HELP - Deposit for business purchase

[Learner "L"]

Can anyone help with advice?

I was recently looking into purchasing what I thought was a client base and telephone number of a self-employed person and gave a deposit of £2000 to hold the deal while I checked the accounts information etc for viability. After various discussions it appeared that the self-employed person has an employee and a workshop they expected me to take over. This was not my understanding of the proposed deal. I later received a letter from said self-employed persons solicitor dealing with the matter who stated a purchase price of £10,000 plus £2,000 for fixtures and fittings! Only the £10,000 was ever discussed previously. Needless to say I did not want to take on the liability of an employee with 28 years service and a workshop (I have my own workshop). I would like to receive my deposit back as nothing was ever agreed as non-refundable and I feel I was unfairly led.

Advice please?

 

[stugster]

Tell the self-employed person to give you your £2000 back then.

 

[Learner "L"]

But am I entitled? More to the point is he entitled to keep it? I don't want to go in demanding it back if it turns out I don't have a leg to stand on!

 

[stugster]

It depends what the terms were. If he's changed the offer considerably, I'd suggest that was cause for you to have your deposit back without any recourse.

Failing that, phone the police and tell them it's theft.

 

[Learner "L"]

Thanks, but I was hoping for a more definitive answer. I assume as nothing was signed he has no rights. Thanks anyway.

 

[Bill Ryan]

Do you have anything in writing suporting your position such as a contract or emails or is this agreement just based on conversations?

 

[Learner "L"]

Hi Bill. This is base solely on verbal agreements. The only thing in writing is a receipt for the deposit and a letter from his solicitor asking if I am happy with the £10,000 + £2,000 for F&F. Once they received our OK to that they were going to send a contract for me to look at. No contract or written agreement signed.

 

[Bill Ryan]

Stating the obvious, you have a remarkably different view of your agreement than his one.

It seems so different that it is difficult to reconcile how this happened.

The immediate issue is the status of the money you paid over. It is not clear to me from the information you have provided but I would suggest that you write to the solicitor stating that you have not agreed to this with the other party and as the original agreement was for X and he now trying to provide Y you want the deposit refunded.

If that doesn't work there will be a Plan B which could end up in litigation - just depends.

 

[syed2011]

As long as you have not Signed any of the contracts you have all rights to get your amount back.

 

[Bill Ryan]

As long as you have not Signed any of the contracts you have all rights to get your amount back.

This might well be right but there is insufficient information to make such a strong assertion. In particular there are two sides to every story

 

[Rhodes100]

If there is no exchange of contracts the seller cannot claim that this represents 10% or more of the asking price.

Usually deposits are returnable if during the due diligence process you found something detrimental to the purchase, which is seems you did. He misrepresented his business to you.

There, it seems, no legal reason why they should be able to keep this money.

Ask for the money back from the solicitor on the basis that during the due diligence process you found out about the employee and then post the answer on here if you have no success.

 

[Paul Murakami]

I agree with Bill. An oral contract can be as legally binding as a written one. It's just harder to prove what the terms were.