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UKSolicitorJA
UKSolicitorJA, Solicitor
Category: Law
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Experience:  English solicitor with over 12 years experience
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Company A purchases the business of B. B has a contract with

Resolved Question:

Company A purchases the business of B. B has a contract with customer C. The contract is for 5 years to provide a telephone service. The contract does not include a right to assign clause. Can Company A act as though in was B and continue with the contract without C's agreement?
Submitted: 3 years ago.
Category: Law
Expert:  UKSolicitorJA replied 3 years ago.
Hello,

No, as there is no right to assign clause and the contract remains between B and C.
C's approval would be required for A to provide the services.

However if the contract between A and B confers a benefit on C, C may sue A but it doesn't give A the right to provide services to A on behalf of B, pursuant to the Contracts (Rights of Third Parties Act) 1999 which you may rad about here


http://www.seqlegal.com/blog/contracts-rights-third-parties-act-1999-introduction

May I help further?
Customer: replied 3 years ago.

Yes please.


Your answer is most helpful and I take it that A cannot sue for a term of the original contract between B and C.


In the real case I do not wish to continue with A providing the service. The contract with B states that if I cease using the service I must pay a closure fee equal to the earnings B would make for the remainder of the 5 year term.


On the basis of your opinion I can terminate the contract and A cannot sue me for the closure fee?

Expert:  UKSolicitorJA replied 3 years ago.
You can argue that your contract is with B and B should either provide the service or the contract will be terminated as far as you are concerned.

A cannot force its services on you.

Hope this clarifies
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