Breach of contract in a business sale

[ziggymarley5150]

What is the name of your state (only U.S. law)? Illinois.
Breach of sales contract of an on-line business

I recently purchased an online business through a business broker in July of 2015. I had a professional company do a due diligence search to verify all the revenue, refunds, and chargebacks. Refunds were around 1 and chargebacks were at .47. In the contract there was a non-compete agreement of 1 year. Within 10 days of taking over the business there was over 30 chargebacks issued, which caused my paypal account to be frozen and I had to find a new merchant provider. In addition to the questionable chargeback numbers, the information he provided on the price of inventory was false. He stated that the average price of an account was around 4. The actual price is around 14. The private contractors that he stated were included in the sale did not want to continue at the rate that he stated. He stated they were paid 5 per hour and the actual rate that they wanted was 23 per hour. In addition to these issues, he started a new website conducting the exact same business and services as the one he sold me. A clear violation of the non-compete. He even somehow set up a link to his new site, so when customer's click on a button on my site it takes them to an advertisement to his new site advertising the same product that I was selling. My question is whether I have any legal remedy here? The jurisdiction according to sales agreement is Vancouver, Canada. I guess my question is are these breaches that I can sue for? If so how feasible is it to recover anything from these breaches? Is this a costly process?

 

[Zigner]

What is the name of your state (only U.S. law)? Illinois.
Breach of sales contract of an on-line business

I recently purchased an online business through a business broker in July of 2015. I had a professional company do a due diligence search to verify all the revenue, refunds, and chargebacks. Refunds were around 1 and chargebacks were at .47. In the contract there was a non-compete agreement of 1 year. Within 10 days of taking over the business there was over 30 chargebacks issued, which caused my paypal account to be frozen and I had to find a new merchant provider. In addition to the questionable chargeback numbers, the information he provided on the price of inventory was false. He stated that the average price of an account was around 4. The actual price is around 14. The private contractors that he stated were included in the sale did not want to continue at the rate that he stated. He stated they were paid 5 per hour and the actual rate that they wanted was 23 per hour. In addition to these issues, he started a new website conducting the exact same business and services as the one he sold me. A clear violation of the non-compete. He even somehow set up a link to his new site, so when customer's click on a button on my site it takes them to an advertisement to his new site advertising the same product that I was selling. My question is whether I have any legal remedy here? The jurisdiction according to sales agreement is Vancouver, Canada. I guess my question is are these breaches that I can sue for? If so how feasible is it to recover anything from these breaches? Is this a costly process?

I would suggest that you speak with an international business law attorney and that you also contact and attorney in Vancouver, Canada.

 

[quincy]

What is the name of your state (only U.S. law)? Illinois.
Breach of sales contract of an on-line business

I recently purchased an online business through a business broker in July of 2015. I had a professional company do a due diligence search to verify all the revenue, refunds, and chargebacks. Refunds were around 1 and chargebacks were at .47. In the contract there was a non-compete agreement of 1 year. Within 10 days of taking over the business there was over 30 chargebacks issued, which caused my paypal account to be frozen and I had to find a new merchant provider. In addition to the questionable chargeback numbers, the information he provided on the price of inventory was false. He stated that the average price of an account was around 4. The actual price is around 14. The private contractors that he stated were included in the sale did not want to continue at the rate that he stated. He stated they were paid 5 per hour and the actual rate that they wanted was 23 per hour. In addition to these issues, he started a new website conducting the exact same business and services as the one he sold me. A clear violation of the non-compete. He even somehow set up a link to his new site, so when customer's click on a button on my site it takes them to an advertisement to his new site advertising the same product that I was selling. My question is whether I have any legal remedy here? The jurisdiction according to sales agreement is Vancouver, Canada. I guess my question is are these breaches that I can sue for? If so how feasible is it to recover anything from these breaches? Is this a costly process?

The professional company you hired for verification of revenue, refunds and chargebacks did not do a very good job, did it?

Depending on the terms of the sale, and the wording of the contract, you could have a legal remedy available - one that you could potentially pursue in the US despite the operation being based in Canada. That said, this would not be an inexpensive pursuit and I imagine jurisdiction would be fought if you file a breach of contract action in the US.

You can have an attorney in your area personally review the facts and provide you with a pros and cons assessment.

Good luck.

 

[ziggymarley5150]

The professional company you hired for verification of revenue, refunds and chargebacks did not do a very good job, did it?

Depending on the terms of the sale, and the wording of the contract, you could have a legal remedy available - one that you could potentially pursue in the US despite the operation being based in Canada. That said, this would not be an inexpensive pursuit and I imagine jurisdiction would be fought if you file a breach of contract action in the US.

You can have an attorney in your area personally review the facts and provide you with a pros and cons assessment.

Good luck.

Do you know of any good lawyers in Illinois, which is where I am from. Also, ballpark estimation on cost of this? I know it's hard to say not knowing the case but are talking about thousands of dollars or tens of thousands of dollars?

 

[quincy]

Do you know of any good lawyers in Illinois, which is where I am from. Also, ballpark estimation on cost of this? I know it's hard to say not knowing the case but are talking about thousands of dollars or tens of thousands of dollars?

We cannot refer lawyers on this forum but you can check out the Illinois Bar Association site for attorneys in your area: http://www.isba.org/public

There is really no way to tell you the costs involved in taking action against an out-of-country business. Too many factors come into play. I can easily say you are talking about thousands of dollars, though. It is the "how many" thousands that is the tough part to estimate.

You can sit down with an experienced attorney local to you and discuss costs first, to see if a lawsuit is something you want to attempt.

Good luck.