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When you pick up a piece of a company, you pick up assets AND liabilities. I'm not sure how it could work any other way. If a "lifetime warranty" can define li
by lutorm 11y ago
When you pick up a piece of a company, you pick up assets AND liabilities. I'm not sure how it could work any other way.
If a "lifetime warranty" can define lifetime as "until we don't want it to live any longer", then it lacks meaning. But unless they can get away with such a claim, they acquired the liabilities of those warranties and should honor them.
- matthewmcg 11y agoActually, in the U.S. it is very common for acquirers to structure an acquisition as an "asset purchase" precisely so that they can pick and choose the assets they are purchasing and the liabilities they are agreeing to assume. In general, the buyer and the seller are free to agree to whatever arrangement they wish in the purchase agreement. There are of course limitations in background law for protection of creditors, employees, the environment, and the government's interest in certain kinds of government contracts. Also the Common law concept of "successor liability" is sometimes applied to buyers that try to escape liability. But there is no general principle requiring liabilities to follow the assets of a business.