Legal Question in Business Law in Connecticut

Buying Business-Name Issue

I have clients who are purchasing a business that has been in existence for 25 years. A while back the owner purchased the right to use the name of the manufacturer and this is not a franchise. The manufacturer was bought out by a new manufacturer who does not want the old name to be used. The business has been known by this name if they must change it as an example if the name was knife and they changed it to J. Nife, is that sufficient so the "sound" is there. Otherwise, how does this effect the value the what they are paying for and can this manufacturer force their hand to change it. Please email me. Any assistance would be greatly appreciate. Thanks


Asked on 10/23/97, 10:45 am

2 Answers from Attorneys
Gerald Hershenson Law Office of Gerald M. Hershenson

Value of a Name of a Business Entity

The name of a business can have value. I suggest you contact an attorney to review the purchase agreement for the name. If a corporation or business entity is purchased after selling its right to use the name the new company should honor the original agreement if fair consideration was given. Suggest you contact a local attorney. The vaule of the business will be effected in my opinion if the name has been established over a long period of time and therefore the sale price should be reduced. This is the good will of the business value.

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Answered on 10/27/97, 5:03 pm
Stuart Williams

Business name issues

Since you have clients, I assume you are an attorney.If so, you may call me at 617-527-0050. Otherwise, pleasedon't; call instead a Connecticut attorney.

In any case, it sounds like the purchase of the name ends thedebate rather crisply, doesn't it? The new owner of the manufacturing concern will by defaultbe bound as a successor.

It is questionable if they even have a right to prevent a name from being used where they have alreadychosen to abandon it. The manufacturer's argument may be that the name indicates that THEY are making the product, which is no longer so, and thus people are being deceived. It's not a good casefor them, I'm afraid, especially since they may nothave standing in the matter. Their motives may be transparently anti-competitive / competitive.

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Answered on 10/28/97, 3:20 am


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