As a San Diego business attorney managing a firm with decades of business and dispute litigation and resolution experience here in San Diego I have one mantra for our clients: get it in writing. It is always prudent to seek written confirmation of promises in business to avoid disputes and protect your own interests. Especially when those promises are in exchange for unpaid efforts on a project or potential new business. One classic example goes something like this:
“We need your help getting this idea off the ground. We obviously don’t have the money to pay you but if you will just (fill in the blank with your valuable time and services) we will give you a piece of the action or an ownership stake in the company.”
That’s fine. Get it in writing! It may seem like common sense, but in the heat of the moment many shrewd and capable business people forget to ask this simple question:
“Would you just send me a quick email describing what you want me to do, how it fits into your project, and that you are offering a piece of the action or an ownership stake in the company?”
When they do, you have taken a step in good faith that begins to capture the sort of agreement that can really protect you down the road. You have documentation that you are exchanging your knowledge and services for an interest in their company.
It would be obviously much better to have a well crafted contract between the parties. Our business contract attorneys develop these types of agreements regularly. A recent case involving a project that began in a University setting and ultimately became a company worth millions of dollars, and a professional who was never paid for central contributions to the project makes our point clearly.
Many worthwhile and lucrative projects begin in such a way. Protect yourself. Avoid disputes and expensive future legal battles. Get it in writing!
If they are unwilling to put something into writing, it is a strong indication that more discussion might be required, and that your services and time may be for naught. I would walk away if a potential business partner isn’t willing to back up their words in a simple email, let alone an enforceable business contract.
We invite you to review the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.
