Can I still face an indemnity claim after the buyer resold the business?

A seller’s indemnity is a promise made to the buyer under the purchase agreement. When the buyer resells, the question is whether that promise travels with the business, whether the new owner can use it, and whether time is still running. None of that is answered by the resale alone. It turns on the agreement’s wording and on the limitation rules for people who claim through someone else.

Check the assignment and successor wording

Ask whether the agreement lets the buyer assign its rights, whether the seller’s consent is required, and whether it binds successors and assigns. Ask whether the indemnity is described as personal to the original buyer, and whether the survival period is counted from closing or from a later event. These are points of contract, so the answer is in the document you signed.

How successor claims are timed in Ontario and British Columbia

Ontario’s Limitations Act, 2002 says that where a person claims through a predecessor in right, title or interest, the person is deemed to have knowledge on the earlier of the day the predecessor first knew or ought to have known and the day the person claiming first knew or ought to have known. British Columbia’s Limitation Act says a claim of a person claiming through a predecessor is discovered on the earlier of the day the predecessor discovered it and the day the person claiming discovered it. In both provinces, the buyer’s own knowledge can therefore start the clock for whoever claims after it.

Assignment under the Civil Code of Québec

Article 1637 lets a creditor assign to a third person all or part of a claim or right of action it has against its debtor, but not in a way that is injurious to the debtor’s rights or makes the debtor’s obligation more onerous, and article 1638 says the assignment includes its accessories. Under article 1641, an assignment may be set up against the debtor and third persons once the debtor has acquiesced in it or received a copy or a pertinent extract of the act of assignment or other evidence of it. If your agreement is governed by Québec law, ask whether a notice of assignment reached you.

What to do if you hear from the new owner

Do not ignore a notice because the buyer sold. Send it to your lawyer, check the survival date, and ask for evidence of any assignment. See reps and warranties vs indemnities and the purchase agreement, clause by clause.