sole proprietorship business management

original question; Many household services professionals such as carpenters, plumbers, and electricians do business as sole proprietors. If they make a promise to their customers that their work (not the products themselves) will be free from defects for a certain period of time (i.e., a warranty), and then subsequently sell their business assets to another individual, should the buyer be bound by the promises made by the seller? Why or why not?

Sarah Z :

In my opinion with this scenario, I do not think that the buyer should be bound by the promises the seller made to their customers. We learn in our textbooks in chapter 11 that these sole proprietors, from a legal viewpoint, are no different from the person (proprietor) and their sole business.The example in the textbook was Lily and her growing Lily’s landscaping business. The company and Lily the person are the same thing/ person. Therefore, in this scenario, the person doing the work is the one making the promise of their personal work, not the company or materials.

When they sell the company they are not also selling their promise that their work will be free from defects, because they are no longer doing the work. The promise is good for a certain period of time and that time can end when the seller sells their business to the new buyer.

A warranty is generally a guarantee or promise of something. If the seller had made a promise of their product to their customers and offered a warranty, then yes the buyer needs to investigate the clause of those warranties. The buyer should be made known of the warranty on the products before taking new ownership and decide if they will keep the warranty until it ends or offer some new type of warranty.

However, as I stated before in this scenario, the warranty is on the work, not the product so I do not believe that the buyer should be bound to that promise.

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