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    hcjhicks's Avatar
    hcjhicks Posts: 2, Reputation: 1
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    #1

    Apr 20, 2009, 01:49 PM
    Changing terms of a business contract
    I purchased an accounting practise. The fellow I bought it from is carrying a five year note for a portion of the purchase price. He is struggling financially and would like for me to pay off the entire amount this year. A friend mentioned that in this case I should offer him 60 cents on the dollar. If that standard business practise? I have some ideas of how to come up with the money. I'm trying to figure out how much I should offer him. Thanks for the help.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #2

    Apr 20, 2009, 01:59 PM

    First, as long as you have been paying according to the provisions of the note, he can only REQUEST that you pay the balance. You have a contract with him to pay over 5 years.

    So, if he wants the balance up front, you can negotiate with him a discount. If you want to start with 60 cents on the dollar that's up to you. Whether he accepts it or not or makes a counter offer is up to him.
    hcjhicks's Avatar
    hcjhicks Posts: 2, Reputation: 1
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    #3

    Apr 20, 2009, 02:17 PM
    I know I don't have to pay him off early. I would be more than happy to buy him out but would like some ideas of what to offer.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #4

    Apr 20, 2009, 02:21 PM

    I suspect that 60% is a low offer, but that is what negotiation is about. You offer low, he counters and then you haggle back and forth until you agree.
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