Selling my business

[utahma]

What is the name of your state (only U.S. law)? Utah.

Hi,

I am selling my business that I have had for a year. Someone sent me a contract resembling an offer, but it doesn't seem right to me.

First of all, there is no price on the "offer." They want to put down $1000 as earnest money, run the business in my name for 30 days, then offer me a price. I am guessing there is a legal risk in letting someone do business in my name. They also want access to everything we have during that 30 days including client lists. Also, the contract says I can't discuss selling the business with anyone during those 30 days.

The contract itself is about 3 pages long. About how much should I expect to pay to have a contract lawyer take a look at it and if needed rewrite some of it?

Thanks.

[tranquility]

If price is not there, it is not an offer.

You might consider this an option contract offer.

There is no way to guess how expensive re-writing it will be as an attorney may advise you and help you discover all the issues when you sell a business and that could take some time.

[HomeGuru]

Originally Posted by utahma

What is the name of your state (only U.S. law)? Utah.

Hi,

I am selling my business that I have had for a year. Someone sent me a contract resembling an offer, but it doesn't seem right to me.

First of all, there is no price on the "offer." They want to put down $1000 as earnest money, run the business in my name for 30 days, then offer me a price. I am guessing there is a legal risk in letting someone do business in my name. They also want access to everything we have during that 30 days including client lists. Also, the contract says I can't discuss selling the business with anyone during those 30 days.

The contract itself is about 3 pages long. About how much should I expect to pay to have a contract lawyer take a look at it and if needed rewrite some of it?

Thanks.

**A: between $500- $2500.

[utahma]

Thanks guys. 1 more question. Should I even consider letting them "test drive" the business for a month in my name or is that just too dangerous?

[Some Random Guy]

OK, so you want to give complete control to your business to someone else but still want to retain ownership and you don't see this as a really bad idea?

Consider the following scenarios:
1. He closes your businesses doors for a month and walks away with your client list.
2. He buys a large amount of merchandise with your credit, realizes he can't sell it and walks away.
3. He enters into new contracts and business arrangements, saddling your company with debt.
4. He pays himself a monthly salary of $5,000.
5. He agressively tries to market new products/services to your existing clients to see if they will buy more. This then pisses off half of your clients who then leave.
6. He takes your client list and business processes, and leaves in one month to start up a competing company.

Get a lawyer and write a more reasonable contract. Something that protects your client list and leaves you in control but gives him access to the information he needs to evaluate the potential of your business.