How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Dimitry K., Esq. Your Own Question
Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Legal
Satisfied Customers: 41221
Experience:  Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.
18572087
Type Your Legal Question Here...
Dimitry K., Esq. is online now
A new question is answered every 9 seconds

So I am in the process of starting a new business and am working

This answer was rated:

So I am in the process of starting a new business and am working with a developer on the software that I want built. I have a Sub-contractor/NDA already signed by the developer, but with cash being tight he had asked if I could setup a profit sharing arrangement with him. He has agreed to allow me to keep 100% ownership of the company that I form, and just provide him a portion of the proceeds for a predetermined amount of time, unless he ops for working for the company full time. What kind of agreement would I be looking for? and How much can I expect to spend? I don't know of any agreements like that.

Thank you for your question. I am a New Jersey licensed professional and will do my best to assist you with your concerns.

What you are describing is simply a bit of hybrid between profit sharing and a debt agreement with a bit of an employment clause thrown in. There is no real template out there, you could either attempt to write such a contract yourself by finding various templates and combining language, or seeking an attorney to write this up for you. The terms are esoteric and unique enough that no one contact template will help as this isn't a joint venture, it is not strictly employment, but it is a bit of a hold on future profits and potential options to vest into your company. A contract like that may cost you about $1,500 from a starting attorney, and about $3,000 to $5,000 from a seasoned one.

Good luck!

Customer: replied 3 years ago.

First - Thank you for your quick response to my question and estimated costs for having such an agreement setup.


 


Finally - That is much more than I have to spend on a contract right now considering all the costs that I am incurring starting this business up. So if I were to write down what our agreement is in plain English, not "legalese" (no offense), would it still be considered binding if both parties sign it?

Paul,

No offense intended. I personally hate crafting 'legalese' agreements because unless I am trying to hide specific barbs in the terms, there is no point in making something complicated. No, you can write it in simple English provided that the terms and conditions are clear and unambiguous. Any confusion, ambiguity, or issues with terms are going to be held against you should it ever get to litigation. For example if a clause has two different but entirely plausible interpretations under law, if you as the creator hold to one version and he holds to the other, he would be the one in a stronger position to prove that as someone who did not draft the contract, the language would be based on his expectations and not yours.

Hope that helps.

Dimitry K., Esq. and 5 other Legal Specialists are ready to help you