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Category: Business Law
Satisfied Customers: 4633
Experience:  23 Years business & securities law, NY and FL bars. SEC all states.
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I owned a business and brought a friend in to become a partner

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I owned a business and brought a friend in to become a partner with me. My ex business partner and I are no longer partners. Six months into the relationship I found out he was taking money (embezzling or fraud) from the business. We never had a chance to finalize our partnership agreement in writing before a kicked him out for taking money.

I soon looked into things to see how much was taken. My ex business partner worked for me as an independant sales person under my license before I asked him to go into business. I discovered he kept money and contracts from me under my license. I also discovered that he was charging cost of goods on his own personal card before we went into business with me and was selling jobs under my license and not reporting to me the sales. He pocketed the money and I have documented proof of that.

I sued him and he is claims he is going to countersue for fraudulent inducement, even though he was stealing from me. What do you see are some of my defenses if he does?
Submitted: 5 years ago.
Category: Business Law
Expert:  FLCORPLAWYER replied 5 years ago.


He can countersue for anything he wants but I can't imagine how he makes a fraudulent inducement cause of action stick. Fraud is very very difficult to plead and prove. And you have ample counterclaims against him and proof thereof.


He is claiming we never intended to give him shares of stock or profit. He was given checks, cards, online access to account, he was paid for jobs and everything, We just did not get things in writing before we kicked him out.


what does this mean he can't make it stick. Please elaborate.


What he alleges is really breach of contract, not fraudulent inducement. Who will win depends upon what proof each side has, and how well they can present it in court. If he goes to an attorney I don't think he is going to sue for fraud, since fraud is very hard to plead and very hard to prove.

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