Liability is a business’ financial debt or obligations that emerge over the course during business operations. They are settled over time through the transfer of economic benefits including money, goods or services. As the Black seeks to recover the unpaid balance of the purchase price together with special damages arising from a Purchase and Sale Agreement made with the White brothers in 2008, it is clear from this content that liability has been incurred by the Black. Before selling the business, the White were in charge and operated the business for a couple of months before getting informed that the business is not complying with the zone by-laws and this would have led to their license to be revoked. From all these factors that affected the business, it collapsed prompting the plaintiff to claim for the balance. White struggled with his grocery business that he acquired in 1975, to maximize his income, he combined the grocery with meat which was sold at a wholesale price to restaurants.
He developed better ways of doing the business by chopping and grinding the cheaper cut that he used to make donair. The business picked up and grew successfully. The clientele base grew too as the demand for the products grew drastically. as the business grew, he needed more space for expansion and he had to acquire a license from the local authorities by extending a new building to cover the old space. The major challenge he faced is that the permit did not allow commercial activities but residential only. The volume of sales increased and he had to add freezing equipment so he had to ship in the refrigerating container. Since he handles food, his business premise was inspected frequently for the purpose of food safety. In 2006, he sold the business at a 50% less the wholesale price. From this move, it is clear that he made a fatal error by selling the business at a lower price after struggling with it for long and building the customer base.
Before selling the business to the White, Black did another mistake of employing the Whites at his business who familiarized themselves with all the activities within his premises including the financial stability of the business. The agreement stated that the business should continue to operate as it operated. This motive is another mistake that to the business since the black should have let the White run the business on their own as they gradually drop Black’s ways of business and adapt to their way of doing business gradually. Another mistake that took place is during the transactions that were done verbally. Serious business deals should be signed down by the relevant parties. During the transactions, both parties did not involve any relevant authority for advice on the same. Due to ignorance, the developing issues are really costing their business. At the end of it all, none of the parties should win and none should lose because, from the beginning of the business, they did not involve any relevant authority for advice in the whole process.
American Bar Association. (2012). Business law today: The magazine of the ABA Section of Business Law (4th ed.). Chicago, IL: American Bar Association Section of Business Law