Thank you for your response. There are a number of issues with the partnership
conversation. First and foremost, you need to understand that there can always be fight regarding whether there was a partnership or not. And what happens from there depends a lot on the facts.
One fact that is relevant is how your business is organized. If it is a corporation
, or sole proprietorship is going to make a difference. Now the fact that this was all verbal makes it hard to prove that it was an actual offer, and if you can say that this was merely an initial conversation that was always meant to lead eventually to a written contract
, which would be the operative contract, then that would be better for you. But the lack of a written offer, acceptance, or partnership contract is going to make things better for you.
Also if you have other partners that have all signed some sort of agreement with you, that would be further evidence that there never was a partnership with this individual.
Since there are disputed issues here, you should have him sign a full and final release. Make it clear to him that the $150 and any continued employment next summer is contingent upon the signing of this agreement.
The agreement should state, in unequivocal terms, that there exists no partnership, profit and/or expense sharing agreement, alliance, or other co-equal relationship between the two of you. You should state that you felt that there never was an agreement in the first place, and that if there ever was, he is waiving, fully, completely, and finally, any and all rights to recover any property and/or payment, and waiving any and all claims, past or present, up to the moment of execution of the document, that he has against you, in any capacity. Make sure that there is a clause that states "both parties agree that there has not been and there is not currently a partnership of any sort between Mr. X and Mr. Y" [change these values, or course]. Finally, have a clause that states that this agreement can only be modified in writing, signed by both parties.
Once you get this in writing, make sure that you sign it and he signs it, and puts the date on it. It would be good to get it notarized, but it is not necessary. Give him a copy and keep the original in a safe place, with a couple of copies in a couple of other places (so you have backups in case the original is lost, stolen destroyed, etc...
I hope that helps. Good luck to you and your business!