Solicitors' negligence on pub purchase
Judith Thompson
In a recent solicitors' negligence case, Kitsons LLP acted for the purchasers of a pub leasehold business. The majority of the price paid related to the business - only a small percentage of the purchase price related to the lease, fixtures and fittings.
After a few months, the sellers took over another pub which was only three miles away from the pub they had sold. Their regulars followed them and their original pub foundered, and the business was sold at a loss quickly afterwards.
The purchasers of the pub started Court proceedings against Kitsons, who had acted for them in the original purchase. The argument was raised that if the contract for the sale of the pub had contained a clause preventing the sellers from opening a competing pub within a certain radius, the purchasers would not have suffered the loss.
Kitsons were found by the Court to have been negligent, as they had not told the purchasers of the pub that there was no restraint of competition clause in the contract. Kitsons should clearly have advised their clients to insist that the restraint of competition clause should have been included in the contract, otherwise the sum negotiated for the purchase should have been adjusted.
However, no damages had to be paid, as the Court went on to find that even if Kitsons had provided the correct advice, the purchasers would still have bought the pub.
Whilst the claim against Kitsons ultimately failed, this case highlights the importance of obtaining good quality legal advice on the purchase of any business.
At Samuels, we have been advising clients on the sale and purchase of businesses for 25 years.
We are also North Devon's only niche professional negligence litigation practice, serving clients throughout the South West region and the UK. Our innovative litigation funding options promote access to justice for clients with strong cases.
If you have a business to buy or sell, if your solicitor failed to advise on a restraint of trade clause, or if you have had problems with a business you have sold or purchased, contact us for a free no obligation discussion about how we can help.
