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tdlawyer
tdlawyer, Lawyer
Category: Law
Satisfied Customers: 1096
Experience:  11 years experience of general practice.
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Hi there, I am in the process of purchasing a sole trading

Resolved Question:

Hi there,

I am in the process of purchasing a sole trading company from my ex-boss under a gentleman's agreement. The agreement is turning sour and as such am seeking your legal advice.

The company in question is a motorcycle training school and I he is stating that I have no legal rights over the use of the company name - yet I am trading as that company. My bank account, streamline card reader, paying road tax and insurance on the motorcycles, renewal of the web address before it was lost, is all in the company name. I have even set up a limited company using the company name although I have not started training against it yet. The motorcycle training school office is leased in my name.

He is questioning the amount of money he has received from me (this is approximately one half of the total amount) stating that encumbrances incurred whilst he owned the company (i.e. training courses that he received money for but has left me to expedite) are my own problem.

I know I should consult a local business solicitor in my area and will to during the course of next week but for peace of mind, can he make unreasonable demands on me?
Submitted: 3 years ago.
Category: Law
Expert:  tdlawyer replied 3 years ago.

tdlawyer :

Hello, welcome to the website. My name isXXXXX can assist you with this.

Customer:

Hi there

tdlawyer :

Hello!

tdlawyer :

I need to ask you a few questions.

Customer:

ok

tdlawyer :

Can you tell me whether you had a written agreement?

Customer:

what are your questions?

Customer:

sorry - my screen did not scroll

tdlawyer :

:)

tdlawyer :

It's okay.

Customer:

no we have not had a written agreement

tdlawyer :

Did you agree that you would not have the right to use the name or trade until you had paid him in full?

Customer:

no - on the contrary, he knew that I would have to trade in order that he received payments

tdlawyer :

I thought that might be the case. This will all come down to what the contract (the verbal one) between you is. But, usually, nobody when agreeing things verbally sets out things like you would if you had lawyers acting and you had a written agreement. It would be a bit odd! So, the usual position is that if you agree to use the business and trade as it (i.e. use the name etc.) then that is NOT dependent upon you having paid in full. The obligation to pay is usually separate, i.e. you have to pay (because you agreed it), but that's just something he would have to sue you for, whilst you continued to trade as the business that you purchased.

Customer:

He thinks he ability to close everything leaving me with a lease that I would have no use for etc is that the case?

Customer:

he has the ability :o)

Customer:

Furthermore can he have any say in the business I am now trading as

tdlawyer :

No, not if he has sold the rights across to you.

tdlawyer :

He cannot do anything then which unlawfully interferes with your business.

tdlawyer :

If he threatens to do that, then I would normally suggest the person on the receiving end look to the Courts for an injunction to prevent him doing anything, especially if it's more than idle threats and he has the ability to interfere and cause you financial loss.

Customer:

Thank you - that makes me a lot happier! I presume that 'sold' means everything has been handed over to me even though I still owe him money!

tdlawyer :

Yes, that's right.

tdlawyer :

If this were a simple sale of goods issue (and I know it's not), then the rules are in statute (s.18 of the Sale of Goods Act), but the law follows to some degree in relation to the type of issue you're dealing with. It's more complex than that, but it's the essence of it.

Customer:

Thank you very much. I will take the matter further with a local solicitor, but at least I can sleep better tonight

tdlawyer :

Yes, I hope you do. :)

tdlawyer :

Is there anything else you would like me to answer for you?

Customer:

Thank you once again

Customer:

No thank you

tdlawyer :

Thank you!

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