Legal Question in Credit and Debt Law in Ohio
How can I force someone to pay for a business with no legal contract ?
I own a golf driving range. My business is incorporated listed as "xxx Corporation, doing business as xxx Driving Range"
The business is operated on property owned by someone else who charges us rent each month for the land. I purchased this
in 1997 and owned and operated it for 10 years. I purchased this business for $120,000.00 and paid this amount to the
previous owner over a 3 year period. I made several withdraws from my personal 401k with pentalties and taxes to pay him
off. This money was never recouped. I sold this "operation" to an individual in 2007. The purchase price of $110,000.00.
The new owner opened his own "Corporation" and also operated under a "doing business as". He paid us $10,000 down. He
signed a paper agreeing to pay balance of $100,000.00. The signature is his personal name, not his Corporation. This paper
is not notorized and we have no legal contract. The agreement was made as a "gentlemans agreement" type of agreement. I
know this was ignorant on my part. He refused to get a lawyer to write up a contract so all we have is his signature. I
was so desperate to get out from under this "non-profitable" business. I just accepted his "word" and "signature". Our
corporation has remained open until he pays us in full. The problem is .... The owner of the land has sold the property
effective 04-01-10. The driving range will close as of then. The person still owes us $52,000.00 and is refusing to pay
us. Can we put a lein on his corporation ??? Would he not be able to disolve his corporation until he pays us? Would that
benefit us? Is there anything we can do?? I appreciate any suggestions you have !!! Thank you so very much for your time
and knowledge and advise ???
1 Answer from Attorneys
A signed document does not have to be notarized to be a contract. Also, a contract can be created by the actions of the parties, such as making a series of payments toward a purchase. So you might have a binding contract for the purchase. As to enforcing it against a corporation, you should consult with an attorney about "piercing the corporate veil"---looking behind the corporate facade at the underlying legal reality. It may be that the buyer did not handle his corporate affairs properly so as to separate his personal and his corporate obligations. Only an attorney who can look at all the details of the deal and all the paperwork can advise you about how to enforce the contract.
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