Hi, what are the repercussions when a person breaches a contract when buying a business? My boss was selling her business (deli ) and the contract was signed by the buyer but he has not paid any money.The agreement was that the new owners would take over on the 1st of September but obviously this could not happen without him paying to buy the business. Does anyone know if she will be entitled to anything under Commercial Law for having to wait for their money and also if there is a breach of contract?
VIC Breach of Contract - Is Seller Entitled to Anything under Commercial Law?
- Thread starter redhead42
- Start date
Hard to answer your questions without seeing the contract.
The Seller has rights but these rights may be expressed differently in different contracts. Based on your story the buyer has clearly done something wrong and the seller can take legal action to either enforce the contract, recover losses or cancel the contract or some combination of these. Enforcing the contract may be hard if the buyer has insufficient money. The Seller needs to consider the buyer to be in default (assuming this is what the contract says), think carefully about what they now want to happen (force sale, repudiate sale etc) and communicate that to the buyer asap. Depending on the attitude of the buyer this has the potential to be messy.
The Seller has rights but these rights may be expressed differently in different contracts. Based on your story the buyer has clearly done something wrong and the seller can take legal action to either enforce the contract, recover losses or cancel the contract or some combination of these. Enforcing the contract may be hard if the buyer has insufficient money. The Seller needs to consider the buyer to be in default (assuming this is what the contract says), think carefully about what they now want to happen (force sale, repudiate sale etc) and communicate that to the buyer asap. Depending on the attitude of the buyer this has the potential to be messy.
Thanks Rod yes it is very messy.They have now told him it is back on the market but have not cancelled the contact in case his money does come in soon.If they find another buyer they will have to give the original buyer two weeks to come up with the money or the contract is broken.They are wanting to know the percentage of money they can claim for him breaking the contract as they have had a big loss already for him not coming through at the time that was agreed.Thanks again
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