If we purchased a liquor store in March, is a contract with a vendor signed in January still binding?

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If we purchased a liquor store in March, is a contract with a vendor signed in January still binding?

Or does the contract need to be redrawn with a date to reflect the purchase of the store in March?

Asked on December 9, 2014 under Business Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

From what your write, it appears you mean a contract signed by the previous owner, prior to your purchase. If that is the case, the issue is whether you bought the a business entity (a corporation or LLC) when you bought the store, or you just bought the assets (e.g. the name, the inventory, etc.). If you bought a business entity, the contract is still binding because it is binding on the business entity which you bought. If you bought just the assets, however, then the contract would not be binding on you unless you specifically assumed the contract, or took it over, because you are not the same entity or party as the one which entered into the contract.


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