What to do if a friend and I formed a business to produce snacks to sell in grocery stores but behind my back he formed his own company and is using my recipes?

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What to do if a friend and I formed a business to produce snacks to sell in grocery stores but behind my back he formed his own company and is using my recipes?

My job was to provide the recipes; his job to handle the business end of things. We met regularly to fine tune the recipes. Last week we were ready to go. That’s when he informed me that our company no longer exists anf that he’s started up his own company in which he’s going to use my recipes (he’s going to change one tiny thing in each recipe) and keep all profits for himself. Can I sue him for this? Also, both of us were to put in $100 to start the company but he never cashed my check. Does this mean we even had a partnership? Is this evidence of his manipulation that will allow me to sue him? And now he says he’s going to sue me for money owed. Is that possible?

Asked on October 18, 2014 under Business Law, Colorado

Answers:

Edward Carlstead / The Carlstead Law Firm

Answered 6 years ago | Contributor

 

Here are some possible claims you may have: breach of partnership agreement, breach of fiduciary duty, breach of duty of loyalty, misappropriation of trade secrets, interference with prospective business advantage, conversion, and breach of contract.  That all sounds very fancy but it is just a way of saying your partner shafted you out of the business you and he agreed to undertake together.  The law imposes on partners the highest degree of fidelity to one another, so what he did appears very wrong.  Of course, in all these matters, the amount of your damages is really what drives the remedy.  How much are your recipes really worth?  How unique are they?  How much money could you two reasonably expect to make?  A lawsuit over all this could be quite expensive for both of you.  Perhaps your better course of action is to forget about this guy and find a more reliable partner or go it alone.  The recipes are yours and he should not be able to stop you from using them.


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