NSW Business Owner Changed Mind - How to Get Deposit Back?

[Nazish]

Hello,
I was currently in a deal with a business man of purchasing his take away shop business at Liverpool NSW. I ended up giving him $2000 deposit and did my shopping for the shop. I went to the mayor of Liverpool, lawyer and the shop's real estate. The only thing was to sign up for the paper works for the business to get the transfer. Unfortunately, he has now changed his mind and left me with all those furniture and other stuff like that. Is there any legal action I can take against him under commercial law? I have sold all my jewellery at low prices just to pay him off.

 

[Rod]

Possibly. Depends on the details of the events and when they took place. If a contract was made then you have the makings of a case against the owner. The difficulty you face is that the owner is unlikely to compensate you unless ordered to by a court and that will cost money. You need a lawyer to tell you whether or not in your circumstances your case is strong enough to win in court.

Sorry can't be more specific.

 

[Sarah J]

Hi Nazish,

1. Have you signed a provisional sale and purchase agreement?
2. If so, what does the document say about backing out of the business sale?
3. Usually, in a business sale and one party backs out the last minute, that party will need to compensate the other party in the form of a penalty. Is there a penalty clause in the contract?
4. If not, you will need to go to court and argue breach of contract for compensation or specific performance to complete the sale.

 

[Sophea]

Further to the options Sarah has raised, you may also have a claim in equitable Estoppel to enforce the contract based on the fact that you have relied on the agreement to your detriment and have suffered loss as a result based on the case of Walton's Stores v Maher
. However, depending on how much money is involved this may be overkill - as this remedy is only available through the supreme court.

 

[John R]

Hi @Nazish
This is an interesting situation - How'd you go with obtaining a refund of your deposit? Were you able to sell/return any of the items that you'd purchased for the shop (I assume - from the shop that you had originally purchased them at)?