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It really depends on the circumstances but often a contract makes no difference. If the service provider disappears (bankruptcy, acquisition, natural disaster)
by flukus 8y ago
It really depends on the circumstances but often a contract makes no difference. If the service provider disappears (bankruptcy, acquisition, natural disaster) and there is no one to sue then the contract is irrelevant. If it's core functionality and you go out of business then being able to sue but having no money to makes the contract irrelevant. If the provider can absorb the cost of a lawsuit because you're their only customer and it's cheaper to drop you then a contract could be irrelevant. If the provider want's to launch a competing service and breaching the contract is just a cost of doing business then the contract is irrelevant.
Contracts can be valuable but often they are over valued.
- tinus_hn 8y agoContracts don’t disappear on acquisition, of course. The new owner takes on the responsibilities of the acquired company, as well as its assets. Companies also are not physical items that can disappear due to natural disasters. The only ways they can disappear is by closing down, and that does mean honoring contracts, and by going bankrupt and that means using all leftover assets to satisfy all the parties whose contracts you’re breaking. And no, you can’t just transfer all assets away and leave a shell to go bankrupt because that is fraud and the judge can nullify the transfers.