Purchased a Business - Old Contracts

ps... Hi A2K community! It's been a long time since I poked my head back in here!

Holy cow! Hiya!

Huh, I bet you can dump the old contracts. Was there something specific in the purchase contract (for the business) where you agreed to take on past debts and/or obligations? 'Cause vagueness in a contract is always construed against the drafter, and if this isn't in it and you didn't draft the contract, then there's no a lot of reason why the previous owners or the processing companies could believe that you were buying the old obligations.

No answer, just stopping by to say hi!

Thanks Jespah!

The only mention of debts/obligations in the contract is this:

"Date of sale will occur on August 31, 2013 and will be effective as of 12:00 midnight on August 31, 2013. Seller is liable for costs incurred up to the end of day of closing, Buyer for costs incurred after that date."

Hey JPB!

I'm thinking these costs were incurred before the date of closing. Of course, talk to the pros; I haven't done this in ages.

Just listening, saying hi!

Hey osso!

Did you buy the business or just the assets of the existing business?

This is probably going to be a question for a lawyer. If you purchased an ongoing business you probably also purchased any contracts signed by the company you now own. It's probably going to come down to which legal entity signed on for the credit card processing and whether you are now that entity.

Hey jp!

My general understanding is that if you bought the business intact, you have both the old company's assets and liabilities. Not sure that would include old contracts. If you merely purchased their assets, you're probably clear.

Just kind of guessing, ya understand.

Yeah I was kind of leaning that way too. Thanks for the guess!

hey there...

hey ho...good to see you

Now here's an awesome sighting!

Welcome back to the hood, jpin!

Howdy, jp!

Okay, not my area of expertise by any means. Maybe Joe from Chi Town will chime in. But, I think jes is right and you can dump the old contract. And parados has a good question, and a good point: what did you buy? Did you acquire the legal entity that entered into the contract with the cc processing company? I assume not, since you said you bought the company using a new legal entity. And so, if you did not acquire the legal entity that entered into the contract with the cc processing company, you don't have "privity of contract" with that processing company. How would that processing company be able to charge the cancellation fee? That's what I would argue. And if in the purchase contract you didn't agree to assume any contracts the prior company entered into, what recourse do they have against your company?

Hey Region!

Hey Panz! Good to see you too.

Thanks ehbeth. Good to be back!

Hey Tico!

Thanks for the answer. There was never anything specifically stated in the contract about existing contracts. I did have the CC processing company switch over to my bank account and I have been using them, but have not signed any documents or forms with them.