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Q: I had a contract to purchase a local business. At the last minute, the seller told me that he would not close on the sale. Can I force him to sell?

A: In reviewing your situation, the first question should be whether you have complied with all terms of your contract. If you are in breach of contract, your seller may be justified in refusing to close. To try and force the seller to comply with the contract, you must show that you complied with the contract and were ready, willing and able to conclude the transaction.

If you sue the seller to force a closing, you are seeking relief known as specific performance. Specific performance may be awarded by a court where the subject of the contract is unique and money damages alone will not thoroughly compensate a buyer for the seller’s breach of contract.

You must first establish that the contract is valid and enforceable. The Florida Supreme Court has held that if there is any doubt about the existence of a valid contract, specific performance will not be granted.

Assuming you have a valid contract, you will need to prove the business you were purchasing is unique. Because businesses have a customer base, goodwill, location and other attributes that generally make each business unique, you should be able to overcome that hurdle. But, will you still want the business after protracted litigation to force compliance with the contract? What if the business declines in the interim or the seller sells off some of its assets?

Because litigation takes time and the business may change, you may also ask the court to award you damages. In a specific performance law suit, the court is asked to place the parties in the position they should have occupied if both complied with the contract. That means a buyer is entitled to lost profits, if the buyer can prove profits that would have been earned while he operated the business.

Proving lost profits for an established business is usually easier than a startup. There is a track record. There is also the seller’s operation of the business after the time that the business was supposed to transfer.

Your entitlement to lost profits can even extend beyond the actual closing date if you can show that action by the seller caused harm to the business. This might involve intentional cancellation of contracts by the seller or business lost by poor performance.

If the seller has sold business assets, you will have a good chance of the court awarding damages equal to the value of the missing assets. The measure of damages is generally the greater of what the seller sold the assets for or actual market value of the missing assets. To the extent that the missing assets affect profitability of the business, you might also recover additional lost profits.

Believe it or not, the seller may also have a claim for damages. Even though the seller is in breach of contract, courts will award a seller interest on the purchase price from date the contract was supposed to close until the actual closing. Again, the court is trying to place everyone in the position they would have occupied if the transaction had timely closed.

Florida follows the rule that a seller at fault is not allowed to recover damages against an innocent purchaser where the damages would exceed those awarded to the purchaser. A recent Federal Court case refused to award the seller any interest on the purchase price where the interest would exceed the lost profits awarded to the buyer.

In addition to proof issues, there is a limited window for specific performance actions. The Statute of Limitations for specific performance is one year.

Similar principals apply to the purchase and sale of real property and other unique assets. These cases can be complex and proving damages can be difficult. This makes it critical that you retain an experienced attorney as soon as possible.

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William G. Morris is a lawyer with offices at 247 N. Collier Blvd., Marco Island. The column is not intended to be legal advice for specific circumstances. General questions can be sent by e-mail to wgmorrislaw@earthlink.net or by fax to (239) 642-0722. Read other columns at http://www.wgmorris.com.