When a business is sold to a new owner, things do not always go smoothly. The most common issue that might arise is the buyer failing to make payments. Generally, it is the buyer who fails to meet the requirements of the agreement. This fact can make it daunting if you are the buyer and it is the seller who is not fulfilling his or her side of the bargain. This guide will explain what you should do in this situation and what your options are.
Steps You Should Take
- Communicate with the seller – The first step you should always take is to speak with the seller. Ideally, the cause of the issue is a simple miscommunication or forgetfulness. You should give the buyer the opportunity to explain himself or herself, and try to come to an understanding about when and how the agreement with be honored.
- Evaluate legal options – If this does not work, you should consider the possibility of taking legal action. Unfortunately, there are very few options for someone in your situation outside of filing a lawsuit. However, you should not jump into a lawsuit without doing your research. Sometimes a lawsuit simply is not viable. Speak with an attorney to learn what your chances of success are.
- File a lawsuit – If everything looks good and your attorney is confident that you will succeed, you should file the lawsuit.
There is essentially only one alternative to filing a lawsuit. You can think of arbitration as a more casual lawsuit. Rather than bringing your case in front of a court of law, arbitration brings your case in front of an arbitrator. Both sides can plead your case and the arbitrator comes to a decision about who is right. You can agree in advance for the arbitrator’s decision to be legally binding.
It is difficult to win your suit if the buyer is failing to provide something non-financial, like consultation. Unless the buyer has failed to provide you with something with tangible value, you may be better off setting the loss go and moving on.
Finally, you need to understand that most lawsuits take months or even a year or more to resolve. Unless the buyer settles immediately, your lawsuit will likely not be over anytime soon. Simply from a financial perspective, it may not be worth it to file a lawsuit. This is another matter that your contract attorney in Melbourne, FL can advise you on with specific details relating to your situation.
Thanks to The Law Offices of Arcadier, Biggie & Wood for their insight into business law and the buyers options when the seller does not meet the agreement.