NSW How are Damages Proven for Breach of Contract?

[Lauren77]

If one company is sold, the seller has the same list of customers as the buyer. Then the seller opens another unregistered business and selling similar products. The seller approaches the customers who are on the list about the seller's new business.

In the case that both of them have the same list and a customer has a choice to choose whom to buy from, how can the damages for breach of contract be proven?

 

[Sophea]

Generally there would be restraints of trade written into the sale of business agreement - whereby the seller is prevented from operating the same type of business for a certain period of time in a geographical location in order to give the buyer the full benefit of the business. The buyer who would be suing the seller for breaching this restraint may point to a downturn in their profits or specific accounts which the seller has taken back and what those accounts were worth per year.

 

[Lauren77]

Thank you for your reply. What if the contract does not contain restrains of trade?

 

[Sophea]

Then what is the basis for claiming breach of contract?

 

[Lauren77]

Client database. They claim I use it.

The buyer has a Facebook to promote the business and there is a friend list. I have the Facebook too. They claim that because I have same friends that the buyer has on Facebook. So I am in breach.

 

[Sophea]

Yes, under general law, where there is no restraint of trade in the Sale of Business Agreement, a seller is not precluded from carrying on a similar business to the one sold even in close proximity, and you are able to advertise having set up a business. However the seller cannot represent they are continuing with or relocating the business which has been sold and they must not canvass the customers of the business that they have sold. A seller may be restrained by injunction at law from approaching customers as it interferes with the goodwill in the business which you have sold.

 

[Lauren77]

Thank you for your reply. If this matter goes to court, they may order me to stop this kind of business? How about damages?

 

[Lauren77]

I'm not sure if I understand correctly. So, if I have a new similar business and a new business name, I'm still not allow to do?

 

[Tim W]

Clarify for me....
What's different about this version of the question
that the answers you received last time you asked were not helpful?

You still do not seem to have grasped that the FB friends of the business,
which operates as (part of the) customer base,
is one of the assets you sold.

 

[Lauren77]

Thank you for your reply Tim. I do understand about that question you helped me answering. I just want to know examples of how damages or what possible order it would be.