Hi, welcome to Just Answer. I will help you with your question.
If the maximum extent of the warranty given is £50,000, then it's not possible to sue you for more than that simply because they put more money in afterwards.
That's the whole point of limiting your warranties in this way.
Were your agreements/warranty documents drafted by solicitors?
yes they were drafted by a lawyer and i was very careful not to promise too much. the construction industry has had a very bad time and projects delayed but now the business is taking off
Okay, then you should be okay - obviously, it depends on the drafting of the agreement, but if this was done professionally, you should be fine. If not, and something went wrong with the drafting, you'd have the solicitors on the hook for a negligence claim anyway.
But, I do wonder ...
Does warranting the business plan mean that you are actually liable here simply by more money being needed to be put in? There might have been unexpected circumstances giving rise to the need to inject more money (which wasn't requested here anyway), but that doesn't necessarily mean there was anything wrong with the business plan.
i do want to force there hand and they are a wealthy family. i have been told to counter claim? is there mileage in this? if they loose and all we have done is defended, can we claim for all costs and the like?
finall how easy is it to transfer assests to the wife? Thanks
What would your counter-claim be for?
not reaching the business plan profits due to not recieving the investment to open the retail centre? i wouldnt necessarily wish to sue, but it would seem odd just to defend without possible benefit if we defended the claim.
I think a defence is probably more the way this would go, as I don't immediately see the counter-claim.
On your other point ...
How easy to transfer your assets to the wife?
I'm guessing she wasn't party to the warranty docs then?
no she wasnt , she is not a director of the business.
OKay. The problem with this is that there is a right for a creditor to challenge the transfer of assets to your wife where it can be shown that the purpose of the transfer was to defraud creditors, i.e. put the assets beyond the reach of creditors.
my view is this is a tactic to offset the £50K they owe me.
There is no time limit either for this - you could transfer now, and a creditor could apply 20 years later on.
Ah ... I see.... This is often seen in cases of deferred consideration.
Is this what you have?
They were due to pay you under the same agreement?
I am not sure, my legal knowledge is limited? i think its all tactical as there are numerous issues. The FD who is an investor as not given us any managment accounts despite requesting for a long period so we have been unsure of the financila position and i have requested expert advice but they refuse. He is not an accountant. I think i have enough info? On a positive they said they would bring projects to us ( as developers) but there projects have not come off due to the economy. Thats why i think we have a good defence in that the business plan cannot be warranted. we alos did not promise any schemes or give false information, other than what they see as unreastic figures. if the projects had come off then the business plan would of been achievable- thanks for your help.
Okay, I see your point on the limit of the warranty, but it depends on the drafting of the document, and your solicitors that drew this up should be able to quickly identify its scope for you and tell you whether your view holds water. Anyway, you're welcome for today's help, and if you need anything in the future, just give me a shout, and I'll gladly help you out with this.
yes they were due to pay me under the same agreement.
Yes, well, it's not unusual to see people trying to wriggle out of paying by using this kind of approach.
It's going to come down to the agreement that you have/the exact wording of the warranties you have given. In principle, I agree with the points you make and that these could mean that there is no claim against you and that you're entitled to the money from them due to you. But, put your mind at rest, and see the solicitor that acted for you when the agreement was done, as they will be able to advise on its specific terms which will be important to this dispute.
I will do that many Thanks Max.