How do I protect myself in a business venture if somebody elsegave me the idea for the business?

UPDATED: Mar 28, 2011

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How do I protect myself in a business venture if somebody elsegave me the idea for the business?

A friend of mine came up with an idea to start a small business with me. He has now backed out of the idea but has given me the OK to continue on with the idea. Is there a form that I can have him sign stating that even though it was his original idea he or his spouse cannot or will not come in the future and sue me for any monies the company may have made?

Asked on March 28, 2011 under Business Law, Utah


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

There is no set form, but you can certainly draw up any simple agreement stating the above; or even just send your friend a letter in some way that you can prove delivery, such as fax or email or fed ex, stating that it is your understanding that he has no objection to you using the idea and also that he is disclaiming any claim to any profit, share of the business, etc. You could even offer him  something--1 - 5% of profit, for example--if you feel it would be fair that he gets something for having come up with the idea, and if you did that, you'd put in the agreement or letter that in exchange for whatever it is you're offering him, he gives up any claim to the idea or any work that he may have done on it to date.

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