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CalAttorney2
CalAttorney2, Attorney
Category: Legal
Satisfied Customers: 10244
Experience:  Civil litigation attorney for individuals and businesses.
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I bought a laundry mat from a broker that was representing

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I bought a laundry mat from a broker that was representing both parties and has excellent standings in the laundry mat business community, after only two weeks of owning the business I am finding the gross incoming revinue is considerably less than what was on the listing sheet, also the listing sheet shows a payroll expence that is $1000.00 lower than the current employees were making, the seller also did show the correct amount for the equipment taxes.

William B. Esq. :

Dear Customer, thank you for using our service. My name is XXXXX XXXXX I would like to assist you today.

William B. Esq. :

I am sorry to learn about this situation. To better understand your question, did the seller misrepresent the information to the broker, or did the broker misrepresent the information to you? (Or do you know?)

William B. Esq. :

If it was the broker that made a material misrepresentation, you would have potential claims of (1) fraud; and (2) breach of fiduciary duty. These are both money damages claims where you could sue for the reduced value of the business in the condition that it actually is in, as compared to the value it was represented to be.

William B. Esq. :

If the seller made a misrepresentation (either to you directly, or by making a misrepresentation to the broker who unwittingly passed it on to you), that would also be the basis for a fraud claim, but unlike the claim against the broker where your damages are limited to money damages, it is possible in these situations to void a contract based on a fraudulent misstatement (this is termed "fraud in the inducement") and you can get your money back and force them to take back their business minus business losses you incurred.

William B. Esq. :

The broker may also be liable for negligence if they breached their duty in investigating the information for you (this is fact specific, but if they completely failed to look at the books, that may be the basis for a negligence claim).

Customer:

this is great news, also the seller is carrying a part of purchase

William B. Esq. :

The way in which the contract itself is structured will not change your legal rights with regard to the concealment issue. What it may change is your ability to renegotiate this matter. The important issue to prove a case of fraud is: (1) the defendant made a material misrepresentation; (2) the plaintiff reasonably relied on the misrepresentation; and (3) the plaintiff suffered damages.

Customer:

got it thank you

William B. Esq. :

If you can show those 3 factors, you can create a viable claim for fraud (either as an independent tort, or as a grounds to void a contract in this situation). Fraud is an intentional tort, meaning that the defendant is not only liable for the cost of the damages, but can also be held liable for punitive damages.

William B. Esq. :

I hope the above is helpful, if you have any questions please do not hesitate to let me know and I will follow up quickly.


Thank you for using our service, please do not forget to rate my answer when you are satisfied. I am going to transfer our conversation to the "Q&A" format to ensure you can review the entire response and that I can follow up to any questions you may have quickly. I do wish you the best of luck in this matter.

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