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  1. #1

    Default Breach Of Promissory Note, and Breach of Contract Countersuit

    Agreement to purchase a franchise located in Miami, Florida was executed between Party A, a Florida LLC, ("seller") and Party B, a Florida LLC, ("buyer"). This agreement was of the form stipulated by the Franchise Agreement and was also signed by the Franchisor ("Franchisor") with a choice of law provision for Virginia.

    The Buyer further executed a Promissory Agreement and the Member/Managers of the Buyer signed a Personal Guaranty (each) for the Promissory Note.

    The Buyer then failed to make payments after the 1st one. After numerous failed promises to pay. The seller (us) finally threatened to sue for failure to pay - they buyer (after cursing the seller out) - said go ahead. So we did.

    The Buyer has now countersued - breach of contract under the Purchase Agreement - claiming that in a previous email communication the seller represented that the business had over 300 customers (we did). The business actually had 276 customers (we honestly thought it was over 300 at the time - we missed the fact that certain customers were listed more than once due to purchasing several different product lines). However, the Purchase agreement has a "no representations" and "buyer has performed all due diligence etc. and is not relying on any oral or written representations clause".

    So the questions:

    1) Attorney is filing Motion to Dismiss however, there is an argument about whether the applicable law is Virginia or Florida. I think Virginia is more clearcut - but my attorney explained that makes the process more complex and runs up the bill - is there any way to get this decided under Florida law?

    2) Promissory Note clearly states that legal fees are paid by the borrower should there be a lawsuit required to collect. Legal fees pertaining to the defense of the countersuit would or would not be "collectible"

    3) If #2 is they would not be collectible by the prevailing party - then would there be any other grounds on which to attempt to collect?

    Thanks a million for your assist (and sorry for the long post)

  2. #2
    Join Date
    Sep 2005
    Behind a Desk

    Default Re: Breach Of Promissory Note, and Breach of Contract Countersuit

    This is apparently a contract you propounded, which includes a choice of law provision, so you can expect to be stuck with that provision. Your leading option would be to try to see if the defendant will agree to waive the choice of law provision and have the dispute resolved under Florida law.

    You will have to discuss the enforceability of the provisions of your promissory note with your lawyer. We haven't read it.

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