What to do regarding liability before we owned the business?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
What to do regarding liability before we owned the business?
We bought a restaurant 2 years ago and just got served papers on a accident that happened in
a year before we owned it. Are we liable for this claim? The business is an LLC. We made them sign a paper stating there were no back bills or anything.
Asked on May 4, 2016 under Business Law, Missouri
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
If the business is the same LLC now as it was then--i.e. when you bought the restaurant, you bought the LLC--then the LLC would still be liable. An LLC is a "person" in this regard: it is the same "person" (or legal entity) now as it was then, so it can be liable for accidents occuring before you were the owners. (You will not be personally liable, since 1) you were not in any way personally at fault for what happened then; and 2) an LLC member is not liable for the LLC's liabilities simply because of being a member.)
The paper you had the prior owner sign does not bind the person suing your restaurant: he or she did not sign it. You can potentially sue the prior owner for breach of contract (violating a signed agreement) and/or for fraud (lying about potential liability) IF you can show that he would have known or had reason to know about the accident and potential for a lawsuit--if this came "out of the blue" and he would have had no idea, he would not be liable.
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.