My customer has been taken over & new company refuses to pay

We have a supply contract with a large comapny who have recently been taken over. I have a Purchase Order for the supply of services (I understand a PO is legally binding) but the new company have cancelled the contract and refuse to pay the invoice. Are they entitled to do this?

Hello Dawn

If you have supplied a service to the satisfaction of the customer and it is not in dispute then you have every right to be paid.

However if the new owners decide to terminate your supply contract from hereonin and they have done so in accordance with the terms of the contract then they can do this.

Do you think there has been a breach of your contract?

Regards



Chris

When the company was taken over, did they purchase the whole company or just the assets?

Sean Stevens wrote:

When the company was taken over, did they purchase the whole company or just the assets?

That is the key point. If the new company has only purchased the assets then they do not have to pay.

If however they have bought the shares in the Ltd company then the company still has to pay.

If I had a pound for every time this one has been tried on on my Company...

Contract, Contract, Contract

This is something in all these cases that is so important.

This should be your first port of call what does your contract say, specifically in regards to termination and also the clauses relating to the contract being able to be passed on to a third or succeeding party.

Next as Credit Safe correctly highlights was the business sold or jus the assets.

Most importantly time is of the essence here.