John and Jennifer Margeson entered into a contract to sell a weight-loss franchise business called Inchesa-Weigh to
Question:
John and Jennifer Margeson entered into a contract to sell a weight-loss franchise business called “Inchesa-Weigh” to Theresa Artis. The parties signed a written “Asset Purchase Agreement” on October 1, 2004. The purchase price was $125,000, payable at closing. Later, on October 7, 2004, the parties signed a second document entitled “Sales Agreement Addendum” This addendum set the price of the business at $155,000, with $135,000 payable at closing. Of that $135,000, $125,000 was to be paid from the proceeds of a loan secured by Artis from First Bank, and $10,000 was to be paid in cash. The remaining $20,000 of the purchase price was to be paid to the Margesons in monthly installments based on sales. The closing was set for October 18. On that date, Artis tendered the $125,000 from the First Bank loan, together with $10,000 from two personal checks drawn on Artis’s bank account. Thereafter, the relationship between the Margesons and Artis soured. Artis stopped payment on one of the personal checks she presented at closing, and she stopped making the monthly payments in March 2005. The Margesons sued Artis for breach of the Addendum. Artis claimed that the Addendum was not enforceable because it was not supported by consideration. Who is correct?
Step by Step Answer:
Business Law The Ethical Global and E-Commerce Environment
ISBN: 978-1259917110
17th edition
Authors: Arlen Langvardt, A. James Barnes, Jamie Darin Prenkert, Martin A. McCrory