Replies to post #39203 on California Grapes International, Inc (CAGR)

[pantherj]

No, you are not getting it. It is legally binding as to those parties who entered into the agreement. It cannot effect the rights of a third party who is not party to that contract. One cannot give away a third parties rights by contract between two other parties.

Ex: I own a store and call it "Panthers Quick Stop." You as vendor supply me with candy bars and invoice me. Before the invoice is paid, i sell the store and it is renamed to "Cougars Corner." Does that mean the store no longer owes you, the vendor the money? The vendor must be paid. Any indemnity agreement, such as the one between GDHI and Diamond, gives the store the contractual right to collect from me, the old owner. But it does not wipe out the debt owed to you, the vendor. It is an obligation upon the business, not an individual. the only way it could have been wiped out is through BK.

[ACTC]

Alyssa,

I think you are right about the part that gdhi can go after Elliot based on the agreement but If DPWS still had liabilities that were not known to gdhi, then those liabilities can be collected from gdhi.

I've run into a similar situation where one of our clients bought a property which had outstanding violations. The violations were not known to our client at the time of purchase. . But guess what? Our client is responsible for correcting those violations not the previous owner. He tried using this defense in court and it did not hold up. Basically it came down to 'yea we know you didn't do it, but you should have done your due diligence'

Now had our client made an agreement with the previous owner like gdhi did he would then be able to go after the previous owner and collect.

Also this is not in Florida so of course the law may be different there but probably not a whole lot.