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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
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Can I sell my business if in the contract says I can not sell

Resolved Question:

Can I sell my business if in the contract says I can not sell or take loan for the business.
I`m paying off the business to the last owner on monthly payments.
Submitted: 3 years ago.
Category: Business Law
Expert:  Dimitry K., Esq. replied 3 years ago.
Thank you for your question.

If you sell your business, your legal obligation to the last owner remains. Even further, if the contract states that you cannot sell, the last owner can file for damages against you for breach of contract, fraud, and bad faith. While there is nothing illegal about selling, it is something that will get you sued should you do so.

Good luck.
Customer: replied 3 years ago.
What if I use escrow company? Is there a way around so I can sell without getting sued? ex. make a casher`s cheks today for old owner and sell tomorrow?
Expert:  Dimitry K., Esq. replied 3 years ago.
Sorry, no. ANY transfer, either via a third party or via escrow, or directly, can be deemed as breach since you are attempting to transfer ownership and equity of the company to someone else, something that the old owner still has superior interest on. The only way to sell is with consent of the old owner who would allow the transfer to take place and assign the debt over to the potential new owners. if the old owner does not consent, you are unfortunately stuck.

Good luck.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 38775
Experience: Run my own successful business/contract law practice.
Dimitry K., Esq. and 6 other Business Law Specialists are ready to help you
Customer: replied 3 years ago.
I`m sorry think I did not put the question right. I mean if I sell for cash. I owe 20 000 and I want to sell for 50 000 buyer gives me the 50k i pay my 20k and I take my 30k, Can I do that?
Expert:  Dimitry K., Esq. replied 3 years ago.
Thank you for your follow-up.

You can sell, provided you inform the past owner, and possibly provide written assurances that he or she obtains his or her share first from the sale, and you keep the remainder. If the past owner agrees, then you can go ahead and sell, otherwise without knowledge, even if you send the full check for all remainder owed, there may still be grounds for suit for breach of terms.

Good luck.
Customer: replied 3 years ago.
Can I advertise the business for sale thought? If I convince the buyer to pay me for example on Dec 1, and I make cashiers check for the old owner on Dec 1, and Actual contract for the sale with the new owner start on Dec 2. How can I sell it for cash and not be sued?
Expert:  Dimitry K., Esq. replied 3 years ago.
Thank you for your follow-up.

You are free to advertise and sell but you MUST get the waiver from the old owner. So before you do anything, speaking with the old owner--if the old owner agrees, you are free to try to get a new buyer, but without that permission even attempts to sell can be seen as attempts to breach the contract and in acting in bad faith.

Good luck.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 38775
Experience: Run my own successful business/contract law practice.
Dimitry K., Esq. and 6 other Business Law Specialists are ready to help you

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