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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 22888
Experience:  38 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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I was offered a 50% share in a business near Auckland. I

Customer Question

I was offered a 50% share in a business near Auckland. I asked for a and recieved a signed exclusivty agreement which allowed be a given period of time to have the books professionally valued. The vendor agreed not to consider any offers from other interested parties during this period.I then confirmed that i wished to buy a 50% share and paid a $5000 deposit. My lawyer suggested that we set up the company as a new business to exclude any previous liabilities.
The vendor suggested we first work together for 6 months to make sure we could work as partners and we agreed to do so in case there were any irreconcilable differences.No Partnership agreement and balance of payment has yet occurred.
This has gone well apart from following :(1) 2 interested parties have now offered an additional $100k for business, (2) the vendor says other interested parties in next town are becoming agressive and he has concerns should we complete the sale i may not be able to afford to pay the rent (i will be buying stock and goodwill, he will maintain ownership of buildings and I will pay him rent).
Is this a sufficient reason or excuse not to complete the sale of 50% of share(concern about rent) ?
Do I have any legal rights to insist the sale goes through at the end of the 6 month trial period if there are no irreconsialable differences? I have already spent $8000 on valuation and initial legal fees to set up partnership agreement.I have also sold my busines in uk and reloacted to new zealand at considerable expense, based on signed exclusivity agreement and deposit that i paid. Kind regards Rtv
Submitted: 1 year ago.
Category: New Zealand Law
Expert:  Chris The Lawyer replied 1 year ago.

It would be difficult to give definite answers on this without seeing all the documents. From your description you appear to have an option for the first six months together. The contract to buy appears to be enforceable as well, so if he changed his mind, you can probably insist he sells. But I have seen the fine print so can only make general comments.

As for bailing out of the contract, he appears to be hinting he may want one of the better offers, and if you are uncertain about proceeding anyway, you should set up a meeting to discuss these issues, probably with your lawyer present. That will then sort out what you both want out of this transaction

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