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I have been working to develop a website business in New York

for the last few years...
I have been working to develop a website business in New York for the last few years. After having the initial business plan and purchasing the domain name, I asked a close friend to be my partner because I knew he would be passionate about the project. I incorporated as an LLC and since he had no money at the time I didn't add him on the LLC. We had many meeting over the last few years perfecting the concept before launching it. In that time frame I spent over $1000 on the site, he spent only $400 (he never had money). In the last few months he starting working on another website business with a wealthy partner (different concept, but can potentially have the same users). He recently told me that he signed an agreement with his other partners attorney stating that he cannot be apart of any other web businesses. I took some time to think about it and after 2 weeks I contacted him through email to tell him, he can legally no longer be apart of my website business, because of the contract he signed and that I would pay him back for his $400 laid out and I even offered to pay him for his time invested while working on the project. As you can imagine these situations can get ugly because of alot of emotions involved, but he emailed me back stating that he actually never signed any contract with the other guy and that I can't tell him he is not a part of this. We have no written agreements of any kind. I can show receipts for the money I laid out. I would like to know what you think my options are, he is a close friend, but honestly as a business partner, he is not the help I imagined originally, he is lazy and does nothing but wants to reap all the benefits, and never has money to put into the company. Where do I go from here?
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Answered in 17 minutes by:
1/4/2012
Law Educator, Esq.
Category: Business Law
Satisfied Customers: 119,568
Experience: All corporate law, including non-profits and charitable fraternal organizations.
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Absent any written agreements on this, under the statute of frauds he has no contract with you to enforce. He could sue you for the actual amount of work he did and you would need to come up with some number to satisfy him about that and you will have to negotiate some agreement with him to get him out of the project and tell him if he does not want to accept your offer, he is still out and as there is no written agreement he has no rights to the LLC (but you do want to negotiate something to be done with him because the litigation costs on this would be steep because as an LLC you need an attorney for any legal matters). Any agreement you come to with him you need to put in writing and make him sign and it should state that, "In exchange for valuable consideration he is waiving rights to any and all claims against you personally, the LLC and the website, including but not limited to any intellectual property rights in the site, which you deny he has as any work done was a work for hire, and any rights to any further compensation for any reason from you or the LLC."

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Customer reply replied 5 years ago
Thank you very much, I am happy with your response...can you just reword the legal writing at the end to be proper tense and with our names, as I will have to type it up. My name is XXXXX XXXXX is Sean, and the company is WIV. And I will gladly pay you and give you a positive response. Thanks again!
The reason I wrote it the way I did is that we are prevented from writing any legal agreements for customers of this site as it can be considered representation and that is prohibited by this site. Thus, in writing it the way I did it leaves it to you to write the agreement on your own and I am not representing you and just providing you with the information you need to handle your own affairs.
Law Educator, Esq.
Category: Business Law
Satisfied Customers: 119,568
Experience: All corporate law, including non-profits and charitable fraternal organizations.
Verified
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