Legal Question in Technology Law in Massachusetts

Liability of purchasing company to alleged breach of contract

Company A allegedly breached contract for delivery of a software system and was purchased by Company B during this time period. The 'Customer' asked Company B for a refund of the original contract price. Company B responded that it is not liable for any actions of Company A and referred the 'Customer' to Company A's lawyer.

Company B purchased Company A as a ''wholly owned subsidiary'', but Company A still exists as an entity.

Can Company B escape liability because of an agreement that was made with Company A excusing liability? Where does that leave 'Customers'?


Asked on 5/06/03, 9:29 am

1 Answer from Attorneys
Lawrence Graves Coolidge & Graves PLLC

Re: Liability of purchasing company to alleged breach of contract

They are correct -- your claim is against the purchased company (now subsidiary) rather than against the purchaser. Unless the subsidiary is now insolvent, there should be no problem in pursuing that claim.

Best wishes,

LDWG

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Answered on 5/06/03, 9:40 am


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