Purchasing Cafe gone wrong

Saima

Hi there,

We have signed an unconditional contract for my long life dream to purchase and run a cafe, before settlement the current Vendor changed/updated the menu and increased prices, and was also reluctant to do all the jobs required to obtain clearance certificate from Council.. and said she will do all after we have settled, we did not agree to this and things have not been good between us, she have also been telling staff different stories and am not sure if staff will stay on, now i am reluctant to go ahead with settlement.. any ideas how we can get out of a contract... we are seeking Solicitor's help also... or should i still go ahead with contract given she have done all the work required.... i am in a brainfreeze.. dont know what to do..

askthecoffeeguy

As a cafe owner myself I would say get some independent advice from someone in industry, as well as advice from the solicitor. Not sure of the legals but I imagine that the current owner would need to fulfil their side of the agreement, in order for the contract to be binding. And don't worry about existing staff / customers - goodwill is important, but if you decide to go ahead I am sure that you will stamp your own indelible impression upon the joint anyway. And menus are easy to change, you can do that yourself. Speaking from experience I would say focus on what you need to do to get the cafe up and running, and to endeavour to get it right first time around. Many new / old customers will come in after the sale, to check it out, and that initial first impression is all important. If you decide to go ahead, in one years time, none of the things that are going on now will matter, if you are able to make a fist of it, all that will mater is that you are living the dream. And, sad to say, staff come and go, and sometimes you are better off with a clean sweep, so that you can install your vision unimpeded. And yes, good legal advice is expensive (I should know, but that's another story) - but you will save time and money in the long run. And if things aren't going according to plan, put it in the hands of your solicitors - that's what they get paid for. Hope this helps, Pat PS - you can personal message me if you need more detailed (non-legal) advice

perfectextraction

Hi, i read your letter and i can only imagine what you must be feeling - the excitement of a new cafe and the anger and the disapointment of the things that are going wrong. As a devoted manager of the cafe i run - i think that you should go through with the deal as best you can. Customers are not as dumb as we think - they are very loyal, and know when something is not being done right. If you do decide to go ahead with the purchase, there are many things that you can do to attract new and old business. If you would like some marketing ideas - feel free to contact me as i know of quite a few that are minimal cost and have great returns.

admin

Hi Sleepless - sorry to hear about your predicament... i'm not a cafe owner like ACG and PE, but i would say it comes down to the legal fundamentals, and this is where you really need to rely on your solicitor. Basically, either the previous owner is fulfilling her legal obligations (under the draft agreement) or she's not, and it should be fairly clear from the terms of the agreement - and that's all there is to it. Regardless of your dream, if you and your lawyer are not confident she has fulfilled her obligations, you should probably advise her accordingly and not settle - it seems to me as straightforward as that... but nothing here can take the place of your solicitor's professional opinion! Let us know how you get on. best -A

perfectextraction

Hi, Has the previous owner signed a clause to say that she will not open another cafe in area within a certain time frame?

askthecoffeeguy

I have it on good authority that such clauses are meaningless and nearly impossible to enforce!   p

takeaim

Sleepless, as the others have said, seek legal advice. Even though you've signed an unconditional contract there may be conditions the vendors must comply with set by council, depends on individual councils. perfectextraction, as Pat has said i'm sure there are ways around a restraint of trade clause, supposedly very easy when it comes to companies. I'd love to hear about your marketing ideas, always open to trying something new.

FreshCoffee2

Just taking a lateral view.....the outgoing owner is doing you a favour by increasing the prices and making changes before you take over.  That way she takes the heat (if there is going to be any)  from any possible disgruntled clients, rather than you. For the rest, go straight to your solicitor. Regardz and good luck, FC

coffee_head

Hi there, We have signed an unconditional contract for my long life dream to purchase and run a cafe, before settlement the current Vendor changed/updated the menu and increased prices, and was also reluctant to do all the jobs required to obtain clearance certificate from Council.. and said she will do all after we have settled, we did not agree to this and things have not been good between us, she have also been telling staff different stories and am not sure if staff will stay on, now i am reluctant to go ahead with settlement.. any ideas how we can get out of a contract... we are seeking Solicitor's help also... or should i still go ahead with contract given she have done all the work required.... i am in a brainfreeze.. dont know what to do..

How can you sign an uncoditional contract? All contracts have conditions. A solicitor should always be used. They may cost a bit but a bad decision costs a lot more. No to the last question. She is selling the cafe - don't settle until you are happy. Unless the contract you signed was done by a professional, it probably wouldn't stand up in court or would be full of loopholes. But bluff her and you call the shots. And if things need fixing, tell her it'll come out of the purchase price.

askthecoffeeguy

and if that doesn't work let me know and I'll come round and sort it out! P

JF

I think everyones covered the obvious.. Sleepless - if you want some comfort (even though I hope you've learned the lesson of never signing any agreements without conditions, and without legal advice), many contracts (even ones with legal basis) have difficulty being enforced in a court in Australia. Basically, an unconditional contract which has been breached - the plantiff would have to prove that the area of the agreement you (defendant) breached - and would then need to prove it was fair and that you willingly and educationally accepted that particular clause knowing the possible consequences... Good luck..

askthecoffeeguy

I think its fair to say that sleepless has left the building! If not, Sleepless, could you please provide us with an update as I for one a curious to know how you went! P