Can a previous owner who is selling me a business just take it back??

UPDATED: Oct 1, 2022

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Can a previous owner who is selling me a business just take it back??

I have bought a business with the previous owner financing it. I got into a bit of a mess and got behind on the rent of the building not owned by the same person. They are a co signer of sorts on the lease. For the past 4 months I have been busting out and caught up 1400 of the 1600 I owe. The previous business owner who I am still paying is claiming that she can come back in and take it back from me the same day. Is she correct?

Asked on September 1, 2018 under Business Law, Oklahoma


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

She can only take it back IF the contract or agreement of sale specifically provided that she could regain possession if you feel behind on or defaulted on payments. If the agreement did, she can take it back in accordance with the provisions in the contract for default: such provisions or terms are legal and enforceable.
But there must be something in the contract giving her this right. Without such a term or provision, she cannot regain the business, but can sue you for the money you owe her but have failed to pay.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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