A Business Transfer Agents Contract Is Door Step Selling

11/02/2011 by info.

It has always been assumed that a contract for the sale of a business was a contract between two businesses therefore assumed that the equal relationship between the two parties meant that consumer law did not apply.

However recent small claims court cases have shown that unless the buying of businesses forms part of the sellers businesses then the person selling the business must be acting as a consumer in appointing the agent.

This has widespread consequences with regard to the contract for the sale of a business.

The Cancellation of Contracts Made in a Consumer’s Home or Place of Work etc Regulations 2008 apply to a contract made with a consumer at their home, workplace arranged by the vendor away from his business premises.

It sets the cooling off period at 7 calendar days both for contracts made as a result of visits by traders and make clear that the cooling off period starts on the day of receipt of a notice of the right to cancel from a trader.

So, where a business transfer agent sets up an appointment for their sales representative at the business owners premises or in a hotel, this constitutes a time when the agent is supposed to inform the agent that they are entitled to a 7 day colling off period after they sign the contract to sell their business.

This means, if the agent did not give you notice in writing of your right 7 days cancellation rights, under these regulations they legally cannot enforce the contract.

How many other businesses are also falling foul of these regulations we wonder?

Posted in Selling Your Business, Business transfer agents | No Comments »