Claim Being Made Against Me Based On A Non-Existant Verbal Contract

[tarranty]

I bought a long established curtain making business last year as the owner retired, we drew up a basic contract and I took over the trading name, phone number, website, stock from 1st August. The previous owner had took an order from a customer, took the deposit and made the curtains, the customer's house purchase was delayed so she couldn't fit them and take the balance. No mention of this was mentioned as she left other than they are ready to fit when the customer calls. A month later she called us and I went and hung them and took payment in the business name.

The previous owner called a few weeks later demanding the money, I said no, as far as I am concerned the customer's contract is with me, if anything goes wrong with the product in the future the customer will come to me, not her.

I have to attend a hearing soon as a claim is being made and wondered if there is anything I can do to defend myself?

[Mosaic]

Surely the cost to the previous owner of making the product was covered by her sale of the business to you? If not, then it should have been, and she seems to have overlooked this.

[EDDIE51]

As far as I can see you bought the business with its stock which would have included the made up curtains. The previous owner can not ask you for more money for them. Once you bought the business you bought everything to do with it including outstanding orders. I do not see how the previous owner can have a claim.

[tarranty]

Thanks for the advice, I was a little nervous as on the claim form she is 'swearing by almighty God and on anyone's life' that we had made a verbal contract. So me going in to the court and just stating that I do not recall this conversation will, I hope be enough. I will now though mention your points.

[Maydup]

I suggest you say that this additional conversation did not take place and that you bought the business and the stock as per your contract.

Rather than.... You do not recall the conversation, which implies it could have happened but you don't remember it.

[kvalidir]

My thoughts on the matter are that she will doubtless swear up ad down that she made the curtains at her expense, that as delivery was delayed she did not manage to deliver and hang the curtains but had anticipated doing so before you took over the business so this matter was not included in your 'simple contract', thus she would have received payment normally before the contract came into force. I imagine she will say that she discussed this with you and that you agreed verbally that the money would be hers once the order was complete ( as it would have been had they been delivered previously). Whilst I agree that you took over the business 'as is' with this outstanding order apparently I do think she could manipulate some wiggle room for herself by stating that the order was already completed prior to your purchase and that it was a simple matter of payment not having yet being taken. I then think it would depend on who is most convincing regarding the alleged 'verbal contract'.

[tarranty]

She had taken a £400 deposit which more than covered her costs and knew the customer's house purchase completion date was going to be after the date I took over, her claim to me only came to light when I began forwarding her contact details to suppliers that she owed money to as many were reluctant to deal with me unless I helped them retrieve their debts. She's also saying that the £700 balance included VAT and I am being fraudulent by not paying it which I feel is irrelevant as I am still not VAT registered.

[cassa333]

If you took over the business lock stock and barrel did you not also take on the liabilities and debts?

[cassa333]

Sorry forgot to add...

Did the debts belong to her or the business?

[tarranty]

Just took stock, bit of training and goodwill, debts were hers

[boxtops]

Is all this documented, then? If she was still liable for the debts incurred when she ran the business, it must have been written down and detailed as being excluded from the purchase price.

[kvalidir]

The problem is without seeing the 'simple contract' you seem to be saying one thing in one direction and another in the other. If you took on the business lock stock and barrel,that would usually include all orders and liabilities. you are saying it includes all the good bits and none of the bad ones. I'm not certain how they will play in court, it would depend on exactly what your contract said and how many 'verbal contracts' you might have made one another. Can you clarify please?

[cassa333]

was the debt remaining within the business hers and written into the contract?

Because 'I bought a long established curtain making business last year as the owner retired' sounds pretty much like you bought the business and not just the stock.

If you paid a bargain price or very little for the business I would say you bought the debts and liabilities as well. If you paid a huge amount of money then perhaps it was a deal for her to pay the debts included within the price.

Just on the facts you have written I would say that you are liable for the debts she is being chased for but equally you also bought the work in progress.

[tarranty]

No, I bought a trading name, she was Mrs ***** trading as *****. Never once has a supplier insisted I am liable for her debts, I explained to them all that as it was not a Limited company that I bought that their contract is with the owner at the time and not the trading name. That in my opinion isn't even relevant to this case as I am not being chased for these debts, I only mentioned it as a point to show that the 'verbal contract' to which she keeps referring to was only brought up after she began to receive calls from seven creditors to whom she owed money.

[boxtops]

It doesn't sound a very watertight contract - all this should have been agreed well before either of you signed anything. IMO it's worth consulting a solicitor, if a claim is now being made, to be sure of your position.

[EcclesCake]

Was work in progress and the order pipeline not get covered in your contract?

[kvalidir]

It's very relevant actually Tarranty as you are having problems with her. If you are having problems with her then you can reasonably expect her next move to be ' oh these aren't my debts, she bought the company, go and chase her' and in the absence of anything to the contrary that might hold water. She could very easily have sold the business with debts and in the absence of anything about debts and current orders being mentioned in the 'simple contract' you say you signed it would probably swing one way or the other, ie either you own it all debts and all, or you don't own the debts and probably don't own that order either. what wording did she use in the county court documents to describe her claim and what additional paperwork if any did she provide as evidence please?

[tarranty]

She has not mentioned the debts nor have I as its not a defense. She has not provided any evidence other than 'we agreed I would be paid when the curtains were fitted'. The debts are irrelevant as nobody has ever chased me for them and they don't form part of the case.

[cassa333]

When she doesn't pay the debts and suddenly says the business is now owned by tarranty they will come chasing you so it is relevant.

[tarranty]

I think we've gone off track here, it's not a limited company and as such not liable for anything, it's mearly a trading name, all creditors are now my suppliers and will not chase me for her debts, they've all set me up as a new account. My question was in relation to whether a so called verbal contract of which there is no proof (because it wasn't agreed) can stand up in court.

[Peter Pedant]

T // we drew up a basic contract and I took over the trading name, phone number, website, stock from 1st August. //

was this on paper or not ?

If the verbal add-on accessory that she is pleading by almighty God etc etc is post 1 st Aug then it is not part of the contract.

statements made before may be....