Legal Question in Business Law in Pennsylvania

Are contract terms transferred if a company is bought out

Good Afternoon;

We had a contract with a uniform company (hereby named: company #1). Company #1 was recently bought out by another uniform company (hereby named: company #2).

We would like to cancel our services with company #2.

Our contract with company #1 was signed 8-29-01, terms are for 24 months. The contract should be up, but company #2 automatically enrolled us for another 24 months starting 8-29-03 because we did not give 60 day written notification to cancel. We did not sign a contract with company #2. The name of company #1 does not appear on any of the billing or coorespondence for company #2.

My question is: Can company #2 automatically transfer the contract with the same terms without authorization or a signature?

Thank you,

J


Asked on 9/03/03, 2:05 pm

1 Answer from Attorneys
Alfred. Babb Babb & Associates, P. C.

Re: Are contract terms transferred if a company is bought out

You must look carefully at the contract signe with company #1 to see if that contract had provisions allowing it to assign performance to a third party or entity. Also, should look at the terms and conditions under which company #2 purchased the assets, rights etc., and what obligations it had to assume for performance of contracts etc., of company #1 and also, what notices were given sent posted, advertised, etc., concerning the sale of #1 assets etc. to #2. Each state has laws governing what is generally call a bulk sale or transfer. Also, you must consider the law applicable of each state where seller consumated sale and buyer consumated purchase. In short, impossible to answer question without more information and research, factual and legal.

Good Luck,

AWB

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Answered on 9/10/03, 8:06 pm


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