Lewis v. Cohen

Plaintiffs purchased a video retail company from defendants in the spring of 1985 for $250,000. When plaintiffs found that the business had more debts outstanding than they believed defendants had represented, they sued, claiming breach of the sales contract and misrepresentation. Plaintiffs appeal from a superior court judgment for defendants. We affirm in part and reverse in part.

Prior to the sale, defendants’ accountants had prepared a “statement of operations” for the business for the year ending December 31, 1984. In the purchase and sale agreement, defendants portrayed that statement as…