Business sale litigation can arise from the sale of the entire business, underlying assets, or the sale of shares of the company that owns and operates a specific business. With businesses and portions of businesses constantly trading hands, disputes involving the sale of a business is common and often times unfixable by simply talking to the other invested party. Sale of business litigation most commonly occurs due to the following situations:

Non-Compete Agreements

Non-compete agreements are a common part of the sale of business contracts. The reason for this is that non-compete agreements will normally restrict the seller of the company from going into a similar business within a specified geographical area for a certain period of time.

Additionally, a non-compete agreement could also restrict the seller from using information that is confidential to the business being sold. Non-compete agreements are extremely complex and thus require a knowledgeable and experienced District of Columbia sale of business dispute lawyer.

Product of Services Disparagement

Product services disparagement is closely related to non-compete agreements as cases focusing on this claim arise when the seller of a company seeks to compete against the purchase of the company.

Misrepresentation or Non-Disclosure of Material Facts

In certain cases, the seller of a company may misrepresent, lie, or forge documents relating to the company that will be sold. This forgery typically includes tax returns or financial statements, including inflated sales or non-existent partners. 

Disputes Concerning Representations and Warranties

Sales of companies normally require a seller to make representations and warranties about the business. These representations and warranties typically regard the value of accounts receivable, the status of tax liabilities, inventory levels, sales history, the accuracy of financial statements, the existence of employee or contractor contracts, issued share capital, benefit, and pension plans, and ongoing or expected legal liabilities. Because of the importance, the information the seller provides to the buyer concerning these questions will have a significant effect on the purchase price of the company. Thus, disputes regarding representations and warranty of the businesses are the most common causes of business sale disputes.

Non-Payment of Purchase Price

Depending on the industry and individual deal, the purchase price of the company may be due at the time of sale or on a deferred basis. In both cases, the purchaser may be unwilling or unable to generate the agreed-upon funds to fully purchase the property. If this occurs, the seller of the company will typically seek recovery of the purchase price.

Failure to Close

Even after the two parties sign a contract, either the seller or buyer may refuse to close on the property. In certain cases, the seller or buyer may not refuse to close but may attempt to delay closing for a myriad of reasons. No matter if one party refuses or attempts to delay closing, partaking in either of these actions will give the negatively affected party multiple legal remedies. However, if the delay in closing is only a short period of time, the claim may not be actionable.

Injunctions and Urgent Remedies

At Antonoplos & Associates, our District of Columbia sale of business dispute lawyers have over 20 years of experience working with clients in negotiation and litigation concerning their business disputes. Additionally, we have experience working with our clients during alternative dispute resolution.

When a business is being threatened by the conduct of another individual or business, it may be necessary to obtain urgent equitable remedies for the fair and fast resolution of a business dispute.

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