Legal Question in Business Law in Utah

Can actions constitute proof of contractual agreement without a written agreemen

I sold my business to another party with the agreement they would take over all business operations, among which was the lease on a credit card machine -- balance of 8 months at $43.94. We made a phone call to what we thought was the entity involved. Later discovered it was not the correct entity, but was instead the merchant services group for processing credit card payments. When I was contacted by lease group re: payment, I explained new owner was taking over. Was told sub-lease not possible, but change of bank info to their account or a discounted buyout was. Contacted new owner. They said if they couldn't take over contract, not going to do. This was 3 months after the sale of the business. They had inadvertantly signed up with a merchant services group instead of changing the lease to themselves. My position is that they showed intent to complete the contract and that options were available to do so without the contract being sub-leased to them and thus, they are responsible for the balance of the lease. Are they?


Asked on 6/20/02, 10:47 am

1 Answer from Attorneys
Alvin Lundgren Alvin R. Lundgren, L.C.

Re: Can actions constitute proof of contractual agreement without a written agre

Your agreement with the buyer is enforcable between the two of you, but may not be binding on third parties such as the credit card vendor. Business sales require compliance with a law which requires the selling business to notify all of its creditors about the sale. Failure to notify such creditors does not relieve you of your responsibility to them. Thus in this case you are probably still liable for the lease. However, you can enforce the agreement with the buyer to pay you for the lease. A matter of this size should go through small claims court, which you can handle yourself.

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Answered on 6/20/02, 11:35 am


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