The business world can be risky and, while the prospect of being your own boss is an exciting one, if you buy a business that ends up not being all it was promised to be, it can be a real liability. If you suffer loss as a result of the seller not being entirely honest with you or even honestly mistaken in his representation, you may be able to make a claim for breach of and contract and misleading and deceptive conduct.
In every business sale, the seller wants to get the best price they can, and will, of course, present the business to you in the best possible light. Some sellers, however, distort the accounts, turnover, profit and other financial data to create a more attractive – but inaccurate – picture of the business. As a result, you may decide to buy the business or pay more when, if you knew the whole truth, you would have walked away or made a lower offer. Depending on how far the truth is from the image portrayed by the seller, you could suffer a huge financial loss because of the seller’s deception.
Fortunately, there are protections under the Australian Consumer Law which makes it illegal for any person in trade or commerce to engage in conduct that misleads or deceives, or is likely to mislead or deceive. It doesn’t matter whether the person intended to mislead or deceive – only whether the overall impression created by that person’s conduct is false or inaccurate. It is possible to mislead through giving incorrect information, or even by saying nothing when it is reasonable to expect that the information would have been disclosed.
If you have purchased a business, and later found out that you were misled as to a material fact that may have impacted upon your decision to buy the business, or meant that you would not have paid as much for it, you may have a claim against the seller for misleading or deceptive conduct. There are several remedies available to you if you have suffered as a result of the misleading or deceptive conduct of another, including:
If you believe you may have been the victim of misleading or deceptive conduct during the purchase of a business, you should seek legal advice as soon as possible. There may be urgent steps that can be taken to limit your loss (particularly if the sale is not yet final).
Our lawyers who are experience in business purchase disputes can help you claim back your loss.
Simply contact us on 1300 907 335 or complete the enquiry form on this page.
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