Promissory Note, Non-Compete, or Other?

[bcap01]

What is the name of your state? MA

A potential partner and I plan to setup an LLC where my partner contributes the idea and intent to Market and Sell, sell and I contribute the software development short and long term.

I have been asked to sign a Promissory Note that indicates I would, "never move forward with an app like this without my partner."

I am curious to know, is a Promissory Note the right approach to this? Or would is there a better approach to this? (e.g. Non-Compete, Other?)

While I am happy to satisfy the concern of my partner, I want to make sure I do not over-restrict myself if the business fails or any unforeseen circumstances occur.

 

[Zigner]

You are looking for a contract and you should consult with an attorney. Don't worry about exactly what it's called, rather, simply explain your wishes to the attorney and said attorney can advise you on the best approach.

EDIT: What you want to do is not a "promissory note". A "promissory note" relates to money owed.

 

[zddoodah]

I have been asked to sign a Promissory Note that indicates I would, "never move forward with an app like this without my partner."

Been asked by whom? The statement that you quoted is not, I assume, an actual quote because it would be really weird for the term "my partner" to be used. Is it otherwise accurate but you substituted "my partner" for the person's name (something that is typically done by the use of brackets)? In any event, what is that supposed to mean? Probably would be best if you provided a full, accurate quote (with actual names changed).

Also, what is the purpose of the promissory note? For whose benefit will it exist? A promissory note is typically used in connection with a loan or to memorialize a debt. Are you receiving a loan from someone or will you be or are you indebted to someone?

I am curious to know, is a Promissory Note the right approach to this? Or would is there a better approach to this? (e.g. Non-Compete, Other?)

Without some clarity as to the reason for the promissory note and the language in question, there is no way to answer these questions intelligently.

While I am happy to satisfy the concern of my partner, I want to make sure I do not over-restrict myself if the business fails or any unforeseen circumstances occur.

The smartest thing for you to do would be to engage the services of a local attorney. Spend $1,000 now to (potentially) save yourself $50,000 in the future.

 

[quincy]

What is the name of your state? MA

A potential partner and I plan to setup an LLC where my partner contributes the idea and intent to Market and Sell, sell and I contribute the software development short and long term.

I have been asked to sign a Promissory Note that indicates I would, "never move forward with an app like this without my partner."

I am curious to know, is a Promissory Note the right approach to this? Or would is there a better approach to this? (e.g. Non-Compete, Other?)

While I am happy to satisfy the concern of my partner, I want to make sure I do not over-restrict myself if the business fails or any unforeseen circumstances occur.

A non-compete agreement would appear to meet your needs better than a promissory note (I don’t see how this applies) or “other” (I don’t know what the other could be).

If you are developing innovative software for the business, you could also want to protect it as a trade secret in addition to the copyright protection it will already have.

You really will want an attorney in your area guiding you.

 

[bcap01]

Many thanks for your insights everyone.

The original quote is, "b) states you will never move forward with an app like this without me."

The partner believes the idea/concept is unique but there are many websites that already use the same technology and logic. However, it is possible this logic will serve the intended Customer in a new way which makes the idea innovative. If successful, the concept is very easy to replicate using any programming language.

Should the partnership dissolve for any reason, I have no intent to compete with my partners market. If I ever have another software project that has a similar requirement I do not want to be at risk. The statement seems too general, what is the best way for the Partner to define "Idea"?

It does seem a Non-Compete makes the most sense. When I say "Other" i intend to mean, "what other options are there?" Yes, I will hire an Attorney for guidance with certainty.

 

[zddoodah]

The original quote is, "b) states you will never move forward with an app like this without me."

Incomplete sentences aren't too much better than inaccurate quotes.

I will hire an Attorney for guidance with certainty.

Good deal.

 

[quincy]

Many thanks for your insights everyone.

The original quote is, "b) states you will never move forward with an app like this without me."

The partner believes the idea/concept is unique but there are many websites that already use the same technology and logic. However, it is possible this logic will serve the intended Customer in a new way which makes the idea innovative. If successful, the concept is very easy to replicate using any programming language.

Should the partnership dissolve for any reason, I have no intent to compete with my partners market. If I ever have another software project that has a similar requirement I do not want to be at risk. The statement seems too general, what is the best way for the Partner to define "Idea"?

It does seem a Non-Compete makes the most sense. When I say "Other" i intend to mean, "what other options are there?" Yes, I will hire an Attorney for guidance with certainty.

I can tell you that “an app like this” will need to be changed. It is much too vague.

No one on this forum can help you in drafting an agreement, however. For that you will need to see an attorney in your area. The attorney you see for help in drafting an agreement can help you word it so it protects both you and your partner should a dispute arise later or should your partnership dissolve.

Good luck with your new business.

 

[Litigator22]

What is the name of your state? MA

A potential partner and I plan to setup an LLC where my partner contributes the idea and intent to Market and Sell, sell and I contribute the software development short and long term.

I have been asked to sign a Promissory Note that indicates I would, "never move forward with an app like this without my partner."

I am curious to know, is a Promissory Note the right approach to this? Or would is there a better approach to this? (e.g. Non-Compete, Other?)

While I am happy to satisfy the concern of my partner, I want to make sure I do not over-restrict myself if the business fails or any unforeseen circumstances occur.

 

[adjusterjack]

"what other options are there?"

Run away from this character as fast as you can. You're not even in business yet and you're arguing about details. I get the impression that he considers himself the alpha dog. This does not bode well for you.

 

[quincy]

bcap01 and his prospective partner might find they work better together not as partners in a single LLC but rather as separate companies. They could then hire or license the goods/services of the other under their own terms.

 

[joanapalmer]

What is the name of your state? MA

A potential partner and I plan to setup an LLC where my partner contributes the idea and intent to Market and Sell, sell and I contribute the software development short and long term.

I have been asked to sign a Promissory Note that indicates I would, "never move forward with an app like this without my partner."

I am curious to know, is a Promissory Note the right approach to this? Or would is there a better approach to this? (e.g. Non-Compete, Other?)

While I am happy to satisfy the concern of my partner, I want to make sure I do not over-restrict myself if the business fails or any unforeseen circumstances occur.

Agree with you. I also have the same problems.

 

[quincy]

Agree with you. I also have the same problems.

If you have a legal question, please start your own thread. Thank you.