Alain Farmer <[EMAIL PROTECTED]> wrote:
Anthony: Would it be possible to write in that no one
may form a contract on behalf of the partnership ...
Eric: Yes, _but a third party who would be unaware of this could claim -
justifiably - that he thought that a partner had the right to enter into a
contract. Because 3d parties can claim 'reasonable reliance' this protection
is more theoretical than real. Thus the restriction in flexibility is probably
not worth the limited risk protection. But if you want, yes such a provision
can be included. It would have the effect of forcing a unanimous vote on any
contract entered into by the partnership - which is good for the eventual
contract with MC, but bad if you envision other contracts for the partnership
- .e.g. licensing the software to third parties and end users. I do not
recommend it, but my non-recommendation of such a provision is not 'strong' -
i.e. a good lawyer could justify either including or not including such a
provision.
We could for example include a provision stating that the licenses and
contract with MC require unanimous approval. Most partnerships permit any
partner to enter into contracts which bind the partnership because this gives
the partnership greater flexibility.
As for the partnership holding the copyrights and other intellectual property:
there is no legal problem with this. Essentially each partner and associate
would hold an equal percentage in all rights to any partnership property (if
this sounds complicated, it is because it is). That is, the partnership is
simply an agreement between persons and not itself a legal person
(corporations and states are legal persons, and so are you unless a court
declares you out-law : yes, you can be declared a legal non-entity)
So, members can retain their 100% interest in their creations, or they can
place their creations into the 'pot'. The former is probably preferable, but
again, both are justifiable.
The advantage of each partner keeping their rights is the following: they
won't feel ripped off.
The advantage of making their creations partnership property is the following:
the partnership can now dispose of the property as it sees fit.
The disadvantage of making creations partnership property is that the property
cannot be sold (remember, no commercial purposes to limit liability) at least
not without a unanimous agreement of partners.
I would recommend reserving this decision until after the partnership is
formed. It could be included in the agreement itself, but would involve a
dramatic change in the right of each creator over the thing that s/he creates.
My instinctive reaction says, keep it simple and leave ultimate ownership of
the creation in the hands of the creator. Either is possible, and can be
included in the partnership agreement, but I recommend reserving such a
decision - because the partnership agreement will essentially be
'unchangeable', whereas contracts entered into in pursuit of the partnerships
objective would be changeable - i.e. you can try the shared ownership road,
and if it doesn't work, you can change it, which would not really be possible
under the agreement i envsion.
There are more legal issues, and i have lots of mail today, so i will write
further on this.
Hope this helps,
Eric Engle
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