Question
Our technical co-founder has been working with another company on a loose basis, without any contract documents signed. The co-founder has developed the basically the core of our product's technical infrastructure. The other company will be one of many operating within the eco-system of our product (a platform).
No code or trade secrets from the other company exist within our platform.
Could we be liable to the other business in any way, such as IP infringements or anything else? If we are liable for anything, can we take steps to eliminate or reduce the potential damage? Can the fact that there is no contracts work against us in anyway?
Answers: 1 public & 0 private
I think that anytime you are transacting with significant amounts or investments without a contract you are asking for trouble so the short answer is, YES, the lack of a contract is bound to work against you because the one time you do not have a contract is the one time the parties are likely to end up fighting about the business arrangement. In the U.S., contracts involving a high enough amount need to be in writing or they won't be enforceable. In the absence of a contract, the next best thing is to maintain a solid paper trail of evidence showing everything that has occurred in the transaction that is relevant to your claim or position.
The intellectual property or business "know how" of each company should be governed by a license agreement.
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