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Buying out a partner - business and legal questions
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Buying out a partner - business and legal questions

I have been working on a potential business and one of the people (call him Jason) who I thought would be a good partner is showing signs of flakiness. He does have a ton of leads and likes to talk. I think he fills a key role but he isn't the greatest team player. But I have known for about a year, so I know what I am getting vs a total stranger.

There are two other partners and I plan on giving them the same equity. Jason would get a sales commission. I am going to make everyone sign a buyout clause. I have not figured the dollar amount yet. I see this as a way to exert pressure if Jason does not keep plugging away. If things go great I won't complain, but if he starts slacking, I would be pissed that he was still making money off my idea and money invested.

A friend of mine was saying that even though he signs it and I buy him out, he can cry about how unfair it is, etc. and sue over it. But he hasn't done anything special so far, he has done things that I could have done if I took the time to do it. His value is really in his contacts and salesmanship.

Any advice or do you know if a person can sue even though you have a contract with a dollar amount? I know anyone can use, but sue with a reasonable chance of winning? This would be in California.

I'd be open to another structure (like a larger commission and no equity but this dude is pretty sensitive (as I have learned lately). I could just be asshole and give him nothing, since he has not done much yet, but that still opens a can of worms and isn't cool. I am just thinking of the best way to protect myself in the event he just sucks or slacks too much.

Thanks so much for your time.

Fate whispers to the warrior, "You cannot withstand the storm." And the warrior whispers back, "I am the storm."

Women and children can be careless, but not men - Don Corleone

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