How to cancel out a debt by offsetting it against another transaction?

Get Legal Help Today

 Secured with SHA-256 Encryption

How to cancel out a debt by offsetting it against another transaction?

We sold our business and assigned the new owner to the original lease. Big mistake as they are closing their doors leaving us responsible for the remainder of the lease. Before we found out that we were responsible for the lease payments, we agreed to buy back a large piece of equipment from the new owner and have deposits in place. Once we take possession of the equipment and have invoices to prove it was a sale, can we pay the landlord the full amount of the outstanding lease and give any remaining money to the new owners? If we pay the new owners, they will take the money and run.

Asked on October 21, 2011 under Business Law, Florida

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If you are concerned that the people who you sold your business to will not honor their contractual obligations to you in the future, you should place all moneys to be paid to all (including the landlord) in a third party escrow so that you can get the situation taken care of with minimal risk to you.

It is unfortunate that the new owners have walked on the lease that you are responsible for as to the landlord. You can bring an action against the new owners for breach of contract albeit from what you have written you are ultimately responsible to the landlord for the lease.

I would try to take possession of the equipment from the people that you sold the business to and hold off paying them while you negotiate how the lease that the buyer is obligated on will be paid.

I recommend that you consult with a business attorney about the situation you are in.

Good luck.


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 AttorneyPages.com 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.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption