As a consequence, a dispute arose between our client and the buyer who had defaulted on payment of the deferred purchase price. The sale agreement provided that, on the occurrence of such a default, our client could exercise an option to reacquire the business by taking back the shares he had sold. However, given the economic turmoil and uncertainty at the time, this was not a viable choice for our client, who rather fancied continuing his retirement! Our client sent an email to the buyer to confirm that he did not want to exercise the call option and that he expected to be paid the full outstanding balance of the purchase price (more on this later).

 

When the market in which this business operated had been restored to some sense of normalcy – some two years later –our client instructed PDT to recover the outstanding balance of the purchase price owed to him by the buyer. The buyer defended our client’s demand for payment saying that (the somewhat clumsy) language used by our client when declining to exercise his call option was a sufficiently clear indication of our client’s intention not to pursue the buyer for the balance of the purchase price – in other words, that because of the impact of the pandemic on the business our client had agreed not to enforce his contractual rights under the sale agreement.The buyer suggested that this prevented our client from pursuing a legal claim because of the doctrine of “promissory estoppel” (a legal principle which stops a party from going back on a promise that they have made to another party where that other party has relied on the promise to their detriment).

 

Our client was not impressed by the buyer’s defence. Our client had never intended to waive his entitlement to the balance of the purchase price and, whilst the language he had used was not as clear as perhaps it should have been, the buyer was taking advantage of this to suggest an interpretation that benefitted him. Our client was quite prepared to issue a legal claim to recover the sums owed to him under the sale agreement. However, with Justin’s assistance negotiations took place between the parties without the need for us to issue a legal claim. The outcome was that our client achieved a very favourable settlement, especially considering that the buyer was a limited company which is always a material fact in the decision matrix of litigation and the recovery of a successful judgment. He could continue his peaceful retirement without needing to resort to litigation.

 

Our client had this to say

(from a cruise ship somewhere in the Atlantic):

 

“From the moment of my initial consultation with Justin, I knew I was in a safe pair of hands. Justin quickly grasped the issues and laid out a strategy which he followed masterfully. I was impressed by Justin’s expert negotiation skills, indeed, he delivered more than I had ever expected. I have no hesitation in recommending the services of Justin and PDT.”
 

How can we help?

PDT has specialist expertise in resolving contract disputes. If you would like to learn more about how we can help resolve such disputes then please contact Justin McConville or any member of the Dispute Resolution team.