The State of Georgia contracted with Inspection Systems Inc

The State of Georgia contracted with Inspection Systems, Inc., a Minnesota company, to build 86 automobile emissions inspection stations in 25 counties, and operate them for seven years. This contract is worth hundreds of millions of dollars to Inspection Systems. But suddenly Georgia legislators opposed the entire system, claiming that it would lead to long delays and high expenses for motorists. These lawmakers urged that Georgia simply stop construction of the new system. Was Georgia allowed to get out of the contract because its legislators concluded the whole system is unwise?

Solution

No Georgia is not allowed because Inspection System Inc has an expressed bilateral contract and backing out from it would mean millions of dollars of payment for breach of contract just based upon the suggestion of some legislatures. Though not required but state has to honor their contracts in order to save the breaching penalty to be paid from tax payers moeny

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