I sold business 1.5 yrs ago and he is threatening to sue
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
I sold business 1.5 yrs ago and he is threatening to sue
I sold an established branded online business to a guy in Poland 1.5 yrs ago. I sold it through an online broker and also had a lawyer generate contract for both of us to sign. Few weeks ago, I was informed the buyer is preparing for a lawsuit against me for proving him with misleading information. Supposedly, this Poland guy is rich and has a lot of money. He also owns a business in NY with his own NY lawyer hence his threat.
Part of the contract the buyer and I signed included ‘General Indemnity’. He is threatening me to return the original selling fund or else he will pursue a lawsuit.
I did not do anything wrong. And this is news to me. Why trying to go after me now? After 1.5 years? I plan on getting a lawyer soon but would love to hear your generalized advice. Thank you.
Asked on December 1, 2018 under Business Law, New York
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
You don't have to do anything until and unless he sues. The following assumes that a suit is filed:
You have to defend yourself against the suit, not ignore it, even if you have done nothing wrong: if you fail to respond to the suit within the time period set by the court rules, you will lose by "default" or automatically.
Whether he is factually correct is a different story, but a claim that you provided him with misleading information is a claim you committed fraud, which is a recognized cause of action. So this will not be thrown out for failing to state a claim he could recover money for, since if he can prove his allegations, he can get a judgment in his favor requiring you to return or repay the sale price.
Why he waited 1.5 years? Possibly he did not discover what he claims the fraud to have been until recently...or he discovered it earlier and took awhile to decide to sue. It doesn't really matter.
A fraud claim, as he appears to be making, can result in voiding the contract and so bypassing any liability limitations in the contract.
So retain the lawyer right away, if and when sued: based on what you write, this is a serious threat.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.