Legal Question in Business Law in Texas

Re: purchasing business

Unless they personally obligated themselves to perform on those contracts, they company owns the contracts and they should go to you when you buy the company.

Re: purchasing business

See David Nance's response. The down payments should be credited against the selling price.

The seller is either ignorant or trying to gain an undue advantage. How would they satisfy the contracts if they sold the business to you? Are they planning on opening a competing business?

Do you have a non-compete clause in your buy/sell agrement?

I would give very serious consideration to walking away from this guy, unless you're bound by contract to buy the business.

Re: purchasing business

It depends. Are you purchasing an entity, such as a corporation? If the contracts were signed in the corporate (business) name and you are purchasing that business these are business contracts that should not be affected by the fact that you are taking over that corporation (business). In other words, the accounts receivable/contracts should come with the business. If not, then you have to factor these receivables into what you are willing to pay for the business. Also, I would be very concerned about the seller selling you this existing business and then opening a shop down the road. You need a strong non-compete. Without seeing the purchase and sale documents its really difficult to advise you properly.