Is the seller liable if they sell me a business using false financials?

I recently bought a business, the seller provided numerous financials
showing the business to be very profitable. Upon taking over the
business we ran reports using the data base that came with it. We
found out the sales were 20 less than we were told which is a large
amount, especially with the bottom line of the business.

Asked on September 9, 2016 under Business Law, California

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

You can sue the seller for fraud.
Fraud is the intentional misrepresentation of a material fact made with knowledge of its falsity and with the intent to induce your reliance upon which you  justifiably relied to your detriment.
In other words, you would not have bought the business had you known the true sales figures.


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