A business was sold but the buyer's wife wants more money and says it was sold without her consent. What to do in this case?
On the purchase and sale paper, it has the signatures of couple B and husband A, but there was no notary because the business and the lease were on couple B's name. The transaction was done and new lease was created. 4 months later, wife B said it was her husband's decision, but not her. Wife A refused wife B's request because she has put a lot money to remodel the business. When wife A wasn't at the business, wife B came and took things without wife A's consent. Wife A then called husband B to ask. He said he forged his wife's signature and his wife is looking for a lawyer.
Will couple A lose the case? If the business is given back to couple B, will couple A get back what they paid plus the money they've put in the business?
Wife B also wants to sue landlord for the new lease with A.
Unfortunately, you are paying for your biggest mistake--not getting an experienced lawyer involved when you bought the business. Much will depend upon the terms of any written contract. However, your lawyer will now have to dig deeper and explore who knew what, what the knew and when they knew it--in terms of the husband's authority or lack of authority. You need to take all of your documents relating to the transaction to an experienced small business attorney and get some advice about what your rights and obligations are given a very messy set of facts.
This is a classic example of what can happen when you try to do a complex transaction such as buying or selling a business without consulting with an experienced attorney. It is too late for you to benefit--but I hope others can learn from your mistake.
Please consult with an experience attorney promptly about your situation--before you agree to anything else. Good luck.
My answers are general information only. You must not rely on general answers as... more
My answers are general information only. You must not rely on general answers as legal advice. I can only provide legal advice privately and pursuant to an attorney-client agreement.
Obligatory caveats: Your questions ultimately appear to involve issues of family law, and I'm not a family law attorney. (Above, I identified your questions as "family law" questions in an effort to alert the family law attorneys about your questions.) Also, based on my fundamental understanding of family law, we don't really have enough facts to give you well-informed, concrete answers. Those caveats aside, here are some basic insights for you that might help to shed some light on the issues for you:
First, it's critical to know whether the business was Couple B's community property. If the business was not Couple B's community property, then Husband B was likely at liberty to sell the business to Couple A without Wife B's consent, and Wife B would likely have an uphill battle to challenge the sale.
Second, if the business was Couple B's community property, it's critical to know whether Wife B participated in the management of the business. If Wife B did not participate in the management of the business, then by statute, Husband B would not have needed Wife B's consent to sell the business, and Wife B would likely have an uphill battle to challenge the sale. If Wife B did participate in the management of the business, then Husband B needed Wife B's consent to sell the business.
Third, if the business was Couple B's community property, and if Wife B participated in the management of the business (such that Husband B needed Wife B's consent to sell the business), then subject to certain exceptions, the sale of the business is "voidable" and Wife B would have the option to void the sale. If she chose to void the sale, Couple B would need to return the proceeds of the sale to Couple A.
Fourth, if Wife B chose to void the sale, I doubt (but am not certain) that Couple A would automatically be entitled to recover the "money they've put in the business" together with the price that Couple A paid for the business. More likely, I'd bet that Couple A would need to pursue Husband B separately for any damages over and beyond the price paid for the business, such as the amount of money that Couple A put in to the business, any potential damages arising from the new lease, etc.
As the insights above suggest, depending on the specific facts, each of these issues also potentially gives rise to a variety of "sub issues." Because of this, bottom line, I agree with the other attorney that it would behoove you to consult with an attorney in person about your questions, so that the attorney could delve into the facts and perhaps give you a better sense of what your options and prospects are. But, I hope this helps a bit for now.
Speaking directly with an attorney in this matter may be your best foot forward. These types of situations can require a detailed look at the actual facts involved and may not be answered easily in general terms.
An attorney can help you navigate through several issues that could potentially be in play. Here is context why speaking to an attorney to sort out the facts is important. For the validity of the contract, an attorney can help review whether there was actual authority to contract and, if there was not, whether apparent authority or implied authority was sufficient to form a valid contract. An attorney will also be able to discuss with you all the different ways this could go whether or not document had a valid signature from the wife. The attorney can further discuss with you the implications of the leases involved, including whether the leases are valid only to the business or apply individually to any of the parties. There may be other issues involved in this matter as well, even ones that aren't readily visible.
By speaking with an attorney, you will be able to understand his matter better and be advised how best to protect yourself going forward.
If you do not already have an attorney, you can contact your local county bar association to receive a referral to an attorney who may be able to help.
Lastly, the contract did not require being notarized (although having it notarized can certainly help minimize disputes like this).
I agree with the legal analysis in the previous answers. However, the question of "how do I resolve this conflict?" is probably more important than the techincal anlalysis of whether the seller(s) can be legally bound by the signatures. Resolving this in court is probably an option of last resort. A good business attorney should be able to help you with your options for pursing a resoulution that hopefully does not involve protracted and expensive litigation.