Legal Question in Civil Litigation in California
Contract Lawsuit
Initiated a business contract with an individual. Contract had a mandatory binding arbitration clause for all parties entering into contract (me and other person)--that neither party would resort to filing lawsuit for any reason.
Well the other person never paid me the agreed upon fees of $20,000. I sold my business and transferred all rights to wife. She bypassed arbitration and now filed a lawsuit in court against defendant.
Can the defendant compel her to arbitration, even though she was never a party to the original contract?
Does transferring my company to wife nullify the arbitration clause in this case, giving her right to sue since she wasn't party to contract?
1 Answer from Attorneys
Re: Contract Lawsuit
Assuming that the contract was valid in the first place, its terms are binding on the business, regardless of whether it has been sold to a new owner. That the new owner is your wife is irrelevant.
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