CA contract law, service/vendor contract, business was purchased by another company is my contract still valid

business contracts: Have a small service business, have a contract for a year with a customer, that business was sold to another company kept same name, was never informed, is my contract still valid with new owner - Is this your question? Add additional information
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Answers (2)

Sean M. Sweeney

Sean M. Sweeney

Contributor Level 4
This is going to be one of those answers no one likes- it depends. It is really going to be 100% dependent on what the contract says regarding assignment of the contract. If there is no language then you look to your state law. The general common law rule favors assigment, in that if there is no provision prohibiting it, it is usually allowed to be assigned to a the new owner of the company.

Take a look at your contract and see if there is any assignment language present- if not, maybe consider including it from now on if this is a major concern for you.

Good luck.
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Todd Andrew Picker

Todd Andrew Picker

Contributor Level 3
First, look to the terms of your contract. Does the contract address the situation you describe, i.e. the sale of the customer or assignment of the contract? If so, what does it say? Second, assuming the contract was not terminated or is otherwise unenforceable, it is possible that the obligations and debts of the seller (your customer) may not have been assumed by the buyer. That does not mean that you cannot ultimately obtain relief against the successor company if your contract was breached. By operation of law the successor company can still ultimately be held liable for the debts and obligations of the seller. This is true when, for example, the buyer entity is merely a "continuation" of the seller's business.

More factual information is needed to analyze the question. When you consult with an attorney, make sure that you have all of the documentation relevant to the subject contract and whatever information you might have about the sale of your customer.
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