If company A sold its business to company B, which company, A or B is responsible for "service guarantees" made by company A in the event the contract of sale does not address this matter? Company B will not take responsibility for the cost of labor Guaranteed by company A and is billing clients. Company A no longer exists, and the client is Sueing company B. The companies are in New Jersey. Please advise.

  • 3
    What does it mean that A sold "its business"? Did it sell its assets only, or its assets together with its liabilities? Jun 17 at 0:34
  • 1
    This is unanswerable (i.e., at a useful level) unless you include the relevant clauses of the contract between A and B. Jun 17 at 11:31

1 Answer 1


Obligations are between the customer and A. That does not change as long as A and B remain separated entities (i.e. there is no merger) or there is some kind of contract that alters it.

There are lots of variations. Did A separate those operations into C (at some point the customer should have agreed to that) and then sold C to B? Did A just "sell" the existing contracts to B (again the customer should have agreed, and then B is the one with the obligation of the customer agreed)?

For some forms of company, B as an owner could no on the hook for A debts, if it goes into bankruptcy, but that would not depend on the legal firm if the company and would have equally affected the previous owner equally.

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