Vidalia Outdoor Products, Inc. v. Higgins, 305 Ga. App. 836

Summary

The Georgia Court of Appeals reversed summary judgment granting Scott Higgins rescission of a contract for the purchase of a one-percent ownership interest in Vidalia Outdoor Products, Inc. The court held that genuine issues of material fact remained regarding whether the company's failure to issue a stock certificate and initially record Higgins's ownership interest constituted a material breach warranting rescission.

Holdings

1. A party may rescind a contract only when the opposing party's nonperformance or breach is material—so substantial and fundamental that it defeats the object or goes to the root of the contract. Because genuine issues of fact remained concerning whether Vidalia Outdoor's initial failure to issue a stock certificate and record Higgins's ownership interest was material, summary judgment for Higgins was improper.

Questions Presented

1. Whether Vidalia Outdoor's initial failure to issue a stock certificate and reflect Higgins's one-percent ownership interest on its tax returns constituted a material breach that authorized unilateral rescission.
2. Whether summary judgment for Higgins was proper when genuine issues of fact remained concerning the materiality of Vidalia Outdoor's alleged nonperformance.

Disposition

reversed