If I am the manufacturer and sole distributor of a brand and there are re-sellers selling my products that I did not sell to, can I demand proof of purchase?

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If I am the manufacturer and sole distributor of a brand and there are re-sellers selling my products that I did not sell to, can I demand proof of purchase?

I purchased a company from an individual who is in breach of several items in the purchase agreement, thus we are not on good terms. I have reason to believe this individual I purchased the company from which included 100% of all existing inventory sold products after the sale of the company to me and may still be selling. Can I demand a proof of purchase from the resellers to determine the amounts so I can figure out if it would be cost effective to initiate litigation? I am the sole manufacture of this brand.

Thanks in advance for your reply.

Asked on May 10, 2017 under Business Law, Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

You can only demand proof IF you actually file a lawsuit and use the legal processes of "discovery" (e.g. subpoenas, written interrogatories or questions, document production requests) to seek this information. That is, you must file the lawsuit *before* having the information you seek.
As for whether it is cost effective: for commericial litigation of this type, depending on how hard the other side fights, you can easily spend $10k - $20k in my experience--possibly more, if big stakes are involved and the other side is willing to fight to the bitter end. If there was a breach of the sale agreement, you could recover from the former owner the profit he made in violation of it.You need to decide if the amount at stake is worth the cost--and also the time and distraction from your business--of litigation.


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