What to do about an option contract and current liabilities?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
What to do about an option contract and current liabilities?
I placed an option contract on a business that is a going concern. A term was that the business was to be free and clear of debt. We have studied the reconciliation of income/cash-in-hand against the known liabilities excludes tax liabilities and discovered there is insufficent funds to pay the current liabilities. We believe the owner should pay the outstanding bills debts. Do you agree? This business is a going concern.
Asked on September 18, 2012 under Business Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
There is no way to answer the question in the abstract: the answer depends on the precise terms of the agreement. What you describe certainly seems plausible or reasonable, you need to have an attorney review the agreement (and any correspondence, early drafts, etc. involved in negotating it) to really understand not just your rights and the seller's responsibilities, but also your remedies--that is, can you cancel the contract? reduce the sale price by the amount of the liabilities? etc.
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.