Hi there
This is a bit of a complicated one. One of my clients, a small business in Perth, changed ownership whilst still owing around $10k for unpaid services. The new owner disputed their liability for old debts, however, the old owner and I reached a settlement agreement in his capacity as a private individual rather than as a director of the company (which he no longer was), that he would settle the business' debt for around $8k. The (rather informal) wording of our agreement which he drafted and sent to me; and which I signed and returned to him was:
Re: (my business name) and all related entities, suppliers and persons.
This is to certify that any and all outstanding amounts claimed by any of the above for (my type of business) and related services relating to the (the business's type of business) conducted in (address) is settled upon
the payment and acceptance by EFT of $8000.00
Yours sincerely,
(my name), Sole Proprietor.
I subsequently waited for quite some time (around 2 years) for him to make good on the settlement contacting him regularly, however, he never did. I have subsequently just filed a case against the firm, not the old director, for both this amount and an additional $1k in unpaid invoices that accumulated under the new management.
However, I now fear that I may have been too hasty and that I might have been successful in trying to enforce the original settlement agreement against the old owner rather than pursue the company for its debts - which I am dubious of its ability to pay.
I have only recently filed the claim (1 week ago) and the defendant has yet to respond. I am wondering if it would be possible to modify my claim, to only seek to recover the newly accumulated debt of $1k, and seek to enforce the settlement against the old owner personally. So, two key questions:
1) is it likely that this settlement agreement was valid/enforceable against the old owner? He entered into it with me after he ceased being a director, and that he was doing so in his personal capacity was clear. Can an agreement to reduce an obligation against a third party count as consideration and hence that our agreement was contractually binding?
2) have I now breached my own obligations under the settlement agreement by now initiating action against the firm under Commercial Law? If I withdraw or modify my claim now, to the only claim for the newly accumulated debt, would that be sufficient to prevent a breach, and could I still seek to have the original settlement enforced?
Thanks in advance, any help or clarification would be greatly appreciated.
This is a bit of a complicated one. One of my clients, a small business in Perth, changed ownership whilst still owing around $10k for unpaid services. The new owner disputed their liability for old debts, however, the old owner and I reached a settlement agreement in his capacity as a private individual rather than as a director of the company (which he no longer was), that he would settle the business' debt for around $8k. The (rather informal) wording of our agreement which he drafted and sent to me; and which I signed and returned to him was:
Re: (my business name) and all related entities, suppliers and persons.
This is to certify that any and all outstanding amounts claimed by any of the above for (my type of business) and related services relating to the (the business's type of business) conducted in (address) is settled upon
the payment and acceptance by EFT of $8000.00
Yours sincerely,
(my name), Sole Proprietor.
I subsequently waited for quite some time (around 2 years) for him to make good on the settlement contacting him regularly, however, he never did. I have subsequently just filed a case against the firm, not the old director, for both this amount and an additional $1k in unpaid invoices that accumulated under the new management.
However, I now fear that I may have been too hasty and that I might have been successful in trying to enforce the original settlement agreement against the old owner rather than pursue the company for its debts - which I am dubious of its ability to pay.
I have only recently filed the claim (1 week ago) and the defendant has yet to respond. I am wondering if it would be possible to modify my claim, to only seek to recover the newly accumulated debt of $1k, and seek to enforce the settlement against the old owner personally. So, two key questions:
1) is it likely that this settlement agreement was valid/enforceable against the old owner? He entered into it with me after he ceased being a director, and that he was doing so in his personal capacity was clear. Can an agreement to reduce an obligation against a third party count as consideration and hence that our agreement was contractually binding?
2) have I now breached my own obligations under the settlement agreement by now initiating action against the firm under Commercial Law? If I withdraw or modify my claim now, to the only claim for the newly accumulated debt, would that be sufficient to prevent a breach, and could I still seek to have the original settlement enforced?
Thanks in advance, any help or clarification would be greatly appreciated.
