Dishonest business partner, still wants 50% when i do all the work.

My business partner found this client and made all the arrangements including the contract with them.

He and I met with the owner before the contract was signed and accepted, and I presented "our" company's qualities which sealed the deal... After the contract was signed, my partner told me that they would pay us $3k to take care of certain projects and tasks. However, my partner stated that the funds would go to me since I would be doing all the work, and he would wait for the "top end sales" to reach a certain number which would entitle us a percentage of our client's profits.

For the last 30 months, I have been working with this client and managing them every day, making sure they were satisfied and seeing the growth in their business. During these 30 months, my partner did nothing but meet with the owner for an hour, which occurred every 6 months. Including invoicing the client, in which case I never saw their check to our company. But every month I was receiving $3k as promised.

A few weeks ago, my partner said he wanted to pass this client to me and not have anything to do with them. I was hesitant at first but since I have been the one varying this client 100% on my own, I was fine with it. So I proceeded to contact the owner and have the latest invoice sent to me so I could resume the invoicing on my own. I found out, for the last 30 months, the client was paying us $6k per month. That meant my partner was hiding true revenue from me and pocketing 50%... 90k in a 30 month span. I was shocked and furious. I have been doing all the work and paying for some incurred expenses out of my own $3k to help the client.

So I told my partner I am not happy with the percentages, and want to reduce the percentage. He said no, he wants 50% as he always got.

I need advice on how to progress on this issue and get him out of the game. I have switched the client from our old ABC business to my new XYZ business. Partner still wants a check from the last few months...

What does your partnership agreement say in terms of disbursement of collected funds?

Unfortunately all of this was a verbal agreement. There was no contract made.

It sounds like you received what you bargained for and should pay him. Without the customer he cultivated, you would have no business. Technically the money he took could be considered the "top end". It could be worse for you to be honest. Remember Bill Gates started Microsoft by selling IBM on the DOS operating system. Gates made billions, yet paid the man who developed it, after he sold it to IBM, about $1k.

Agreed, but then again I believe without my service or skills that provided for the client, we would not have the client. I have known him for 12 years and trusted him... That was bad judgement on my end. Now I know to never trust anyone again. But moving forward, I am going to do whatever it takes to not pay him anymore... He does not do anything and reaped the benefits? Not okay in my book.

Then why come here and waste our time. You owe him the money.

NewEra2011 said:

Agreed, but then again I believe without my service or skills that provided for the client, we would not have the client. I have known him for 12 years and trusted him... That was bad judgement on my end. Now I know to never trust anyone again. But moving forward, I am going to do whatever it takes to not pay him anymore... He does not do anything and reaped the benefits? Not okay in my book.

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Business and trust are reluctant lovers.

You didn't make your partnership agreement official by putting it in writing. If you want to establish who makes what, put it down and get everyone to sign it.

Again, bad judgement on my part to seek advice from people on this forum....

Just to let you know...

He will probably sue you for breach of contract, on the basis you previously split the revenue. You will likely lose.

Only one problem. There's no contract. Plus I have conversations in email and instant messaging stating that we only get 3k from the client. If anything, that is a breach of contract on his part , but there's no contract...

NewEra2011 said:

Again, bad judgement on my part to seek advice from people on this forum....

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Okay, what were you hoping to hear?

That your nebulous and never stated intention to be paid on some unknown but fair algorithm which uses work performed would stand up in a court of law?

That, somehow, the courts would protect your interest and work when you failed to do so yourself?

It doesn't work like that. You didn't have a contract. You still don't. All you have is a precedent which is NOT in your favor.

If you sue, you lose.

NewEra2011 said:

Only one problem. There's no contract. Plus I have conversations in email and instant messaging stating that we only get 3k from the client. If anything, that is a breach of contract on his part , but there's no contract...

Click to expand...

No contract, no breach.

And it isn't illegal to lie in an email.

cyjeff said:

What does your partnership agreement say in terms of disbursement of collected funds?

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This question needs asking again... cyjeff was not asking about this client contract agreement.

When you formed the company/partnership - what was the agreement?
You had a company/partnership before this client, right?
Or was the company forming based upon this client and there was no company/partnership agreement but only the client contract?