How to collect on a defaulted payment?

UPDATED: Feb 9, 2012

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How to collect on a defaulted payment?

A friend sold his T-Shirt company with the stipulation in the contract that if they buyer defaulted his monthly payment that my friend would reclaim the property. How does he go about getting his company back without getting a lawyer involved? What are his options?

Asked on February 9, 2012 under Business Law, Hawaii


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Contracts are enforceable; if the contract has been breached by the buyer, the seller can sue for monetary compensation (i.e. the money owed) and/or for "specific performance"--i.e. for a court order enforcing the term of the contract requiring the return of the business. If your friend is suing as an individual, he could bring the legal action himself, though that is *not* advised, by filing a complaint in the appropriate court. Havin a lawyer will greatly increase his chance of success.

If the seller was not your friend personally, but rather a LLC or corporation he owned (e.g. an LLC of his sold its name, assets, etc. to the buyer), then he will need an attorney; a non-lawyer may not represent a limited liability company or corporation.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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