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Jenny
Jenny, Solicitor
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I sold my business in July and the purchaser agreed to pay

Resolved Question:

I sold my business in July and the purchaser agreed to pay in 2 payments, one was on completion & the second is due in July 2015, If the business makes a net profit of 100k or more then 100% of the balance is due, however if the net profit is less than 100k the amount to be paid reduces on a £ for £ basis up to a maximum of 50K.
The net profit of the business is defined as before taxation and disregarding Directors drawings & non standard expenditure. Non standard expenditure is defined as improvements to the premises (as distinct from repairs) the cost of major items of equipment & marketing and promotional costs.
The Purchaser has suspended my old PA for possible Gross Misconduct which is unlikely to be proven and may lead to either an unfair dismissal or constructive dismissal hearing.
The Purchaser has informed me that if she decides to proceed with this and her case is proven then this will directly affect my 2nd payment as it will come off the profitability of the business.
There is a clause in the Purchase Agreement that states
The Purchaser will indemnify the Seller against any claim originating or relating to the employment of any of the Employees for the period of employment starting the day after the closing date including claims related to any failure on the part of the Purchaser to comply with the duties and obligations of the Transfer of Undertakings (Protection of Employment) Regulations.
I believe this clause protects my second payment if my PA wins her case as I'm assuming the Purchaser will deemed to have been negligent in dismissing her and the he will have to pay the full costs and not try to reduce the companies net profit.
Submitted: 2 years ago.
Category: Law
Expert:  Jenny replied 2 years ago.
taratill :

Hello my name is ***** ***** I am happy to help you today.

taratill :

Your interpretation of the indemnity is correct.

taratill :

It sounds like a try on and he will not be able to use this to reduce your liability.

taratill :

If he fails to pay you you will be able to bring a claim in breach of contract.

taratill :

If you have any further questions about this please do ask. If I have answered your question I would be grateful if you would take the time to rate my answer. Thank you and all the best.

taratill :

Hello is there anything further you would like to know about this?

Customer:

Thanks Taratill, that confirms my thoughts Thank you

taratill :

No problem, all the best with it. Please do remember to rate my answer and do come back to me in the future if you need to.

Jenny, Solicitor
Category: Law
Satisfied Customers: 6305
Experience: Qualified Solicitor specialising in Employment Law and general legal matters. Please start your question For Jenny Only
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