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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3498
Experience:  Solicitors 2 years plus PQE
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I sold shares in a business that I owned 50% of. When I sold

Customer Question

I sold shares in a business that I owned 50% of.
When I sold those shares I had an oral agreement with the buyer that they would pay me my month in hand salary and also for 3 business trips taken for the business prior to the sale.
I was asked to wait for 3 months for payment due to business funds although my 3 trips earn revenue profit of £98,000 against the costs of only £6000.
I had email confirmation both before I signed the share purchase and after I signed.
He agreed to pay in full up until the 3 month time has elapsed and I asked for the money and he then refused.
I have taken them to small claims court and the judge has asked me to show why I believe they should pay when I signed an entire agreement clause on the sale of my shares.
I have read on the internet that an oral and email exchange is a legal alteration if made after the signing of an entire agreement but wanted this confirmed.
Submitted: 1 year ago.
Category: Law
Expert:  Alex J. replied 1 year ago.
Hi, Thank you for your question and welcome. Can you confirm was this essentially a separate agreement from the share sale, that you would provide a consultancy to the company in return for your expenses being paid? Did you make the small court claim under the guise of the share sale agreement?
Customer: replied 1 year ago.

The agreement was separate to the share sale although it was talked about between the relative solicitors at the time as something that needed to be paid.

I injured the costs privately for trips made for the business which included paying for flights for myself to the USA and food for myself and clients and hotel costs.

Profit from these trips was around £93,000 and although I was a 50% owner of the business at the time, I was still an employee of the company and I didn't take a penny of the money, the business took it all.

The agreement was not writing into the share purchase agreement but it was confirmed orally and via email between me and the buyer both before and after the sale.

There were no costs after the sale of the business, these costs were all incurred prior to the sale of the business.

I would like to add however that as of todays date, nearly 2 years after the sale of shares, I am yet to be paid for the shares with the buyer having never actually paid the agreement.

Expert:  Alex J. replied 1 year ago.
Hi, Thank you. If you made this claim under the guise of the share sale agreement then the Judge is right, the entire clause applies. This means under law known as the parol evidence rule you cannot use external evidence to change the intention of the parties. The parties would have to formally agree a contract amendment and acknowledge it as a contract amendment.
Expert:  Alex J. replied 1 year ago.
Considering the agreement, did the agreement say anywhere that the consideration was in full and final settlement of any expense claims against company? If it did not then you could argue that these are two entirely seperate issues.
Customer: replied 1 year ago.

This was the wording.

"the terms of this agreement are offered by the employer without any admission of liability and are in full and final settlement of all and any claims or rights of action that the employee has or may have arriving out of their employment with the employer, or its termination, whether under common law, contract, statute or otherwise, whether or not such claims, or could be, known to the other parties or in their contemplation at the date of this agreement in any jurisdiction and including, but not limited too, the claims in schedule 1(each of which is intimated and waived) but excluding and claims by the Employee to enforce this agreement, any personal injury claims which have not arisen as at the date of this agreement and any existing personal injury claims in relation to accrued pension entitlements."

The issue I have is that this was a seperate agreement, it was lawfully owed by the company and wasn't included in the sale, the sale was £250,000 for shares, not £240,000 for shares and £10,000 for the costs incurred prior to the sale.

Would it not be the case that an agreement the buyer made AFTER the sale of shares would be upheld ?

The fact is that this is morally a fraudulent issue as I was rightfully owed the money and the buyer knew he didn't want to pay and was just holding me off until the deal on his side was completed.

Expert:  Alex J. replied 1 year ago.
Hi Thank you. Unfortunately this seems quite conclusive to me. Did the emails suggest that you were agreeing a variation to the contract? Did your lawyer acknowledge that this wont be enforceable?I think you mentioned this previously can you confirm that the £6k was incurred before the contract was signed?
Customer: replied 1 year ago.

The £6k was incurred prior to signing the contract.

Solicitors did pass details of this money owed by the buyer but it was NOT writing into the agreement because we had made this between us and agreed upon it.

On the date I signed the agreement I was 100% of the understanding that this money would be paid in 3 months time which did not happen.

I have emails confirming that it would be paid both before AND after the signing date. This confirms that the buyer was happy to pay and confirmed they were happy to pay.

Expert:  Alex J. replied 1 year ago.
Thank you.
The problem you have is the following:
(i) You lost your claim in the county court;
(ii) You signed a contract in full and final settlement;
(iii) The only way to challenge this is to prove you have a valid contract amendments.
In my opinion it sounds like your solicitor may have been negligent in not including this in the share sale agreement. Your buyer has in part taken advantage of this.
Have you asked your solicitor to explain why he/she did not include this?
Kind regards
AJ

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