What rights does a seller have if their business transfer agent goes into administration?

As with most industries during the current recession, a number of business transfer agencies have become bankrupt in recent months. Adam Bannister, who writes for BusinessWings.co.uk and BusinessesForSale.com, asked a couple of business transfer agents about vendors' rights when their agent goes into administration.

Derek Burgoyne, Cornerstone Business Agents

"This is of course a legal issue and business owners concerned about it should seek legal advice. When signing an agent's contract a business owner could insist on a clause being inserted that states the agreement is null and void if the broker enters administration – not a bad idea in the current climate!

"In the last 12 months or so various business brokers have gone into administration. In these circumstances the administrator has either sold the business or contracts the business holds to other business broker companies, who have continued marketing the businesses.

"As these transactions have involved large sums of money it is assumed that contacts could be sold/transferred and therefore the client would still be bound by the agreement."

David Rhodes, Horizon Business Agents

"The contract would be at an end, but if the administrator sold the rights of that contract elsewhere then they would still have a contract with the new owner."