Does an email constitute a binding contract with regard to LLC Ownership Transfer? I'm one of three cofounders of an LLC incorporated in Delaware. The LLC is very much a startup and has not been profitable nor has any assets. Because of lack of sales, one of our founders told us that he didn't want to continue working on the business and we parted ways. It was very informal, and we didn't go through the process of getting him off the LLC. Later, the other remaining founder and I started working with a friend and wanted to bring him into the company as a replacement for the founder who left. We began a long chain of emails with my friend and the ex-founder and eventually agreed to pay a certain price for 1/3 of the company. The conversation ended by him accepting our price in exchange for a transfer of 33% ownership of the LLC. We told him next steps were we would set up a time to meet, sign the necessary documents and transfer the money. About a week after that, the business lost our most valuable account whom was responsible for ~90% of the sales. That combined with some other factors led to my friend deciding that he didn't want to pursue ownership in the company and walked away from the potential transfer. The ex-founder is understandably upset, considering he thought he was about to get a nice payday from this and is now threatening legal action against us. I'm assuming he means to file a civil lawsuit to get the agreed upon sum for his shares of the company. I'm wondering if he actually has a case here. Are we legally obligated to pay him and force the LLC transfer even though we no longer want it? No documents signed or filed and no money has been exchanged. I have read that in certain situations, email correspondence CAN BE interpreted as a binding legal contract. I'm unsure if that applies to this situation. Interested to hear what you all think. Thanks!
TL; DR: It is possible you might have a binding, enforceable contract. It depends on the facts. A trial court will determine the facts unless there is a settlement. Hire an attorney. 1. Contracts require certain elements in order to be enforceable. This website defines the elements of a contract to include the following: The requisite elements that must be established to demonstrate the formation of a legally binding contract are (1) offer; (2) acceptance; (3) consideration; (4) mutuality of obligation; (5) competency and capacity; and, in certain circumstances, (6) a written instrument. 2. Emails are not the contract. They are evidence of a contract. The emails themselves would not necessarily constitute a contract. However, they could be offered as evidence to prove there was a contract and what the terms were — thereby establishing a rebuttable presumption of a contract. In order to win a rebuttal, the litigating party would need to establish by a preponderance of evidence that one or more of the elements of a contract did not exist. 3. Contracts do not need to be written to be enforceable. Contracts do not always need to be written (or signed) in order to be enforceable. Oral contracts are just as enforceable in many cases as written agreements. The classic exception to this rule is that many (if not all) states require contracts to transfer real estate be written, not oral agreements. 4. Courts consider the behavior of the parties as evidence of a contract. Another category of evidence courts consider when deciding contract cases is the behavior of the parties. There is a legal theory called estoppel which Google defines as: ...the principle that precludes a person from asserting something contrary to what is implied by a previous action or statement of that person or by a previous pertinent judicial determination.
Do I need to create an LLC if I already own the domain? No. Can someone legally create an LLC with the same name as my domain? Yes. Just trying to understand what the difference is between an LLC and a business An LLC, a &quot;limited liability company,&quot; is a kind of legal entity that has a separate identity from the members of the LLC. The members' liability is limited with respect to the company's liability, hence the name. A business is a commercial activity. The two concepts are independent. A person can have a business without forming a corporation, or indeed many businesses. A single corporation can also have many businesses. Back to the question about someone forming an LLC using your domain name, this raises the issue of trademark protection. In the US, at least, you can't register a trademark unless it is &quot;in use in commerce&quot; (15 USC 1051(a)(3)(C)), which means explicitly that you cannot use the mark &quot;merely to reserve a right in&quot; it (15 USC 1127). But there are many subtleties of trademark protection that are widely misunderstood by most people, so if you anticipate wanting trademark protection for a name, you will probably want to learn about how trademark protection works and likely talk to a trademark lawyer.
A contract agreeing to share 50% of the profits from the game with him would be legal but it would be unwise, because it could create a general partnership, depriving him of the benefits of limited liability associated with the LLC. The better course would be to amend the Operating Agreement of the LLC so that he would be a "Class B" member and to provide that "Class B" members do not have voting rights and share 50-50 in profits from the game but not in profits from other sources. This would give everyone limited liability protection and would make it absolutely clear that he is receiving profits as a co-owner, rather than wages as an employees, thereby avoiding the incidents of employment of which there are many.
There is no requirement to name the parties to a contract I just bought a cup of coffee. I did not give my name to the other party to that contract and while I know the name of the shop, I do not actually know the legal entity I contracted with. Nevertheless, we have a binding contract and, for example, if that coffee gave me food poisoning, I would have legal recourse under that contract. Similarly, there is no difficulty signing a contract under a pseudonym - it still creates a legally binding relationship. The practical difficulties While there is no legal problem, there is an evidentiary one - if someone enters a contract and later disclaims doing so, how do you prove that they did? Or vice-versa, if someone alleges that it was you that entered the contract, how do you prove that you didn’t. What you need is some way of definitively but anonymously tying the person to the contract. I can think of lots - a fingerprint, DNA, public key cryptography, a trusted third-party intermediary to name just a few. This is essentially a technical problem rather than a legal one.
If your LLC made 300K before paying salaries, and paid 300K total in salaries, that seems quite reasonable. You might have a point if the order of events was: LLC pays 100K in salaries, LLC gets sued for 200K, LLC raises salaries by 200K. Note that the owners have to pay income tax on 300k earnings, plus whatever else employers and employees have to pay. And an LLC doesn't pay salaries to owners, it pays salaries to employees who be sheer coincidence are also owners. It's a different matter if the company pays dividends. A company must keep dividends low enough so that it can run its business, including paying damages for lawsuits that it knows about. So if the company planned all along to pay 300k in dividends, then is sued for 200k, they likely have to reduce the dividends.
I wrote a letter to the Eclipse Foundation. The consultant pointed me to section 5 in their FAQ. My case falls under the term "linking". He warned that he isn't a lawyer, but offered the following short answer: The Eclipse Foundation does not consider linking with EPL content to be a derivative work and so you are not required to disclose your source code.
You can’t die “during” a sale The formation of a contract is instantaneous, if the buyer dies they have to die before there was a contract in which case the seller keeps the car or after there was one in which case the buyer’s executor and the seller must do everything necessary to complete the sale (or breach the contract and get sued). This has nothing to do with any administrative obligations that either party owes to a third party like the DMV. Failing to properly transfer title may lead to complications and disputes latter on but it doesn’t directly affect the contract.
How should I proceed? I am asking law friends to recommend some employment lawyers, but other than this, can I do anything else? You definitely don't need an employment lawyer for this. From a legal standpoint, the matter is very simple: If you grant their request (whether by signing or otherwise expressing your acceptance), you would be waiving any remedies currently available to you for their breach of contract. The company's attempt to override its contract with you is quite naive, but the company can always (and evidently does) try to get away with its liability nonetheless. I would not be surprised if the company subsequently tries harder to intimidate you, but that does not change your legal position &amp; merits unless you sign the waiver the company is pursuing. Asking for your post-termination availability reinforces the notion of company's poor planning and subpar management.