Legal Question in Business Law in Arizona

Breach of Contract after Selling Business

My Dad recently lost a short battle with cancer. He passed

away in late Dec 08. My Dad owned a small business in AZ

where he cleaned pools. His business was very successful and

well-respected. After we found out he had cancer (early Dec

08), we quickly looked for buyers and sold the pool routes

about 2 weeks before he passed. The sale was based on a

contract where the buyer would pay $5,000 per month until

the business was paid off. I don't have the details tonight (I'm

waiting for my Mom to pdf me the contract) as I live in CA and

she is in AZ. I believe we sold approximately 70 pools for

$1,000 per pool. The buyers were to take over the pool

routes immediately. There was a clause in the contract that

allowed for the price to be reduced by a few thousand dollars if

some customers quit unexpectedly. Any further loss of

customers, would be the responsibility of the buyer. To date,

25 have quit, and the buyers have not paid my Mom

anything. They are asking my Mom (who is very desperate) to

take $48,000 total. They are drafting a mod to the contract.

I asked her not to sign anything. What should we do?


Asked on 3/12/09, 11:32 pm

4 Answers from Attorneys
George Moschopoulos The Law Office of George Moschopoulos

Re: Breach of Contract after Selling Business

Since the contract was entered into and is being performed in AZ, you should hire a business attorney in AZ to address the matter. He may advise you that the current contract is enforceable as is or help your mother mitigate her losses by negotiating a smaller reduction given how many people have unexpectedly dropped out. However, having an attorney review the contract before proceeding further is crucial.

Good Luck.

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Answered on 3/12/09, 11:48 pm
OCEAN BEACH ASSOCIATES OCEAN BEACH ASSOCIATES

Re: Breach of Contract after Selling Business

Sue the buyers for breach of contract to start. Contact me directly.

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Answered on 3/13/09, 12:06 am
Donald Scher Donald T. Scher & Associates, P.C.

Re: Breach of Contract after Selling Business

I concur in the answer provided by Mr. Moschopoulos. Your Mom needs to be represented by counsel, so that she knows what her rights are and what the options are that are open to her to best achieve her goals.

I try to avoid a lawsuit and would take action as your Mom directs me to do, after she has the opportunity to decide what is best for her. Right now, it looks like the buyer is trying to "get her while she is suffering the loss of her husband" thinking that they can steal the business from her.

Please be sure that she gets legal counsel and someone to act for her.

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Answered on 3/13/09, 1:01 pm
Donald W. Hudspeth The Law Offices of Donald W. Hudspeth, P.C.

Re: Breach of Contract after Selling Business

I'm sorry to hear about your loss. You need to have someone review the existing contract to see what options you have open to pursue their debt. If they want a modification to the contract, make sure it has teeth in the event of breach. We can start with $950.00 to review, research, rewrite and negotiate the agreement.

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Answered on 3/13/09, 9:52 pm


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