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Albert Marmero
Albert Marmero,
Category: Business Law
Satisfied Customers: 197
Experience:  Partner at Long, Marmero, & Associates, LLP
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See about a month ago, after much deliberation, I joined a

Customer Question

See about a month ago, after much deliberation, I joined a startup team with an agreed upon set of terms that we formulated into a contract. (MESH-InitialEquityAgreement.docx-2.pdf) This contract was then emailed to all teammates with the following message"This contract that has been attached will be the final terms everyone isagreeing on. Both the parties will sit down with a lawyer to put everything in legal terms. As of now we are agreeing on the spirit of the contract. Work starts IMMEDIATELY."Now after internal politics a few team members are attempting to back pedal on terms. This is after the team worked under these guidelines and after subsequent equity agreements were made based off of the terms of this contract. The nature of these agreements was like that above, emailed to all parties involved with a message of agreement like this for example:"Anthony Altieri, Martin, and Arnav have agreed upon the spirit of the terms in the attached agreement. The final agreement will reflect these terms but in legal language and a more robust agreement.Onwards,
While the contract wasn't signed is this still enforceable in a California?
Submitted: 1 year ago.
Category: Business Law
Expert:  Albert Marmero replied 1 year ago.

Unfortunately, these agreements would generally not be enforceable if not signed. And the email that came with the agreements is worded more like a Letter of Intent or Memorandum of Understanding in that the parties were agreeing to general terms but also agreeing to execute a more thorough document at some point.

One possible exception to the above referenced rule is that a court might uphold some of the terms in these documents if it can be shown that one party relied, to their detriment, on these terms, and the other party benefited from the terms. But absent that type of showing, these documents will just be treated as unsigned drafts.

Also, from reading the documents it sounds like Mesh is not even yet a legal entity, or was not at the time the documents were drafted. Is Mesh now a legal entity? If so, the workings of Mesh and the relationship of the parties is simply governed by default California law, as opposed to these unsigned documents. When an LLC or corporation is formed, it is not necessary to have equity agreement, operating agreements, etc. Without any such documents, California law governs. Any documents simply just supersede, or fill in gaps in, the law.

I hope this is helpful, even if its not the answer you wanted to hear. If so, please provide a rating so I receive credit for responding to you. Also, feel free to ask follow up questions. Thanks!

Expert:  Albert Marmero replied 1 year ago.

Did you have any further questions? I have not heard back from you and I notice you have not provided a rating.