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I have a question about an agreement that I signed as an independent
I have a question about an agreement that I signed as an independent contractor with a buyer. The buyer was developing a financial program and needed my assistance to develop the product that went with that program. The agreement was that he would pay me 5% of the revenue that his company makes. The contract was only signed after I had already invested about a year working with him... this happened because I knew the guy and I continued to work in good faith.The contract commencement date (per contract) was Jul 28 2014 and the end date was Jul 28 2015. It also says that the buyer may extend term of the agreement for up to 10 years, by giving written notice to the seller (me) no less than 30 days prior to the expiration of the term.Jul 28 2015 came and went - the contract expired, but I continued to work with him as goodwill and also because he said he will renew the agreement soon. Finally in Dec 2015, when I still didn't have the new agreement and wasn't making any money (because he wasn't making any money), I decided to quit. I discussed and told him my decision over the phone. However, since the contract term had already expired on Jul 28 2015, I did not think of giving him any written notice (as required by the contract)... just told him over the phone that I do not wish to continue.When I told him that I do not wish to continue on the original agreement, he and I discussed new agreement terms, where he was to pay me for my services on the ongoing basis, irrespective of whether he generated any revenue or not. I discussed this over the phone with him and emailed this agreement in simple language to him. This agreement does not have a start or end date. It is not even a contract - it just says that he will pay me an hourly rate for my services plus a fixed fee for every new customer he asks me to give the product to. He responded that he was okay with that and will get that in a document and sign and send it back to me, which he never did. I continued to work with him on what I believed was the new agreement and he paid the first 4 invoices. He then stopped paying me and has two invoices pending since Apr 14.QUESTIONHe today emailed me sort of a notice saying that even though the term expired on Jul 28 2015, the fact that I continued to work with him, even after the expiration of the original term is deemed as the auto-renewal and the law says that by doing so, I am bound by all the terms and conditions of the original contract. He did not pay me for the first 2 years I worked for him, other than a retainer fee of $5,000 (Feb 2015-Jul 2015) and another $249 for one sale he made in Aug 2015. He has not paid my latest two invoices (~$1,000) per the new agreement and now he is threatening to sue me for the breach of the original contract, because I have refused to continue to work with him any further.My question is - can he really sue me for this? Does the law treat my continued working with him, even after the contract expiration, as a renewal of the original agreement? He is also forcing me to hand over the product that I developed over two years (it's a software) including the code and all the rights. Can he legally do that?
Richard,Happy New Year. Glad to see you are still
Hi Richard,Happy New Year. Glad to see you are still here.We have a small business client (LLC partnership) that has 4 equal partners. One of the partners is leaving, and has accepted a position at a current (and substantial) customer of his company (our client).Everyone is fine with the departure of this financially-weakest partner (and friend), as his new job will be much higher paying, and much more stable for the outgoing partner and his family...eliminating a constant source of worry for the remaining partners.However, I see some things brewing that are a cause for concern. You could say that our client company is/was struggling severely, which is why we came in. But they are going to make it, and eventually grow into a strong successful company and brand. The outgoing partner is going to be in a position at his new job (again, a current customer) to give work/additional work to his former company, our client. And I'm sure he feels this is fine, because there is a current vendor-customer relationship in place...and as long as the work is done well, it has to be placed somewhere anyway.But there are some discussions about the outgoing partner hanging onto equity in the previous company, with the hopes that it will turn into something in the future. And you have to speculate that the outgoing partner is thinking maybe he could return someday.I've pointed out the very-obvious (to me) potential for major conflict of interest, if this is not handled very cleanly and above-board.In the current company, the owner's equity/capital accounts are negative, and I'm not sure there is any real net monetary value...unless you get real speculative and forecast out some goodwill calculation. Even then, the huge risk of near-term total loss of a young, financially-strapped, troubled, small business would outweigh any such goodwill claim.None of the partners put in any great sum of money when they started the company a few years ago. Maybe $5-10-15k max each, and nothing going forward. And in the current state, big debt, big risk, and negative capital accounts, there is probably nothing "owed" to the outgoing partner, in a real business sense. He just gives up his salary, and moves on I suppose.But how should this actually play out, in your legal/business opinion? If neither the individual remaining partners, nor the company, has any money to "buy out" the departing partner - and there is not really any net value to buy out anyway - what should this transaction look like?Where does the departing partner's equity go, so to speak (again it's an LLC)? 4 partners each own 20+%, and one guy owns a small 5-9% share.I guess it wouldn't be out-of-the-question for a friendly departing partner to hang onto some equity, as he moves on. But with him leaving to work for a current customer, and being in a position to give additional work to the company he is leaving, I don't like the way that feels at all.Your thoughts?Also, the CPA is advising that we convert the current LLC to a corporation by the Feb deadline this year. I'm not sure if that would have any bearing on what the outgoing partner might be able to do with existing ownership/future stock in the current company.As always, thanks.
I am purchasing a dental practice in Virginia. The dental practice
I am purchasing a dental practice in Virginia. The dental practice is incorporated as a LLC, with a business name that contains the name of the selling dentist (e.g. Miller family dentistry). I want to keep that business name for goodwill. Is that possible?
There. I am thinking of buying a dog walking business.
Hi there.I am thinking of buying a dog walking business. She doesn't have a premise - she has 5 walkers who visit the houses etc. She has been in business for 5 years, has 80 regular clients. Her P&L shows revenue of $57k up until Oct 2015. The expenses so far have been $40k so $17k profit. She has a website and 5 stars on Yelp.What do you think is a fair price?What questions do you think I should ask her?Is there any other suggestions you have for me!Please let me know if you need any more info.
I signed a non-compete with unreasonable demands (50 mile radiusView more business law questions
I signed a non-compete with unreasonable demands (50 mile radius and 2 year remain non working) in 2010. Now I'm ready to leave the company.When signing the agreement it was for a different job description to what I want to pursue now. For example I started with the company as a choreographer of dance routines. Now I want to pursue teaching Circus Arts. They have threatened to sue me if I teach within 50 miles for a period of two year. Have they run me out of town?