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Barrister, Attorney
Category: Business Law
Satisfied Customers: 33210
Experience:  15 years practicing attorney, JD, BA, MBA
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We sold our swimming pool tile cleaning business on Dec. 31,

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We sold our swimming pool tile cleaning business on Dec. 31, 2008. We've been having difficulty with the new owners making payments on time and making the partial payments versus full payments. We would like to take the business back. Our sales agreement/promissory note says "in the event of default, the business would revert back to us". They are now almost 30 days late on a partial payment. They are friends, so we'd like to do this without legal action, if possible, but don't want to do anything that wouldn't be legal. How many days late would be considered in default? Unfortunately, we didn't put a time line in the agreement. We are in the state of Arizona. Thank you.


If the contract says that payment is due on XX day and it is not paid, then they are in default absent any provision in the contract. The court would likely look at a "reasonable time" but I would say you are way past that. The problem you may likely run into is if the purchaser does not voluntarily return the business to you, you will have to file suit to recover under a breach of contract action. Another potential issue is that in most states, accepting a partial payment will then extend the time for another period. For example, if they pay monthly $500 and they pay you $250 and you accept it, that prevents you from action for another month from the day you accept. If you are not interested in continuing this relationship, you need to refuse to accept anything but full payment.


Depending on the amount of the purchase, you will either need to file it in District or Circuit Court or its equivalent in AZ. District Ct. is for smaller amounts, usually up to $5,000 depending on state law and Circuit is for a larger amount. If it is a very small amount, small claims court may be the way to go. Typically this is for amounts under $1,500.


Document your concerns in a letter to the buyer and send it certified mail. Make sure you put in a specific date for him to respond by or you will have to begin legal action. Keep all correspondence in a file so that you have it should legal action be necessary. Once you send the letter, he may realize that you are serious and voluntarily turn the business back over to you. Unfortunately, the situation may end up damaging your friendship if he does not realize that he is in over his head.


Good luck and thanks for the question.




The information given by me here is not legal advice. As all states have different intricacies in their laws, the advice given is general advice only. You should not and may not rely on anything on this website as legal advice and you agree that the nominal price you may voluntarily pay for information here clearly does not pay for any legal advice. I am neither establishing nor accepting an attorney-client relationship with you. You must hire an attorney in your state as a matter of law, in order to receive legal advice and attorney/client relationship and rights. I do not claim to be licensed to practice in the state where this information is being provided or whose law would apply, if any. My licensing credentials are noted in my profile, which you have full access to. As law is always changing, you are recommended to consult with the appropriate legal counsel in your jurisdiction for accurate and complete information. Thank you for your time and consideration.

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