miami Butterine Co. v. Franki, 190 Ga. 88, 8 S.E.2d 398 (1940), see 3 Ga. B.J. 51 (1941).
JUDICIAL DECISIONS
Total or partial failure of consideration is permissible defense to action founded upon any contract. Robbins v. Hays, 107 Ga. App. 12, 128 S.E.2d 546 (1962).
Although an equipment note was supported by ample consideration when the note was executed, there was at least a partial failure of consideration after that time due to a corporate defendant's failure or refusal to deliver possession of five pieces of the equipment, or to transfer title to any of the equipment, to the deceased. Midway R.R. Constr. Co. v. Beck, 281 Ga. App. 412, 636 S.E.2d 110 (2006).
Guarantor's assertion of defense.
- Defense of failure of consideration is not personal to a principal and thus is an available defense to a guarantor. Jones v. Dixie O'Brien Div., 174 Ga. App. 67, 329 S.E.2d 256 (1985).
Failure of consideration must be specially pleaded. McGehee v. Rinker, 9 Ga. App. 147, 70 S.E. 962 (1911).
Failure of consideration should be set up by proper plea, not by general demurrer. Planters Rural Tel. Coop. v. Chance, 105 Ga. App. 270, 124 S.E.2d 300 (1962).
Plea of failure of consideration must set out fully facts relied on to support the defense. Martin v. Bartow Iron Works, 35 Ga. 320, 16 F. Cas. 888 (N.D. Ga. 1867); Taylor v. Hinton, 66 Ga. 743 (1881).
Parol evidence is admissible to show partial or total failure of consideration of contract. Pitts v. Allen, 72 Ga. 69 (1883); Reese v. Strickland, 96 Ga. 784, 22 S.E. 323 (1895).
In an action to recover on two promissory notes, because material fact issues remained regarding the consideration given for the promissory notes, creating an ambiguity for which parol evidence was admissible, and as to whether the notes were signed as part of the same transaction, summary judgment to either the lender or the debtor was inappropriate. Foreman v. Chattooga Int'l Techs., Inc., 289 Ga. App. 894, 658 S.E.2d 470 (2008).
Plea of failure of consideration does not add to or vary contract between parties. Aultman & Co. v. Mason, 83 Ga. 212, 9 S.E. 536 (1889).
Total failure of consideration warrants directed verdict.
- When it appears, from uncontradicted evidence, that there is a total failure of consideration as to the contract sued on, it is not error to direct a verdict in favor of defendant. Reynolds v. Nevin, 1 Ga. App. 269, 57 S.E. 918 (1907).
Defense of constructive eviction is based upon principle of failure of consideration.
- Constructive eviction is a specialized defense in rent cases grounded on general principles of contract law respecting failure of consideration, and may involve either total or partial failure of consideration. Piano & Organ Ctr., Inc. v. Southland Bonded Whse., Inc., 139 Ga. App. 480, 228 S.E.2d 615 (1976).
Teacher's misrepresentations about teaching qualifications as basis for defense of failure of consideration.
- It is a good defense to action by teacher upon written contract to pay teacher stipulated sum per month for services in teaching at private school, that in order to induce the person by whom the teacher was employed to sign the contract, the teacher falsely and fraudulently represented to the person that the teacher possessed certain specified and essential qualifications as a teacher, which the teacher did not in fact possess. Such defense is available to show failure of consideration, either total or partial. Connor v. Lasseter, 98 Ga. 708, 25 S.E. 830 (1896).
Failure to pay consideration promised, although constituting breach, does not render conveyance invalid for lack of consideration. Jones v. Brawner, 151 Ga. App. 437, 260 S.E.2d 385 (1979).
Trial court properly granted summary judgment to an attorney in the attorney's action to collect fees due under a written fee agreement with a former client as the attorney provided the services outlined within the contract, and the former client failed to produce any competent evidence supporting an affirmative defense of failure of consideration after the attorney made a prima facie case for summary judgment. Browning v. Alan Mullinax & Assocs., P.C., 288 Ga. App. 43, 653 S.E.2d 786 (2007).
No failure of consideration.
- Summary judgment in favor of the lessor on the lessor's breach of the lease claim was properly granted because there was no failure of consideration as the evidence showed that the lessor did provide the professional corporation with a functionally operational imaging center as required under the lease. Citrus Tower Blvd. Imaging Ctr. v. David S. Owens, MD, PC, 325 Ga. App. 1, 752 S.E.2d 74 (2013).
Trial court properly granted summary judgment to the appellee on the appellee's suit to recover on a promissory note executed by the appellant as there was not a complete failure of consideration because the evidence showed that the appellant received full consideration as the appellant executed a promissory note for $625,000 to purchase 500,000 shares of the appellee's stock at $1.25 a share; the appellant testified that the shares had some value at the time the appellant executed the note; and even the testimony of the appellant's expert that the shares were worth $0.01 was evidence that the shares had at least a nominal fair-market value. Hall v. Prosero, Inc., 333 Ga. App. 454, 774 S.E.2d 216 (2015).
Trial court properly granted summary judgment to the appellee on the court's suit to recover on a promissory note executed by the appellant because the appellant could not show a partial failure of consideration when there was no consideration wholly valueless as to any part of the promissory note but, instead, as alleged by the appellant, the consideration was simply inadequate in point of actual total value to the note. Hall v. Prosero, Inc., 333 Ga. App. 454, 774 S.E.2d 216 (2015).
Cited in Williams & Lee v. Wylley, 45 Ga. 580 (1872); Seawright v. Dickson, 16 Ga. App. 436, 85 S.E. 625 (1915); Ford v. Serenado Mfg. Co., 27 Ga. App. 535, 109 S.E. 415 (1921); Spells v. Swift & Co., 34 Ga. App. 620, 130 S.E. 593 (1925); Branch v. Blackshear Mfg. Co., 48 Ga. App. 356, 172 S.E. 586 (1934); A.D.L. Sales Co. v. Gailey, 48 Ga. App. 798, 173 S.E. 734 (1934); Citizens' Bank v. Hall, 179 Ga. 662, 177 S.E. 496 (1934); Barnes v. Goodner, 77 Ga. App. 448, 49 S.E.2d 128 (1948); Hall v. Southern Sales Co., 81 Ga. App. 392, 58 S.E.2d 925 (1950); Romine, Inc. v. Savannah Steel Co., 117 Ga. App. 353, 160 S.E.2d 659 (1968); Wenke v. Norton, 120 Ga. App. 70, 169 S.E.2d 663 (1969); Anchor Sign Co. v. PS Heating & Air Conditioning Co., 125 Ga. App. 207, 186 S.E.2d 892 (1971); Coast Scopitone, Inc. v. Self, 127 Ga. App. 124, 192 S.E.2d 513 (1972); Olivetti Leasing Corp. v. Metro-Plastics, Inc., 128 Ga. App. 401, 196 S.E.2d 686 (1973); Hathaway v. Gorfine, 134 Ga. App. 748, 216 S.E.2d 338 (1975); Stuckey v. Kahn, 140 Ga. App. 602, 231 S.E.2d 565 (1976); Pepsico Truck Rental, Inc. v. Eastern Foods, Inc., 145 Ga. App. 410, 243 S.E.2d 662 (1978); Henco Adv., Inc. v. Geographics, Inc., 155 Ga. App. 571, 271 S.E.2d 704 (1980); Morgan v. Hawkins, 155 Ga. App. 836, 273 S.E.2d 221 (1980); Jim Walter Homes, Inc. v. Strickland, 185 Ga. App. 306, 363 S.E.2d 834 (1987); Imex Int'l v. Wires Eng'g, 261 Ga. App. 329, 583 S.E.2d 117 (2003); Han v. Han, 295 Ga. App. 1, 670 S.E.2d 842 (2008).
RESEARCH REFERENCES
Am. Jur. 2d.
- 17 Am. Jur. 2d, Contracts, §§ 86, 87, 397 et seq.
C.J.S.- 17 C.J.S., Contracts, §§ 71, 129 et seq. 17A C.J.S., Contracts, §§ 573, 583, 604.
ALR.
- Necessity of consideration to support option under seal, 21 A.L.R. 137.
Death of obligor as affecting executory obligation in consideration of promise to marry obligor, 34 A.L.R. 86.
Rights and remedies in respect of the property upon the death, in the lifetime of grantor, of the grantee in a deed in consideration of future support, 34 A.L.R. 136.
Forbearance to sue on original obligation as consideration for note payable on demand, 141 A.L.R. 1481.
Rights of parties to contract the performance of which is interfered with or prevented by war conditions or acts of government in prosecution of war, 150 A.L.R. 1413; 151 A.L.R. 1447; 152 A.L.R. 1447; 153 A.L.R. 1417; 154 A.L.R. 1445; 155 A.L.R. 1447; 156 A.L.R. 1446; 157 A.L.R. 1446; 158 A.L.R. 1446.
Statute providing for apportionment between lessor and lessee of a tax imposed upon the producer of oil, gas, or other natural production as violation of the constitutional provision against impairment of the obligation of contracts, 160 A.L.R. 980.
Basis of recovery for partial performance of contract, full performance of which is prevented by destruction of subject matter, 170 A.L.R. 980.
Broker's liability to prospective purchaser for refund for deposit or earnest money where contract fails because of defects in vendor's title, 38 A.L.R.2d 1382.
Measure and elements of damages in action against physician for breach of contract to achieve particular result or cure, 99 A.L.R.3d 303.