Q: Buyer stop payment on business. 1st payment clear but 2nd stop. Reason normal wear and tear. Location. MD.what my rights
Payment start on may 2020. Business sold on 02/29/2020. First check clear and 2nd stop . Reason he hold my check because he has issue with POS,sink, AC.
A: There should be a buy-sell agreement, and I assume a promissory note securing payment of the terms of purchase. Those documents govern your remedies. Take them to a lawyer to review. Unless he is arguing intentional fraud or concealment of material defects in the property owned by the business you sold, or that you have breached express warranties you made regarding the condition of the property you sold as part of the business, then he must pay. If he is making such claims, his remedy is not likely going to be rescission of the deal, but a monetary claim for repairing/replacing the defective items to conform to what he claims they should have been when he bought the business, but he must still pay for the business and comply with the purchase terms. Generally, if there is a promissory note setting forth the terms of payment, it will contain remedies for breach, such as acceleration of the balance due and the right to confess judgment for the full amount in court. If the transaction was done correctly, and there was a lot of equipment and inventory conveyed as part of the sale, you typically would have had a financing statement and UCC security instrument filed against all those assets to further secure the payment, enabling you to take possession of those items to sell and cover part of the balance due on the sale. Consult a lawyer about what to do.
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