Partner quits project, agrees 2 termination agrement, transferring profit share rights 2 me without compensation. Enforceable?

Get Legal Help Today

 Secured with SHA-256 Encryption

Partner quits project, agrees 2 termination agrement, transferring profit share rights 2 me without compensation. Enforceable?

I have been working on a project with my business partner. We got a lot of work done but, suddenly and voluntarily, he quit the project. He gave me all the work/materials and told me that he didn’t want any credit nor monetary compensation. We signed a 2 page agreement, before starting the project, where we agreed to partner for this project only. The deal memo says that he would get a of the profits and that we would split all the costs incurred, such as traveling expenses, hiring other people sporadically, etc. We actually had several expenses but he doesn’t want any reimbursement either. Since this isn’t a registered LLC, and we started collaborating after just partnering as individuals, what would be the best way to dissolve and terminate our partnership? He agrees to sign a termination agreement that says that he is transferring all his shares of the profit and rights to me without any compensation. Would that be an enforceable termination agreement?

Asked on February 20, 2017 under Business Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

In a situation like the one you describe, where there is no LLC or corporation to be dissolved and/or whose ownership must be resolved, a simple written contract, clearly delineating what each of you is giving up (e.g. rights to profit or reimbursement) and getting (you have to give him something, called "consideration," in exchange for what he is giving you to make the agreement enforceable, but it can be as simple as promising in the agreement that he will have no further obligations to you and that you will not sue him for anything he did while a partner) and signed by the two of you will suffice and be enforceable. Simply write up the terms clearly, make sure you both agree to them, and both sign.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption