Assume that I operate an incorporated (fictional) business, with the following points in mind: The supplier established a binding contract providing sole distribution rights; The agreement was breached as the supplier sold the goods directly; The supplier has always been paid for the inventory prior to this promptly; The products underwent fluctuations in quality, leading to a significant clientele loss; The previously unheard manufacturer now has a loyal market that we established; The business has closed due to significant uncollectible amounts and losses. In spite of the losses, suppose that the venture sustained until the second point was brought to light. Thereafter, imagine that the supplier wanted to collect their due (unpaid) amounts for inventory. With this in mind, kindly answer the following four simple questions: Would they have a chance of succeeding despite the clear breach in contract? Could the closing business’ outstanding amounts be used as compensation to them? Would the business be reimbursed for the establishing of the brand? In courts, can the owner(s) of the business be held personally liable for the outcome? Kindly take a moment to answer the aforementioned four questions, and I will leave reputation points! Likewise, anything unrelated will be reported to moderators. Thank-you for taking a minute to respond.
IMO 1. Would they have a chance of succeeding despite the clear breach in contract? Yes- I would say this is two seperate issues. 2. Could the closing business’ outstanding amounts be used as compensation to them? Yes - but totally at the mercy of the courts. 3. Would the business be reimbursed for the establishing of the brand? No, as you profited from it. What you should be seeking is damages for stress and compensation for the loss of income to date and loss of projected income to the end of the contract based on sales and growth prior to the breach. 4. In courts, can the owner(s) of the business be held personally liable for the outcome? Depends on the scale of the company, if it is a very large company it may be the owners really had no part in it. You should make them aware of it in writing as soon as possible to show that you have taken steps to resolve this at the highest possible level. Ultimatley the head of the company is resposible for how that company conducts business. Finally, I know this is a fictional example but only a lawyer can advise you on the law where you are. And of course its not what you know its what you can prove.
Thank-you; reputation points added. I always thought that the point of being incorporated was partially personal protection from lawsuits.