Do I want a lawyer to review a cofounder agreement before I sign it?

Question

My fellow cofounder sent me a 6 page cofounder agreement. While it may look fine to me, I am not experienced with this sort of thing.

Should the cofounders hire a lawyer to draw up or review these sort of things or does each partner need to hire their own? I am mostly concerned about cost.

Answers: 1 public & 0 private

Steven weinrieb
Patent Attorney

IMHO, each co-founder should have his/her own attorney to review the co-founding agreement. There are several critical reasons: 1) you cannot have a single attorney looking out for the best interests of all of the co-founders which may possibly/probably be in conflict, and therefore the attorney will immediately have a conflict of interest problem; and 2) each co-founder needs to fully understand the agreement before signing it. One of the more amusing recollections I have from law school was when we were taking our courses in contracts, and we would be studying these different contract cases which had gone to the courts because each party to the contract had a different "opinion" as to what the contract said or meant - and of course the court had to decide what the contract did in fact say and mean. And it was often the case that party A would state that he "understood" the contract to mean one thing whereas, in fact, it clearly stated something different as proposed by party B - each party "thought" that they truly understood what the contract said or meant, but only one was correct, so to protect yourself, you should in fact seek the appropriate counsel to review the agreement, explain it to you, and ensure that all parties are in agreement as to what the agreement truly says and means as written.

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