Is a contract still valid if the company closes its doors?

UPDATED: Sep 30, 2022

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Is a contract still valid if the company closes its doors?

A gallery held an exhibition of a selection of my artworks. I signed a contract
that stated that if I sell any of those works 6 weeks after the exhibition the
gallery still gets a cut of the sale. The gallery informed me it was closing its
doors after the contract was signed and closed once my exhibition ended. If I
sell an artwork during that 6 weeks after the xhibition do I still have to give
the gallery the cut of the sale even though the business has shut down?

Asked on February 1, 2017 under Business Law, Alaska


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

If the business legally still exists--e.g. it was a sole proprietorship or partnership, so you'd owe the money to the proprietor or partner; or it was an LLC or corporation which has not been dissolved--then yes: even if the business is not doing business, since the legal "person" or entity being the business still exists, youd have to pay.
If the gallery were an LLC or corporation which has been actually, officially dissolved, then no--there is no entity existing to pay the money to.

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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