Legal Question in Consumer Law in California
My business partner and I opened a new Day Spa. It is in the same location as the previous Day Spa, but different name and new corporation. We did not buy the business, we purchased the "Personal Property" from our old Day Spa owner. She did not sell the previous Day Spa to us, because it was the operating under her corporation. She still has another Day Spa near us that operates under a different name but same corporation.
She has taken a new partner in her existing day spa now, does that change her liability regarding the outstanding gift certificates?
She had sold hundreds of gift certificates at the old spa, and is expecting us to honor them, but it was not discussed in our contract to honor them. Under the law in Ca, doesn't she still have to honor them since she received money for them and is still the same corporation name and offering the same services still? She told clients that she would only honor them until a specific date, but CA law states that gift certificates cannot expire ever.
We are getting many upset clients who think we are liable for the gift certificates since we are in the same location and same phone number but we are not, correct? Shouldn't the previous owner be responsible?
2 Answers from Attorneys
It depends on what the terms and conditions of the gift certificates she issued say. That's the contract. I would imagine that the gift certificates provide that they expire if she goes out of business.
On purchase, did you do a bulk sales notice?
As to her liaability, if same corp then she is likely liable.
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