ConfusedPartner
Junior Member
What is the name of your state (only U.S. law)? Florida
I have a kind of complicated contract question, but I don't think it's complicated for a professional to answer:
There are two equal partners in an LLC, and a potential third. One partner wants to give equity to the third person, and the other doesn't think it's a good fit.
After deliberating the two partners believe they have come to an agreement to let the third person into the business.
The first partner draws up the paperwork in good faith to grant the third person 33% equity, and hands it over to the second partner who signs off on the deal.
The partners have had a good faith misunderstanding between each other: the first partner believed the second partner wanted to make the third person a partner. The second partner believed they had struck a compromise that made the third person an employee instead of a partner. When the second partner signed the contract he believed he was signing employment paperwork.
A little over a month after the paperwork is signed and the equity has been granted, the second partner realizes the mistake, and wants to reverse the contract.
He says he didn't know what he was signing, and that he had a reasonable, good faith belief the contract he signed was for the employment of the third person, but not to grant that person equity.
Does he have standing, or is the third person a partner now no matter what the second partner thinks?What is the name of your state (only U.S. law)?
Edit: Just to clarify, partner one wants the third partner in the business, and the new partner wants to be in the business.
I have a kind of complicated contract question, but I don't think it's complicated for a professional to answer:
There are two equal partners in an LLC, and a potential third. One partner wants to give equity to the third person, and the other doesn't think it's a good fit.
After deliberating the two partners believe they have come to an agreement to let the third person into the business.
The first partner draws up the paperwork in good faith to grant the third person 33% equity, and hands it over to the second partner who signs off on the deal.
The partners have had a good faith misunderstanding between each other: the first partner believed the second partner wanted to make the third person a partner. The second partner believed they had struck a compromise that made the third person an employee instead of a partner. When the second partner signed the contract he believed he was signing employment paperwork.
A little over a month after the paperwork is signed and the equity has been granted, the second partner realizes the mistake, and wants to reverse the contract.
He says he didn't know what he was signing, and that he had a reasonable, good faith belief the contract he signed was for the employment of the third person, but not to grant that person equity.
Does he have standing, or is the third person a partner now no matter what the second partner thinks?What is the name of your state (only U.S. law)?
Edit: Just to clarify, partner one wants the third partner in the business, and the new partner wants to be in the business.
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