Missing Contracts and ‘naked Promises’ — Lessons From a Peculiar Case Recently Adjudicated by the 11th Circuit Court of Appeals

A character in a famous 1980s comedy film, at one point in the movie, looked at his friend and opined that “strange things are afoot.” Even if your business hasn’t come into contact with time-travelers from the future, that doesn’t mean that you may not face strange things from time to time, including peculiar legal claims against your business. Whether strange or mundane, never ignore or otherwise fail to act on these legal matters. Instead, retain an experienced Atlanta commercial contracts lawyer and get them dealt with.

Depending on the specifics, there may be ways to handle these kinds of lawsuits very efficiently. Take, for example, a contract dispute involving a world-famous rapper that went before the 11th Circuit Court of Appeals… twice.

The rapper was the defendant. The plaintiff was a woman with whom the rapper allegedly had a romantic relationship before his emergence into stardom. The woman, who did not retain an attorney, asserted that a 1992 agreement called for her to receive $40 million “after 20 years was up.” She alleged that a written contract (signed by her and the rapper and witnessed by another man) existed, but she did not provide the court with a copy of that 1992 document.

Those were pretty much her only factual allegations. Unsurprisingly, the trial court and the 11th Circuit Court ruled against the woman each time.

Dealing With a Breach Claim Where the Underlying Contract is Absent

Even if the contract document at the center of a dispute has been lost or is otherwise missing, there are still certain factual things a plaintiff can — and should — plead. There are things like the date(s) the parties negotiated the deal, the date the parties signed the agreement, or details surrounding “discussions, negotiations, or bargained-for terms.” These are things that a plaintiff can use to establish that a binding agreement existed, even in the absence of the contract document itself. These were also things that the woman in this case didn’t have, which contributed to her lack of success.

The Enforceability of ‘Naked Promises’ Under Georgia Law

Another way that you potentially can defeat a contract claim like this is to demonstrate that the contract as alleged lacked one or more of the essential elements that Georgia law demands. For example, Georgia says that all enforceable contracts must have what the law calls “consideration.” This occurs when there’s a bargained-for exchange. For example, Party A agrees to pay Party B compensation and, in exchange, Party B agrees to do (or not do) certain specific things for the benefit of Party A.

When an alleged contract simply involves a promise of payment in exchange for nothing, that promise is something that Georgia law calls a nudum pactum (which is Latin for “naked promise.) Naked promises are not enforceable in this state.

While this rapper’s cases before the 11th Circuit were hardly groundbreaking from a contract law perspective, there are still things to learn from this case. Your case might not look like this, but it might look like a disgruntled former partner, officer, or manager, who has abruptly emerged seeking payment allegedly owed to them under a contract they can’t find or produce. If that happens, you need to know what your rights — and what your obligations — are. One thing you can — and should — do is swiftly obtain legal representation  Look to the skilled Atlanta commercial litigation attorneys at Poole Huffman, LLC, who have the knowledge and the experience your business needs to give you the best chance of success. Contact our attorneys online or by calling 404-373-4008 to schedule your confidential consultation and find out how you can put the power of our team to work for you.