Do independent contractor’s contracts transfer when a business is sold to a new owner?

Get Legal Help Today

secured lock Secured with SHA-256 Encryption

Do independent contractor’s contracts transfer when a business is sold to a new owner?

I signed a contract with the owner of an agency, in less than a month that agency was sold to a new owner who changed the terms of my offer location, clients served, amount to be paid. I am now coming to the end of the of completing my assignment and signed no new contract with the new owner. Did the terms of my original contract with the previous transfer to the new one or were they nullified at the sale? The new owner did sign all new contracts with the other staff but I denied

continuebusiness due to the change in original offer terms.

Asked on March 9, 2018 under Business Law, Virginia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

The answer is, "it depends." To oversimplify, since the possible number of variations on the below is quite large--
1) If the agency had been a corporation or LLC and the owner signed the contract on behalf of the agency, so you were actually contracted with the LLC or corporation, then--
a) If the new owner bought the actual LLC or corporation (i.e. bought the business entity), then the contract remained in effect, since you were still contracted with the same LLC or corporation, even if it now has different ownership.
b) If the new owner did NOT buy the LLC or corporation but only bought the "assets" (including, e.g. the name, "good will," the accounts, etc.), then the contract did not bind the new owner, since he or his new agency (even if it has the same name, etc., it is a new agency in this case, if he did not take over the old LLC or corporation) did not sign it--you contract is with original owner's LLC or corporation, which may no longer be operational or even in existence.
2) If the contract was signed by the old owner personally, such as if there was no LLC or corporation but just a "DBA," then the new owner, as a different person, is not bound by the contract--he did not sign it. The contract is with the old owner, for whom you are evidently no longer working.


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 lock Secured with SHA-256 Encryption