Can a previous owner who is selling me a business just take it back?
Question Details: I have bought a business with the previous owner financing it. I got into a bit of a mess and got behind on the rent of the building not owned by the same person. They are a co signer of sorts on the lease. For the past 4 months I have been busting out and caught up $1400 of the $1600 I owe. The previous business owner who I am still paying is claiming that she can come back in and take it back from me the same day. Is she correct?
She can only take it back IF the contract or agreement of sale specifically provided that she could regain possession if you feel behind on or defaulted on payments. If the agreement did, she can take it back in accordance with the provisions in the contract for default: such provisions or terms are legal and enforceable.
But there must be something in the contract giving her this right. Without such a term or provision, she cannot regain the business, but can sue you for the money you owe her but have failed to pay.