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Business partner gone wrong!

ae9803

Junior Member
#1
What is the name of your state (only U.S. law)? Colorado (Contract is in California)

When can I terminate a contract?
I have a business partnership agreement with an mutual individual for about a year now. However my partner has not been doing what was agreed in the contract. We assigned roles(jobs) that were supposed to be done by both parties. He has not and cannot prove that he done his part of the work. Also, he has failed to pay his half of the bills for the last two months which was also agreed upon on (not in the contract). What are my rights when to terminate the contract? How should I go about doing it? Is texting proof enough?

Thanks for everyone's help.
 

ae9803

Junior Member
#2
Agreement edited for privacy


WHEREAS, this agreement (“Agreement”) is hereby entered into on this 2nd day of March, 2017, The parties may individually be referred to as “Partner” and collectively be referred to as the “Partners”. The Partners wish to establish and confirm their understandings among themselves with regards to the Partnership, as set forth in this Partnership Agreement. The Partners hereby agree as follows:
1. Type of Business.
The Partners voluntarily associate themselves together as general partners for the purpose of conducting the general business of H.H., providing web hosting services and any other type of business that may from time to time be agreed upon by the Partners.
2. Name of Partnership.
The name of the Partnership shall be H.H. (the “Partnership”).
3. Term of Partnership.
The Partnership shall commence upon the execution of this Agreement and shall continue in perpetuity or until otherwise terminated or dissolved, in accordance with this Agreement and the laws of the State of California.
4. Place of Business.
The principal place of business of the Partnership shall be at the respective residences of each partner, and any other place or places that may be mutually agreed on by the Partners to this Agreement. 
5. Contributions.
XXXX will provide services for; marketing, Adwords campaign setup and maintenance, web development & design, copywriting, and other essential duties that are necessary towards carrying out the business of the Partnership. XXXX will provide services for; technical support, backend maintenance, customer service, and other essential duties that are necessary towards carrying out the business of the Partnership. Both partners will handle the Book Keeping unless decided otherwise.The Partnership shall establish an individual capital account for each Partner. Capital accounts shall be maintained on a cash basis of accounting. Each Partner’s capital account shall consist of his or her capital contributions to the Partnership capital which is made by that Partner pursuant to this Agreement, increased by his or her share of Net Profits, decreased by his or her share of Net Losses and distributions, and adjusted in accordance with applicable provisions of the Internal Revenue Code and Treasury Regulations. Each Partner shall contribute, in amounts unanimously agreed upon from time to time, sums sufficient towards the development and growth of the Partnership. Any such contributions shall be made in proportion to each Partner’s Partnership Interest, as set forth below.
6. Withdrawal of Capital.
No Partner shall withdraw any portion of the capital of the Partnership without the express written consent of the other Partners.
7. Profits and Losses.
Any net profits or losses that may accrue to the Partnership shall be distributed to or borne by the Partners shall be apportioned in the following manner:
XXXX 50%
XXXX 50%
8. Partnership Books.
At all times during the continuation of the Partnership, the Partners shall keep accurate books of account in which all matters relating to the Partnership, including all of its income, expenditures, assets, and liabilities, shall be entered. These books shall be kept on a cash basis and shall be open to examination by either Partner at any time.
9. Fiscal Year.
The fiscal year of the Partnership shall end on the each year. 
10. Accountings.
A complete accounting of the Partnership affairs as of the close of business on the last day of March, June, September, and December of each year shall be rendered to each Partner within days after the close of each of those months. Except as to manifest errors discovered shortly after its rendition, each accounting shall be final and conclusive to each Partner.
11. Time Devoted to Partnership.
Each Partner shall devote a reasonable amount of their time and attention and use his or her skills and ability in furtherance of the Partnership business. Nothing in this Agreement shall be construed as limiting either Partner’s ability to work in competing or related businesses.
12. Management and Authority.
With respect to the affairs of the Partnership, each Partner shall have the decision making authority which is in accordance with the proportions set forth in Paragraph 7. The Partners shall otherwise share in the management of the Partnership, and subject to a majority vote, shall have the authority to bind the Partnership in making contracts and incurring obligations in the name of the Partnership. However, no Partner shall incur any obligations in the name or on the credit of the Partnership which $100 without the express written consent of the other Partner. Any obligation incurred in violation of this provision shall be charged to and collected from the individual Partner incurring the obligation.
13. Net Profits Defined.
The term “net profits” as used in this Agreement shall mean the gross revenue of the Partnership, less any costs or expenses. The net profits of the Partnership as determined by generally accepted accounting principles for each accounting period provided for in this Agreement.
14. Restriction on Transfer.
No Partner shall make, execute or deliver any transfer, assignment, contract to sell, bill of sale, license or any other form of disposal of a Partner’s interest without the prior written consent of the other Partner.
15. Indemnification.
Each Partner shall indemnify and hold harmless the Partnership and the other Partner from any and all expenses, costs, and/or liabilities resulting from or arising out of any negligent or willful misconduct on such Partner’s part.
16. Disputes.
Decisions shall be finalized by the majority vote of the Partners. Any dispute arising out of or in connection with the Partnership or this Agreement shall be resolved amongst good faith negotiations amongst the Partners.
17. Withdrawal of Partner.
Any Partner may withdraw from the Partnership by giving the other Partner at least 30 days written notice of his or her intention to do so. A Partner shall be deemed to have withdrawn from the Partnership in the event that a Partner is unable to perform their duties or has been out of communication for a period of 2 weeks.
18. Dissolution.
The following events shall result in the dissolution of the Partnership: the mutual agreement by the Partners to terminate the Partnership, or the death, resignation, retirement, expulsion, involvement in a personal bankruptcy proceeding, or other withdrawal of a Partner.
19. Winding Up.
Upon the dissolution of the Partnership, Cole shall be the Winding Up Partner who shall oversee the remaining affairs of the Partnership which shall be wound up, the assets of the Partnership shall be liquidated, the debts paid, and any surplus divided equally among the Partners.
20. Notices.
All notices between the Partners provided for or permitted under this Agreement or by law shall be in writing and shall be deemed duly served when personally delivered to a Partner or, instead of personal service, when deposited in the United States mail, as certified, with postage prepaid, and addressed to the partner at the address of the principal place of business of the Partnership or to another place that may from time to time be specified in a notice given pursuant to this paragraph as the address for service of notice on the Partner.
21. Consents and Agreement.
All consents and agreements provided for or permitted by this Agreement shall be in writing and a signed copy of them shall be filed and kept with the books of the Partnership.
22. Miscellaneous.
Merger & Integration. This instrument contains the entire agreement of the Partners relating to the Partnership and correctly sets forth the rights, duties and obligations of each to the other in connection with is as of its date. Any prior agreements, promises, proposals, negotiations, representations, writings or other communications, whether written or oral, shall be superseded by this Agreement and shall therefore be of no force or effect. The Partners can only modify or waive parts of this Agreement with a writing signed by both Partners.

Jurisdiction. This Agreement and the Partnership shall be governed under the laws of the State of California, notwithstanding the principles of conflicts of law. The Partners each agree to the exclusive personal jurisdiction and venue in the state and federal courts of the United States located in the State of California, City of Los Angeles. The Partners hereby waive any defenses relating to such jurisdiction and venue. Any action relating to this Agreement shall exclusively be instituted in a court of competent jurisdiction in Los Angeles, California.
Severability. If any part of this Agreement is determined to be invalid or unenforceable by a court of competent jurisdiction or by any other legally constituted body having jurisdiction to make such determination, the remainder of this Agreement will remain in full force and effect.
Counterparts. This Agreement may be executed by original, facsimile or electronic signature. Any signed copy of this Agreement delivered by facsimile or electronic transmission will for all purposes be treated as if it had been delivered containing my original signature, and will be binding upon me in the same manner as though an original signed copy had been delivered.
IN WITNESS WHEREOF, the parties have read this Agreement and fully understand the meaning and effect of it and intending to be legally bound, have signed this agreement as of the day
Executed this 2nd day of March, 2017 at Los Angeles County, California.
 
Last edited by a moderator:
#3
Giving specific review of a contract is beyond the realm of the forum and typically the practice of law. Most members are not Attorney’s and those that are are not going to establish an attorney client relationship with you over the Internet.

You should take the contract to a local attorney who can provide you with specific advice.

Leaving the name of your business is not removing identifying information b


When can I terminate a contract?

When all parties agree to it or the contract allows it. Otherwise it would take a court’s action to terminate a contract.


I have a business partnership agreement with an mutual individual for about a year now. However my partner has not been doing what was agreed in the contract. We assigned roles(jobs) that were supposed to be done by both parties. He has not and cannot prove that he done his part of the work. Also, he has failed to pay his half of the bills for the last two months which was also agreed upon on (not in the contract). What are my rights when to terminate the contract? How should I go about doing it? Is texting proof enough?
As to the bills. Unless it’s part of this contract it is not a basis to terminate this contract. If you have a separate agreement then rely on the terms of that agreement to determine your direction.

While i see duties assigned, I don’t see a right to terminate the contract should one member feel the other is not living up to their expectations.

I do see where the business will be dissolved if either party withdraws. Sounds pretty simple to me but I don’t know anything about your business. See a lawyer who can review everything and advise you.
 

quincy

Senior Member
#4
Agreement edited for privacy


WHEREAS, this agreement (“Agreement”) is hereby entered into on this 2nd day of March, 2017, The parties may individually be referred to as “Partner” and collectively be referred to as the “Partners”. The Partners wish to establish and confirm their understandings among themselves with regards to the Partnership, as set forth in this Partnership Agreement. The Partners hereby agree as follows:
1. Type of Business.
The Partners voluntarily associate themselves together as general partners for the purpose of conducting the general business of [H..H], providing web hosting services and any other type of business that may from time to time be agreed upon by the Partners.
2. Name of Partnership.
The name of the Partnership shall be [H.H.] (the “Partnership”).
3. Term of Partnership.
The Partnership shall commence upon the execution of this Agreement and shall continue in perpetuity or until otherwise terminated or dissolved, in accordance with this Agreement and the laws of the State of California.
4. Place of Business.
The principal place of business of the Partnership shall be at the respective residences of each partner, and any other place or places that may be mutually agreed on by the Partners to this Agreement. 
5. Contributions.
XXXX will provide services for; marketing, Adwords campaign setup and maintenance, web development & design, copywriting, and other essential duties that are necessary towards carrying out the business of the Partnership. XXXX will provide services for; technical support, backend maintenance, customer service, and other essential duties that are necessary towards carrying out the business of the Partnership. Both partners will handle the Book Keeping unless decided otherwise.The Partnership shall establish an individual capital account for each Partner. Capital accounts shall be maintained on a cash basis of accounting. Each Partner’s capital account shall consist of his or her capital contributions to the Partnership capital which is made by that Partner pursuant to this Agreement, increased by his or her share of Net Profits, decreased by his or her share of Net Losses and distributions, and adjusted in accordance with applicable provisions of the Internal Revenue Code and Treasury Regulations. Each Partner shall contribute, in amounts unanimously agreed upon from time to time, sums sufficient towards the development and growth of the Partnership. Any such contributions shall be made in proportion to each Partner’s Partnership Interest, as set forth below.
6. Withdrawal of Capital.
No Partner shall withdraw any portion of the capital of the Partnership without the express written consent of the other Partners.
7. Profits and Losses.
Any net profits or losses that may accrue to the Partnership shall be distributed to or borne by the Partners shall be apportioned in the following manner:
XXXX 50%
XXXX 50%
8. Partnership Books.
At all times during the continuation of the Partnership, the Partners shall keep accurate books of account in which all matters relating to the Partnership, including all of its income, expenditures, assets, and liabilities, shall be entered. These books shall be kept on a cash basis and shall be open to examination by either Partner at any time.
9. Fiscal Year.
The fiscal year of the Partnership shall end on the each year. 
10. Accountings.
A complete accounting of the Partnership affairs as of the close of business on the last day of March, June, September, and December of each year shall be rendered to each Partner within days after the close of each of those months. Except as to manifest errors discovered shortly after its rendition, each accounting shall be final and conclusive to each Partner.
11. Time Devoted to Partnership.
Each Partner shall devote a reasonable amount of their time and attention and use his or her skills and ability in furtherance of the Partnership business. Nothing in this Agreement shall be construed as limiting either Partner’s ability to work in competing or related businesses.
12. Management and Authority.
With respect to the affairs of the Partnership, each Partner shall have the decision making authority which is in accordance with the proportions set forth in Paragraph 7. The Partners shall otherwise share in the management of the Partnership, and subject to a majority vote, shall have the authority to bind the Partnership in making contracts and incurring obligations in the name of the Partnership. However, no Partner shall incur any obligations in the name or on the credit of the Partnership which $100 without the express written consent of the other Partner. Any obligation incurred in violation of this provision shall be charged to and collected from the individual Partner incurring the obligation.
13. Net Profits Defined.
The term “net profits” as used in this Agreement shall mean the gross revenue of the Partnership, less any costs or expenses. The net profits of the Partnership as determined by generally accepted accounting principles for each accounting period provided for in this Agreement.
14. Restriction on Transfer.
No Partner shall make, execute or deliver any transfer, assignment, contract to sell, bill of sale, license or any other form of disposal of a Partner’s interest without the prior written consent of the other Partner.
15. Indemnification.
Each Partner shall indemnify and hold harmless the Partnership and the other Partner from any and all expenses, costs, and/or liabilities resulting from or arising out of any negligent or willful misconduct on such Partner’s part.
16. Disputes.
Decisions shall be finalized by the majority vote of the Partners. Any dispute arising out of or in connection with the Partnership or this Agreement shall be resolved amongst good faith negotiations amongst the Partners.
17. Withdrawal of Partner.
Any Partner may withdraw from the Partnership by giving the other Partner at least 30 days written notice of his or her intention to do so. A Partner shall be deemed to have withdrawn from the Partnership in the event that a Partner is unable to perform their duties or has been out of communication for a period of 2 weeks.
18. Dissolution.
The following events shall result in the dissolution of the Partnership: the mutual agreement by the Partners to terminate the Partnership, or the death, resignation, retirement, expulsion, involvement in a personal bankruptcy proceeding, or other withdrawal of a Partner.
19. Winding Up.
Upon the dissolution of the Partnership, Cole shall be the Winding Up Partner who shall oversee the remaining affairs of the Partnership which shall be wound up, the assets of the Partnership shall be liquidated, the debts paid, and any surplus divided equally among the Partners.
20. Notices.
All notices between the Partners provided for or permitted under this Agreement or by law shall be in writing and shall be deemed duly served when personally delivered to a Partner or, instead of personal service, when deposited in the United States mail, as certified, with postage prepaid, and addressed to the partner at the address of the principal place of business of the Partnership or to another place that may from time to time be specified in a notice given pursuant to this paragraph as the address for service of notice on the Partner.
21. Consents and Agreement.
All consents and agreements provided for or permitted by this Agreement shall be in writing and a signed copy of them shall be filed and kept with the books of the Partnership.
22. Miscellaneous.
Merger & Integration. This instrument contains the entire agreement of the Partners relating to the Partnership and correctly sets forth the rights, duties and obligations of each to the other in connection with is as of its date. Any prior agreements, promises, proposals, negotiations, representations, writings or other communications, whether written or oral, shall be superseded by this Agreement and shall therefore be of no force or effect. The Partners can only modify or waive parts of this Agreement with a writing signed by both Partners.

Jurisdiction. This Agreement and the Partnership shall be governed under the laws of the State of California, notwithstanding the principles of conflicts of law. The Partners each agree to the exclusive personal jurisdiction and venue in the state and federal courts of the United States located in the State of California, City of Los Angeles. The Partners hereby waive any defenses relating to such jurisdiction and venue. Any action relating to this Agreement shall exclusively be instituted in a court of competent jurisdiction in Los Angeles, California.
Severability. If any part of this Agreement is determined to be invalid or unenforceable by a court of competent jurisdiction or by any other legally constituted body having jurisdiction to make such determination, the remainder of this Agreement will remain in full force and effect.
Counterparts. This Agreement may be executed by original, facsimile or electronic signature. Any signed copy of this Agreement delivered by facsimile or electronic transmission will for all purposes be treated as if it had been delivered containing my original signature, and will be binding upon me in the same manner as though an original signed copy had been delivered.
IN WITNESS WHEREOF, the parties have read this Agreement and fully understand the meaning and effect of it and intending to be legally bound, have signed this agreement as of the day
Executed this 2nd day of March, 2017 at Los Angeles County, California.
I agree with justalayman that contract reviews go beyond the scope of this forum. Your contract requires a personal review by a lawyer licensed to practice in your own jurisdiction.
 
Last edited by a moderator:

ae9803

Junior Member
#5
Thankyou for your insight. I am not really in a position financially to afford a lawyer. Thats why I was reaching out here for advice, but I really do appreciate your insight.

As far as the agreement was concerned, the bills were agreed apon a 50/50 split which I do have the proof of that, this clause shows what can be cause a termination of the agreement


11. Time Devoted to Partnership.
Each Partner shall devote a reasonable amount of their time and attention and use his or her skills and ability in furtherance of the Partnership business. Nothing in this Agreement shall be construed as limiting either Partner’s ability to work in competing or related businesses.

In section 11, I am hoping that without the proof of evidence, I can use that as reason to cancel the contract, using section 17.


17. Withdrawal of Partner.
Any Partner may withdraw from the Partnership by giving the other Partner at least 30 days written notice of his or her intention to do so. A Partner shall be deemed to have withdrawn from the Partnership in the event that a Partner is unable to perform their duties or has been out of communication for a period of 2 weeks.


Also, in the section below, this appears to represent a breach of the contract because the business operated at a loss last month which I was forced to cover because he couldnt:

Profits and Losses.
Any net profits or losses that may accrue to the Partnership shall be distributed to or borne by the Partners shall be apportioned in the following manner:
XXXX 50%
XXXX 50%
 

ae9803

Junior Member
#6
Oh ok, I thought this was a place I could ask for advice. Although, I understand this is a forum for lawyers. I figured I could ask for free advice and some insight. I appreciate everyones time.
 
#7
Reasonable. Never shall there be a more ambiguous term that so many people rely on so heavily. What is reasonable? Who determines what is reasonable?

Also, in the section below, this appears to represent a breach of the contract because the business operated at a loss last month which I was forced to cover because he couldnt:

Profits and Losses.
Any net profits or losses that may accrue to the Partnership shall be distributed to or borne by the Partners shall be apportioned in the following manner:
XXXX 50%
XXXX 50%
profits and losses are not the same thing as expenses. Your agreement specifically states net profits or losses which is totally irrelevent to business expenditures. In addition it doesn’t say when or how the loss must be dealt with but simply it would be attributed 50% to each member.

In addition most business operate on a yearly basis so what happened last month isn’t particularly pertinent. In fact given issues such as taxes and many costs of a business are dealt with on an annual basis, it’s unlkely you can calculate a true net accounting on a monthly basis.
 

ae9803

Junior Member
#8
Reasonable. Never shall there be a more ambiguous term that so many people rely on so heavily. What is reasonable? Who determines what is reasonable?

profits and losses are not the same thing as expenses. Your agreement specifically states net profits or losses which is totally irrelevent to business expenditures. In addition it doesn’t say when or how the loss must be dealt with but simply it would be attributed 50% to each member.

In addition most business operate on a yearly basis so what happened last month isn’t particularly pertinent. In fact given issues such as taxes and many costs of a business are dealt with on an annual basis, it’s unlkely you can calculate a true net accounting on a monthly basis.
I appreciate the advise. I am just trying to kick my business partner out because he isnt doing anything lol. So basically, I am screwed.
 

LdiJ

Senior Member
#9
Oh ok, I thought this was a place I could ask for advice. Although, I understand this is a forum for lawyers. I figured I could ask for free advice and some insight. I appreciate everyones time.
Ok, lets start over here for a minute.

First, I do not know what context you meant by "is texting enough?", but I will tell you that there is virtually NO context where texting is acceptable. Even email is generally not acceptable in many instances. In writing, on paper handed to someone in person sometimes, via snail mail sometimes and via certified mail sometimes, is acceptable in various contexts.

Second, what were your initial investments in the partnership? How much money has the partnership earned? How much debt does the partnership have?...etc.

If the partnership has made no money and your investment has been relatively small, and there are no ongoing bills such as leases and other things that you cannot get out of, you can simply walk away from it and leave it all to your partner. If the partnership has significant debts or assets that is another story.

Odds are that the best thing for you to do is to take your partnership agreement to an attorney to review it and give you an opinion as to what might be best to do. Or, you could give more information here and we could give you a little more advice first. Its up to you.
 
#10
If the partnership has made no money and your investment has been relatively small, and there are no ongoing bills such as leases and other things that you cannot get out of, you can simply walk away from it and leave it all to your partner. .
Not based on the business agreement posted. Withdrawal of a partner results in a dissolution of the business. Upon that dissolution there is a specific unwinding process specified. I don’t see an alternate resolution for when a partner withdraws.
 

quincy

Senior Member
#11
Ok, lets start over here for a minute.

First, I do not know what context you meant by "is texting enough?", but I will tell you that there is virtually NO context where texting is acceptable. Even email is generally not acceptable in many instances. In writing, on paper handed to someone in person sometimes, via snail mail sometimes and via certified mail sometimes, is acceptable in various contexts.

Second, what were your initial investments in the partnership? How much money has the partnership earned? How much debt does the partnership have?...etc.

If the partnership has made no money and your investment has been relatively small, and there are no ongoing bills such as leases and other things that you cannot get out of, you can simply walk away from it and leave it all to your partner. If the partnership has significant debts or assets that is another story.

Odds are that the best thing for you to do is to take your partnership agreement to an attorney to review it and give you an opinion as to what might be best to do. Or, you could give more information here and we could give you a little more advice first. Its up to you.
Oh dear, LdiJ. Why do you make statements like that? So wrong.
 

LdiJ

Senior Member
#12
Not based on the business agreement posted. Withdrawal of a partner results in a dissolution of the business. Upon that dissolution there is a specific unwinding process specified. I don’t see an alternate resolution for when a partner withdraws.
While I understand your point, it sounds very much to me like a boilerplate partnership contract that was generated by legal zoom or a similar site. If they have done nothing significant since, walking away might be very simple. However, until the OP comes back and answers some basic questions one cannot really say much. My point was to engage the OP in some product dialog or send him to consult with a local attorney.