employer ends contract, but uses my designs without paying me

[moviedude88]

What is the name of your state? CA

I am a web designer. I have a signed contract with a start-up to develop their logo and website. Contract example:

- End of Nov., I present preliminary design. Start-up's CEO decides to use my services to complete the designs or not ("go or no-go" decision). Pay me 10,000 shares.
- End of Dec., I present draft designs ("draft" term is clearly defined in contract). Pay me 20,000 shares.
- End of Jan., I present final designs. Pay me 30,000 shares.
- Total shares at the end: 60,000 shares.

So, at the end of Nov., the CEO likes my designs and chooses to continue with the rest of the contract. Around Dec. 20, I give CEO my draft designs (which are actually near "final design" quality). CEO claims he doesn't like my work and it's not even a draft -- claims everything is garbage. Terminates my contract, and wants to pay me only 10,000 shares for work up to end of Nov.

Then, in Feb., he uses all my logos and designs AS IS (maybe replacing 2 images in the entire website with his own). He has not sent me the actual stock option purchase agreements yet (so basically he hasn't even paid me the 10,000 shares yet).


MY QUESTIONS:

1) Did he breach contract by ending the contract early, even after he decided to use my services on the "go or no-go" decision date at the end of Nov.? There is no other termination clause in the contract we signed. How many shares am I entitled to?

2) Does he have the right to use my logos and designs for his business, especially after he claimed my work was worthless to him? Since he ended the contract claiming I didn't do a good job, do I have any legal right to say that he is not allowed to use any of my designs for his business?

[FlyingRon]

Originally Posted by moviedude88

What is the name of your state? CA


1) Did he breach contract by ending the contract early, even after he decided to use my services on the "go or no-go" decision date at the end of Nov.? There is no other termination clause in the contract we signed. How many shares am I entitled to?

What does the contract say? Did you build a go/no-go date into the contract?

2) Does he have the right to use my logos and designs for his business, especially after he claimed my work was worthless to him? Since he ended the contract claiming I didn't do a good job, do I have any legal right to say that he is not allowed to use any of my designs for his business?

Unless you negotiated otherwise in your contract, you've done a work-for-hire and he owns the rights to the work you have done so far.

[moviedude88]

Originally Posted by FlyingRon

What does the contract say? Did you build a go/no-go date into the contract?

Unless you negotiated otherwise in your contract, you've done a work-for-hire and he owns the rights to the work you have done so far.

1) Yes. So did he breach the contract? What are my rights? Actual portion of the contract quoted:
"Preliminary design of website, new company logo and MS PowerPoint template with several options presented to XX by Nov. 30th, 2006. When the preliminary design is presented, XX will choose to 1) accept the design and carry forward by having Consultant implementing it, or 2) reject the preliminary design while providing feedback to Consultant so that Consultant can incorporate that feedback into a second (and/or third) preliminary design, or 3) decline to have the Consultant complete a given task."

2) But since he hasn't even paid me my stocks yet, does he have the right to use my work? Doesn't he at least need to pay me first before using it? I'm not familiar with "work-for-hire" laws; could you please explain? Thanks.

[debtcollector`]

Originally Posted by moviedude88

1) Yes. So did he breach the contract? What are my rights? Actual portion of the contract quoted:
"Preliminary design of website, new company logo and MS PowerPoint template with several options presented to XX by Nov. 30th, 2006. When the preliminary design is presented, XX will choose to 1) accept the design and carry forward by having Consultant implementing it, or 2) reject the preliminary design while providing feedback to Consultant so that Consultant can incorporate that feedback into a second (and/or third) preliminary design, or 3) decline to have the Consultant complete a given task."

2) But since he hasn't even paid me my stocks yet, does he have the right to use my work? Doesn't he at least need to pay me first before using it? I'm not familiar with "work-for-hire" laws; could you please explain? Thanks.

You have a contract with "kill fees." Basically, he can't use the work without paying for it in full. **Obviously, this is an assumption since I haven't read the contract**. You need to talk to a lawyer with experience in intellectual property.

DC