Q: When a business is sold, are the new owners responsible for the obligations and contracts of the previous owners?
I contract with a sports facility in which I "rent" their fields to conduct my business - sports classes for kids. The facility was recently sold to new owners. I believe it was an asset sale. The new owners and I verbally agreed to maintain the conditions of the contract for the next 8 weeks - mainly because my customers are registered and have paid through 8 weeks. After 8 weeks, it was understood that the schedule and other conditions would be renegotiated. I just received an email from their lawyer, demanding immediate changes - including a 300-400% increase in rent and a complete overhaul of our field schedule. I guess my question is, do I have any legal ground to stand on at all?
A: Based upon your wording and questions, it sounds to me like you do not have a binding contract upon the new owner. Also, if the new owners did only an asset purchase they would not be liable for your contract. Further it sounds like the new owners agreed to honor your agreement for the limited time of 8 weeks and now plans to change the contract dramatically. I suggest that if might be worth paying a consult fee to a real estate attorney in your area to see if your contract has anything to stand upon to hold the new owners to your old price structure. (It sounds like it does not but a review of your contract would be the best way to know for sure).
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