Specialist in Dispute Resolution & Commercial Litigation,
Insolvency & Corporate Recovery
Read What You Sign BEFORE You Sign it!
It is common sense and I have banged on about it before. It is however so very true as a recent client discovered to her potential cost.
Very simple scenario really, she wanted to sell her business so went to a business sale agent and signed up to dispose of the business. The agent has understood that the business comprised certain key elements and they are mentioned in the literature which again has been approved by the client. The literature contains various errors! The terms provide for a minimum fee payable upon disposal of the business or part of the business.
Nothing happened for a year – not a sniff – so (leaving aside arguments about the effectiveness of the agents) the client decided that she needed to re-structure the business to improve its efficiency and potential to sell. She did so by disposing of part of it to a colleague in return for £1.00 and a discounted rate going forward for the use of the various services in the future as well as transferring over most of the staff, thus eliminating a large part of the business overhead and potential liability.
In her mind therefore streamlining, making the business more efficient and thus more marketable.
However, the agents got wind of it all and said that they were entitled to their minimum fee of £15,000.00! Ouch and a big argument in existence which really she could do without as the business and individual can do without the stress and of course with this hanging over her head the remaining streamlined business is unmarketable!
If only she had firstly read the terms and understood them, secondly made sure the literature was accurate, thirdly pressed the agents throughout the year and finally actually cancelled the agreement in accordance with the terms before doing what she did it would have been so much better!
Please read and understand before you sign!
Also, think before you act!
Mark Gardner – Solicitor – Excello Law
m: +44 (0) 758 261 6335 t: +44 (0) 345 257 9449
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