Aa a new business owner am I responsible for merchandise sold bythe previous owner?

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Aa a new business owner am I responsible for merchandise sold bythe previous owner?

I operate a garden center and lease the property. The name is the same as it has been since the original owner (who leases the land) had the store. The store closed over 6 months ago and I re-opened it 2 months ago. Previous operators sold $1000 worth of trees and plants to a man 1 year ago. He claims they all died and now wants me to replace them. He feels that since the shop has the same name I am liable.

Asked on May 10, 2011 under Business Law, Tennessee

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

The question is whether it is the same business entity as previously--e.g. the same limited liability company (LLC) or corporation (Inc.). If it is, then the company *may* be liable--IF there was some guarnty, warranty, etc.--which means that if you own the same LLC or inc. as had sold this man his plants, and there had been a guaranty or warranty, you'd have to honor it. However, if it's not the same business entity (even if it is the same name and address) and/or there had been no guaranty or warranty, then you would not be responsible. Business A is not responsible for what Business B did; it is only responsible for what Business A did, even if that was done under prior ownership.


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